ABSTRACT
Rail freight is generally viewed positively in terms of its contribution to society and the environment but is often seen as uneconomic by those requiring the use of freight transport services. While it is often possible to ascertain the cost side of rail freight transport, it is more challenging to identify the pricing policies due to a lack of transparency and commercial confidentiality concerns. As a rule, a higher proportion of rail freight’s costs are ‘fixed’ when compared to road haulage. This leads to the oft-quoted maxim that rail is best suited to high-volume flows over long distances, since lower unit costs can then be reflected in more competitive pricing. Not surprisingly, given the variance in the characteristics of freight transport markets and specific flows, there is a lack of agreement as to the necessary volume or distance for commercial viability. Furthermore, many aspects of the economics of rail freight activity are typically not transparent, so it is a challenging area about which to provide a detailed evidence-based account. That said, this chapter seeks to provide insight into the key characteristics of, and influences on, the economics of rail freight. It focuses mainly on rail freight economics from a European perspective and, in particular, the British situation. Rail freight activity is considered mostly within the context of a mixed traffic railway (i.e. ‘shared-user’ rail networks catering for both passenger and freight traffic), the dominant form of rail operations across Europe.
