The Great Britain Freight Model and Freight Transport Models - Case Study Example

Railway closures During the 1960s the British railway system was in a of crisis because operating losses rose steadily, from £67.7 million in1960 to £104 million in 1962, representing a total loss of £143.6 million for the British Transport Commission that year.(www.ndad.nationalarchives.gov.uk). The Beeching Report prepared in 1961, proposed a plan to prune the railway infrastructure on the basis that (a) the future of transport lay in the road network rather than railways and (b) railways should be run as a business rather than a public service enterprise. During the 1950’s, 3000 miles of track had already been closed and this Report proposed that a further 6000 miles of Britain’s 18,000 miles of railway system be closed. After the Beeching Report was published, 5000 miles of track and 2000 stations were closed, in anticipation of savings and bringing the rail system out of deficit (www.bbc.co.uk). The actual savings achieved were only £30 million, while the overall losses were in excess of £100 million. Further closures followed after the issue of the Serpell report, which sought to secure improved financial results for the Railways (www.railwaysarchive.co.uk). In recent decades however, with increasing traffic on the roads and congestion of highways, coupled with fuel prices that are on a steep spiral upwards, the merits of road transport that were envisaged in the Beeching Report have not materialized. In the year 2000, the Department of Transport, Environment and the Regions put forth figures revealing that 7% of the road network suffers congestion while 13% suffers heavy congestion. (Tobias, 2008:8-36). More and more railway links that existed earlier but have deteriorated to a run down state are being revived; for instance the old Swanage Railway to run steam trains between Wareham and Corfe castle has been revived (www.news.bbc.co.uk). Rail transport offers a more cost effective option because large quantities of goods can be transported over long distances at lower fuel costs on less congested networks. It also allows larger numbers of people to be transported using one transport vehicle at a time, which in turn reduces congestion and traffic bottlenecks on highways and major roads that are caused by large volumes of traffic. The GBFM forecasts project that over the coming years, there will be a further increase in rail freight and traffic for the following reasons: (a) increase in long term fuel prices, which makes it cheaper to transport goods using the rail network as opposed to the road network (b) a greater reliance on imported goods through major container ports which all have rail terminals (c) The need to include a rail connection in order to obtain consent for new warehouse sites. (www. Mdst.co.uk). At the same time, the GBFM forecasts also suggest that there is likely to be a shortfall in the available level of rail services. Forecasts for the year 2030 are represented graphically, minus 80% of the existing rail paths timetabled in 2007 (www.mdst.co.uk). The timetable for 2007, available from the mdst website suggests that rail line utilisation may already be falling short of the desirable levels. Ideally, utilization should be at a level of only 80% because this would allow some flexibility and scope for expansion where necessary. Comparing the two graphical representations shows an increase in many subsidiary rail lines for 2030, and thereby indicates a much higher level of usage in 2030 as compared to 2007, such that the 80% utilization level desirable for flexibility cannot be accommodated despite the potential increase and re-opening of old rail networks. These graphical representations have been derived using the Great Britain Freight Model, which uses a software package, the GBFM 5.0. This calibrated model uses an integrated database with trade, transport and economic statistics being compiled into a base matrix of freight flows. The matrices combined with other assumptions, are used as the basis to project flows. This in integrated with other peripheral information such as networks and transport costs to assign the flows in multi-modal paths. This model allows for the facility of predicting long term trends. It also allows for the generation of “what-if” figures, wherein a base year can be used as the basis upon which to derive projections for subsequent years. The GBFM interface presents various scenarios and base matrices and in order to run a model, the user needs to select one international matrix, one domestic matrix and one scenario. The forecast graphs presented by the GBFM model are already mirroring the current reality of an increasing reliance on rail transport, but unsupported by a matching accommodation in terms of availability of rail networks. These projections further reinforce the non applicability of the Beeching and Serpell reports that the future of transport lay in the road. Rather, due to increasing congestion, it appears that the future of transport lies in the development of rail networks. The forecast also appears to indicate that many of the rail networks closed down after the Beeching and Serpell reports may be re-opened, yet even this may not be adequate to cope with the transport requirements that may arise. The rail freight transport association has also identified the certainty of bottlenecks arising due to increasing road congestion and the increasing need that will be felt for a well developed rail network. The Freight Transport association projected the transport needs for the future by mapping routes and matched them against the availability of networks, thereby identifying a significant shortfall. The projected rail freight forecast for 2003 and 2004 put forth by the Freight Transport Association is an average of 144.7 million net tonnes for 2014 for rail freight and 113.1 million net tonnes in 2030 (www.fta.co.uk). This represents an increase of 28% in 2014 as compared to 2003. The major increases occur in the movement of maritime containers by rail, which show a 90% increase up to 21 million net tonnes. The rail freight group has projected rail freight to double by 2030 with a 30% increase in tonne km being projected from 2006 to 2015 (www.fta.co.uk/news). The report also points out that there will be shortfalls on several rail routes, in particular routes such as the West Coast Main Line from London to Crewe, the route from Crewe to Glasgow and the route from Southampton to West Midlands as well as several other routes around London. The rail freight forecasts use the multi-dimensional scaling method in preparing its forecasts. This method uses ordination of data, a technique that is different from the clustering of data. The latter method is more useful when hypotheses are being tested, but ordination of data is more useful in the case of exploratory data. The process of ordinating data involves the grouping of multiple variables on the basis of their values. Grouping of data in this manner places similar objects closer to each other and dissimilar objects further away from each other. These objects are grouped on different axes in this manner on the basis of their values, with the relationship between the objects being characterized either graphically or numerically. As compared to the figures obtained for the freight forecast above, Appendix 8.2.1 presents figures for rail freight transport demand aggregated for a list of commodities in 2005 as 22,304,396,792 tonne kms, while the figures projected for 2014 are 27,718,221,034 tonne kms and 2030 are 30 billion tonne kms. In arriving at these figures, the Strategic Rail Authority derived a model that disaggregated freight movements by distance bands, using the characteristics of flows, market segmentation and cost assessments in order to predict future market shares (Tobais, 2008:8-36). Other assumptions that were made in arriving at these figures were (a) no major changes in Government policy and (b) no major changes in industry performance. These figures have also been generated using multidimensional scaling models. While existing rail freight demand figures for 2003 and 2007 have formed the basis upon which future projections are being made, the development of those figures has also taken into account the perceptions about the development of transport. The use of MDS models allows for the incorporation of perceptions about freight demands likely to exist in the future. It develops an input matrix using the dissimilarities between items taken in pairs and the output produced is a coordinate matrix that maps both existing and projected rail freight transport routes and the estimated tonne kms that are likely to be needed. The use of this model also allows for the comparison of different variables and assessing the relationship between them. The Freight Transport Model is based upon certain basic assumptions, such as: (a) no enhancements in the existing rail network (b) reduction in freight charges for the use of the Channel (c) no charges levied for heavy vehicle road users (d) no change in maximum weights for heavy goods vehicles. Using exponential smoothing in this model is also useful because it allows forecasters to assign weightage to past historical and present period data in order to pick up trends and reflect seasonal changes in data. (Ross 149). Moreover, it is easier to implement as compared to the moving average method. The transshipment model uses rail as the means of transport and minimizes the total freight moved, using a matrix of power stations and ports, with a mathematical mode of programming that graphically represents the shipment model. An excel sheet is used and cell values are assigned according to the permutations and combinations desired. This can be used as the basis to determine flows in and out of each cell, whether negative or positive. In order for the model to function effectively, it is necessary to include all the elements of a potential situation, but if the interactions between them are too complex, then it is desirable to reduce the elements to the basic ones which are necessary. In conclusion, the GBFM and Freight Transport Models have largely relied upon models that represent data graphically. They have focused upon the development of projections that map existing and projected routes based upon an assessment of estimated future requirements of rail transport. The GBFM model in particular offers the facility of mapping routes by applying different matrices and different case scenarios each time. This offers the advantage of being able to apply various “what-if” possibilities and the assumptions made in this model are based upon present conditions and Government policies. The projections derived from the application of this model appear realistic in the context of the present conditions, where congestion and road bottlenecks are common and a clear need has been identified for the development of rail transport. This model is however useful in terms of graphically identifying the shortfall in rail lines that could be felt in the coming years, as the freight industry increasingly resorts to rail transport to offset costs. The projections that have been made based on the Freight Transport model have arrived at a figure that doubles freight volumes in 2030 as compared to the present day. The projections made by the Strategic Rail Authority on the other hand, have arrived at a figure of 30 billion tonne kms in 2030 as opposed to 22 billion tonne kms in 2005; hence the increase in vole projected by the Strategic Rail Authority is not as high as that projected by the freight transport model. Comparing the two models however, it may be noted that the projections made by the Strategic Rail Authority appear more realistic. The model has disaggregated freight movements by distance bands, thereby allowing clearer projections to be made. Moreover, future market predictions have been made using market segmentation as well as cost assessments. The potential disadvantage of this method however, is that it applies present conditions and assumes no changes in Government policy or industry performance. These volatile areas could however undergo substantial changes, thereby undermining the reliability of the projections made using this model. The Freight Transport model has the advantage of allowing weightage to be applied to past figures and historical trends in arriving at the projections which have been made. On the whole however, the model offers estimates that are too generalized and may have limited use in planning the future of the rail transport networks. The GBFM routes that have been mapped using the model are however, very realistic projections that identify the shortfall of rail routes. The limited applicability of the Beeching and Serpell reports have become very clear in recent decades as traffic congestion has increased and the application of this model could be very useful in determining the new routes that need to be developed. References: * “Beeching Axe – background”, Retrieved September 29, 2009 from: http://www.experiencefestival.com/a/Beeching_Axe_-_Background/id/615787 * British Railways Board. Retrieved September 29, 2009 from: http://www.ndad.nationalarchives.gov.uk/AH/37/detail.html * “Dorset’s lost Railways”, Retrieved September 29, 2009 from: http://www.bbc.co.uk/dorset/content/articles/2008/09/29/beeching_feature.shtml * Freight Transport Association and Rail freight group: Forecasts of future demand for rail freight”, Retrieved September 29, 2009 from: http://www.fta.co.uk/assets/files/rail-freight-future-forecasts-march-2006/forecasts.pdf * GBFM Shortfall forecast for 2003: retrieved September 29, 2009 from: http://www.mdst.co.uk/attachments/downloads/2030%20Excess%20Demand.%202030%20Demand%20MINUS%200.8%20X%20WTT2005%20labels.%2036x60inch.pdf * “New railway link after 30 years”, retrieved September 29, 2009 from: http://news.bbc.co.uk/1/hi/england/dorset/4040791.stm * “Railway Finances”, Retrieved September 29, 2009 from: http://www.railwaysarchive.co.uk/documents/DoT_Serpell001.pdf * “Rail freight forecasts”, retrieved September 29, 2009 from: http://www.mdst.co.uk/articles/transport_models___forecasting/gbfm___uk_rail_forecasts * “Rail freight to double by 2030 – increased rail capacity essential for UK economy”, Retrieved September 29, 2009 from: http://www.fta.co.uk/news/item/rail-freight-to-double-by-2030---increased-rail-capacity-essential-for-uk-economy * Ross, David Frederick, “Distribution: Planning and control: managing in the era of supply chain”, Springer Read More