BR freight prices could rise by 120%

BRITISH RAIL is imposing price increases of up to 120 per cent on its freight customers in an effort to rid itself of 'unprofitable' flows of traffic, according to a campaign launched yesterday.

The campaign claimed that annual contracts for more than 2 million tonnes of freight are likely to be lost as a result of BR's new policy by the end of this month, the equivalent of an extra 80,000 lorry journeys. Further losses are expected by next March.

A group of 150 companies involved with rail freight launched 'Freight on Rail', a campaign to encourage the Government to stimulate the rail freight business rather than allow it to be run down. Mike Harvey, managing director of CAIB UK, the wagon-leasing company, said: 'BR is in many cases refusing even to quote for what are sizeable flows of freight because they say they cannot make a profit on them.' He said that BR and the Department of Transport appeared to be blaming each other for the change in policy.

Nicholas Finney, managing director of the Waterfront Partnership transport consultancy, cited the example of a firm that currently moves 100,000 tonnes per year from Boston, Lincolnshire, to the West Midlands. He said the firm was being asked to pay at least 61 per cent more and was told by BR that it would continue to carry the flow only if it was increased to 165,000 tonnes a year.

BR had also refused to give Blue Circle a price for carrying 68,000 tonnes per year from the Peak District to the Midlands. Mr Harvey said: 'The point is that customers who have invested in rail heads have done so on the basis of certain flows. If BR then refuses to carry some of these flows, it may well make the whole operation unviable since the costs have to be shared by a smaller tonnage.'

The Government has said it is selling BR's freight businesses but no date for the sale has been set. While the Government has ostensibly supported the transfer of freight from road to rail, BR managers feel it has been running down the industry.

BR freight managers were told by the Department of Transport this year not to seek new business or to behave in an 'entrepreneurial manner'. They fear that the policy of cutting off unprofitable business will lose them some of their biggest customers.

The rail freight industry is already under great pressure because it is losing revenue from coal, its most profitable sector.