DBS's representations

Date21 August 2015
SectionRegulation 29 appeal by DBS for access and services at Freightliner Southampton Maritime Terminal
IDBI
SCHENKER
Bill Hammill
Manager Track Access
Office
of
Rail Regulation
One Kemble Street
London WC2B 4AN
Dear Bill,
..
-~
HetHttftOJ'TMO
bp!T.-0,....
a.....,...w..w.
&
~~u.
.__
DB
Schen
ker
Rail (UK) Ltd
Ground Floor McBeath House
310 Goswell Road
London EC1 V ?LW
Telephone:
Fa
x:
Mobile:
Nigel Oatway
Access Manager
21
August 2015
APPEAL BY DB SCHENKER RAIL (UK) LIMITED FOR ACCESS AND SERVICES AT
SOUTHAMPTON MARITIME FREIGHTLINER TERMINAL SOUTHAMPTON
This letter constitutes the response
of
DB Schenker Rail (UK) Limited ("DB Schenker") to
the representations made by Freightliner Limited ("Freightliner") on 4 February 2015 (the
latest redacted version received on 15 June 2015)
in
respect
of
DB Schenker's appeal
under Regulation 29
of
the Railways Infrastructure (Access and Management)
Regulations 2005 ("the Regulations") for access at Southampton Maritime Freightliner
Terminal
("
Maritime Terminal").
At the outset, DB Schenker considers that this letter, together with the supporting
documents referred to within it and disclosed to ORR, contain confidential information, the
disclosure of which would significantly harm the legitimate business interests
of
DB
Schenker. Should ORR be minded to disclose any part
of
the information contained in
these responses and/or the supporting documents to any third party
at
a future stage, DB
Schenker asks that it be given the opportunity to make prior written representations.
1. Opening Remarks
1.1. Since making its appeal in December 2014, DB Schenker understands that a
significant amount
of
time has been taken up addressing whether or not certain
information provided to Office of Rail Regulation ("ORR") by Freightliner should be
withheld from DB Schenker on the basis
of
commercial confidentiality. Whilst DB
Schenker fully acknowledges the reasons for this, it is somewhat disappointing that the
timescales have been lengthened significantly
as
a result. However, DB Schenker hopes
that the additional time taken in addressing this issue will not have been wasted in that
ORR
's decision will act as a precedent for any future appeals thereby helping to reduce
timescales as a result.
1.2. Given that some information
in
Freightliner's response remains redacted, DB
Schenker's representations are based on the detail that has been disclosed along with its
supposition on the detail that continues to remain secret. DB Schenker thanks ORR for
granting it further time to make this response.
DB Schenker Rail (UK) Limited
Registered Office:
Lakeside Business Park
Carolina
Way
Doncaster DN4
SPN
Registered in England and Wales
Registered
No
: 2938988
IDBI
SCHENKER
2/11
2. Overview
2.
1.
Instead
of
providing a line by line critique
on
Freightliner's representations, DB
Schenker will focus on two key issues which it considers have a significant impact on its
appeal. These issues can be described as "capacity" and "viab
le
alternative".
3.
Capacity1
3.1. In its representations, Freightliner appears conclude that the Maritime Terminal is
operating at full capacity and that
any
future increases
in
capacity would likely be filled
with its own services. Consequently, there is little
or
no room for
any
further services
at
present and Freightliner submits that DB Schenker's requests for access should be
denied.
3.2. Freightliner lists the key factors
that
, in its opinion, impact on the capacity
of
the
Maritime Terminal. These are:
Restricted siding length.
Number
of
lifts per hour that can be achieved safely
by
the crane.
Straddle carrier efficiencies.
Requirement to shunt wagons to
and
from the wagon shed within the terminal
to undertake maintenance.
Restrictive shunt movements while fuel point in use.
Performance
of
services arriving at the terminal off the rail network.
Site conditions.
Engineering access on the rail network.
3.3. Freightliner also states that the interaction between the factors listed above can
influence available capacity.
In
an attempt
to
provide a measured analysis
of
those issues
that are within the control
of
Freightliner and which do not require "significant further
investment", this part
of
DB Schenker's response will focus on the following:
Rail Infrastructure & Facilities
Mechanical Handling Equipment
Track Occupancy
3.4. Thereafter, taking the above three factors into consideration, DB Schenker will pose
'Key Questions' which it believes need to be considered
by
ORR
in
its determination
of
the issue
of
available capacity at the Maritime Terminal.
(1)
Rail Infrastructure and Facilities
3.5. DB Schenker understands that the
four
main roads (nos. 1 to 4) are, in total, long
enough to accommodate a 30 FEA wagon train. lt is acknowledged, however, that only a
proportion
of
the length
of
each siding is situated beneath the cranes. This results in
1 The representations in this section have been derived from an Independent Report undertaken on
behalf
of
DB Schenker.
IDBI
SCHENKER
3/11
wagons needing to be shunted during loading/unloading and in some cases, when
maximum length trains are being operated, the adjacent road(s) can be adversely
affected. DB Schenker does not contest the stated length
of
the other roads.
3.6. Freightliner's representations clearly demonstrate the significance
of
the locomotive
and wagon repair/maintenance facility and its considerable impact on the capacity
of
the
Maritime Terminal to accommodate further intermodal services.
In
this regard, Freightliner
states that:
Up to 18 locomotives per day receive service checks, exams and refuelling.
Between 12 and 24 wagons per day are maintained and repaired in the wagon
maintenance facility on
si
te.
The site is also used to pre-stage wagons for wagon general repair trips to
Eastleigh that take place twice weekly.
3.7. As Freightliner's national wagon maintenance centre, this 24 hour 6 day a week
operational facility has a constant throughput
of
wagons making exclusive use
of
roads 9
and 10 within the Maritime Terminal.
lt
is also noted that locomotive refuelling at the
Maritime Terminal can lead to congestion at the fuel point.
(2)
Mechanical Handling Equipment
3.8. DB Schenker acknowledges that the height
of
the new Liebherr cranes has increased
the distance between cab and rail wagon.
lt
is also noted that the span is also greater.
However when compared with the 40-year old Stothert and Pitt cranes it must be
recognised that the Liebherr crane is superior
in
all respects including lift, trolley and
traverse speeds as well as operator systems.
3.9. Information is set out in Freightliner's response regarding the performance
of
the two
Liebherr rail mounted gantry cranes ("RMG") in terms
of
movements per hour (mph). DB
Schenker acknowledges that it is unrealistic to assume that a maximum published speed
in 'mph' can be achieved throughout a full
24
hour period and notes the factors listed by
Freightliner which purport to restrict the capacity
of
the crane as follows:
2 hours are required for each crane
for
daily inspection and maintenance.
No movement on numerous occasions per day due to safety requirements.
Shunting
of
wagons.
Double lifting
of
containers to road vehicles.
Double lifting
of
containers to the holding area.
3.1
0.
However to compensate for these delays some factors appear not to have been
considered, for example, crane cycle speeds . DB Schenker believes that with a well
organised operation it is often possible to achieve two container lifts within a single crane
cycle. This is achieved by discharging an in bound container to create a wagon space and
reloading an outbound container to the vacant wagon space within the same crane cycle.
Although with some limitations and a slightly longer cycle, the net effect
of
two lifts per
cycle impacts positively on the number
of
movements per hour.
IDBI
SCHENKER
4/11
3.11. DB Schenker understands that the straddle carriers are supplied and operated by
DP World Southampton ("DPWS"). Freightliner states that 4-5 straddle carriers are
deployed to service the Maritime Terminal. This is qualified by the statement that "there
are both physical
and
financial constraints
in
increasing the number
of
machines
operated'. Significantly, and as indicated
in
the capacity study, DPWS stated that 10
straddle carriers were available for the Maritime Terminal operation.
3.12. Whilst DB Schenker acknowledges that the crossing
of
the main port road can limit
the efficiency
of
the straddle carrier operation, this would appear to be reasonably within
the control
of
DPWS.
(3)
Track Occupancy
3.13. Track occupancy is by far the most significant factor in DB Schenker's view for
determining terminal capacity. There are a wide range
of
issues which influence track
occupancy and it is clear in the case of the Maritime Terminal that some
of
the track
occupancy can be classed as productive (i.e. is influenced by the main operation of
loading and discharging the train), whilst a large number
of
others factors are non-
productive
or
ancillary to the main purpose
of
the Maritime Terminal (e.g. the large
maintenance facility).
3.14. The Southampton MCT 36 hour rolling track occupation chart provided by
Freightliner assists DB Schenker
in
understanding this matter, particularly when
considered alongside the information provided by Freightliner in its representations.
(a)
Productive
3.15. The operating
of
the Rail Mounted Gantry cranes will have a significant bearing on
the track occupancy beneath the gantry. The speed for the loading and discharge
of
a
train is determined by the specification of the crane and the efficiency of the operators.
3.16. The debate regarding in-line or herringbone positioning of containers under the
crane has clearly been considered
at
length by Freightliner. Whatever the best solution,
this will impact on the speed
of
train loading and discharge and thereby influence the
occupancy of the track. Double lifting to either a vehicle, transit
or
storage will also impact
adversely on the productivity
of
the crane operation. The other considerations listed in
paragraph 3.9 above will also influence the loading/discharge operation as will adverse
weather causing delays and extended track occupancy.
3.17. The impact
of
the straddle carriers on track occupancy relates directly to the
efficiency with which containers are made available to,
or
taken away from, the crane
loading area. If container availability is constantly maintained, thereby permitting an
uninterrupted crane operation then optimum efficiency should be achieved as any delay in
presenting
or
collecting a container is likely to result
in
reduced crane efficiency thereby
extending track occupancy.
(b)
Non-productive
3.18. The terminal must be able to accommodate trains on arrival, including any late
arriving trains which place additional pressure on the terminal programme. All such
IDBI
SCHENKER
5/11
incidents will impact
on
track occupancy but they are
an
everyday aspect
of
terminal
operations.
3.19. Train departures can also have an adverse impact on track occupancy. This will
always involve the time to conduct pre-departure inspections (see below) but may also
include the time spent on the terminal awaiting a departure slot onto the network.
3.20. Where train restrictions
in
the timetable necessitate extended delays between train
arrival and departure times it is possible that working roads may have to be occupied
'non-productively' during this period as this reduces the availability
of
infrastructure for
loading/discharge operations.
3.
21
. The layout of the Maritime Terminal and the length
of
the sidings necessitate a great
deal
of
shunting when loading. This situation is becoming more critical as train lengths are
being increased. As indicated in paragraph 3.5 above, on the four main roads under the
crane a 30 wagon train will have to be shunted forwards and backwards during the
loading operation. On the other roads it
is
likely that trains will have to be split. This will
require even more shunting when loading followed
by
the reforming of trains prior to
departure. There are also numerous occasions when the cranes are unable to operate for
safety reasons which result in increased track occupancy.
3.22. Freightliner services operate with one hour 'cut off' prior to departure. This allows
time for pre-departure inspections and a
10
minute buffer to ensure on-time-departure.
Inevitably a working track underneath the cranes will be occupied during the cut-off
period.
3.23. Locomotive movements as well as during refuelling will be occupying valuable track
within the Maritime Terminal. Shunting at the refuelling facility and the inspection pit also
impacts adversely on other shunting operations within the terminal.
3.24. In particular, the wagon and locomotive repair facility generates a great deal
of
shunting activity not directly related to the operation
of
intermodal trains to/from the
Maritime Terminal. This impacts
on
the general track occupancy within the Maritime
Terminal but
in
particular on roads 9 and
10
which are used almost exclusively to stable
wagons pre and post maintenance. Similar to the refuelling facility, shunting onto the pit
road increases track occupancy and impacts on productive activity as do the twice daily
periods for crane inspection and maintenance.
(4)
Key
Questions
3.25. By relying on the various factors mentioned above, Freightliner is attempting to
make its case that DB Schenker's appeal should be rejected on the grounds
of
"non-
availability
of
capacity
at
this terminaf'.
3.26. Freightliner claims that "they would themselves benefit from additional capacity
at
its
Maritime Terminaf' and that
"if
there was an additional slot that could
be
made to match
with a slot on the network
and
it
was commercially viable, Freightliner would operate this
already". Therefore, it appears that Freightliner has a clear motive to maintain its
'monopoly' position at the Maritime Terminal by protecting capacity for its future services
and, thereby, its competitive advantage. The fact that Freightliner confirms that any slots
that become available from the Maritime Terminal would be operated by itself suggests a
IDBI
SCHENKER
6/11
presumption that there would be no 'open access' available to other operators whether
or
not capacity is
or
becomes available.
3.27. Without access to further information relating to the Maritime Terminal (much
of
which DB Schenker must assume continues to be redacted from Freightliner's
representations) it is difficult
for
DB Schenker to formulate a case to support its appeal.
Much
of
the data that has been submitted by DB Schenker previously in respect
of
its
appeal has been rejected as inaccurate
or
incomplete by Freightliner.
3.28. From the representations made by DB Schenker
in
this section
of
its response, it is
clear that there are many factors that determine
or
affect capacity
at
the Maritime
Terminal that cannot be analysed effectively by DB Schenker. Instead, DB Schenker
believes that these factors need to be evaluated independently by relevant experts with
specialist knowledge
of
rail mounted cranes and large intermodal terminal operations who
have access to all
of
the relevant information. The questions that would need answering
by such an evaluation would, in DB Schenker's view, include:
3.29. On RMG Cranes
Is the method
of
operating the cranes suitable?
Are the cranes being operated to maximum efficiency?
Are the crane drivers suitably skilled and trained?
Is the crane maintenance regime appropriate?
What
is the most appropriate layout to position containers under the crane?
How can crane stoppage time
be
reduced?
How can double lifting be minimised?
3.30. On Rail Terminal Operations
Straddle carrier operations
Is the straddle carrier operation efficient?
Should the number
of
deployed straddle carriers be changed?
Does the main port road crossing need to be improved?
Shunting
Can train loading/discharge shunting be improved?
Are alternate arrangements possible for locomotive refuelling?
Can inspection pit shunting be improved?
How can the interface with the wagon and locomotive repair facility be better
operated?
Rail Operations
How can train planning be optimised
for
arrivals and departures, especially
with late running trains?
IDBI
SCHENKER
7/11
Are pre-departure inspections conducted efficiently?
How can track occupancy
for
stabling and transit be minimised?
Can the departure cut-off time be improved?
3.31. Clearly, any such evaluation and audit
of
the Maritime Terminal operation would be
dependent upon Freightliner providing necessary access to the information but it would
certainly give a more definitive understanding
of
terminal capacity and begin to establish
the opportunity to accommodate third party services and in particular DB Schenker's
access request.
(5)
Other Considerations
3.32. Notwithstanding the above representations and in the absence
of
an independent
audit and evaluation having access to all
of
the relevant information, DB Schenker
submits that one
of
the key factors constraining capacity
at
the Maritime Terminal to
accommodate additional intermodal trains (whether third party
or
those
of
Freightliner
itself) is the need for Freightliner to carry out other activities
at
the Maritime Terminal that
are
not
directly related to the throughput
of
containers
at
the Port
of
Southampton and in
particular its locomotive and national wagon maintenance and repair function
..
3.33.
DB
Schenker is unaware
of
any
other key intermodal terminals
in
the
UK
which
in
corporate large scale vehicle maintenance and repair activities which impact
significantly on capacity that could be made available to increase throughput
of
the
terminal
for
containers.
In
fact, DB Schenker believes that other major intermodal
terminals would positively discourage the use
of
the terminal
for
a scheduled maintenance
facility
to
be set up which would occupy operational roads within the terminal thereby
reducing the capacity available
for
revenue earning intermodal trains. DB Schenker's vi
ew
is supported by the fact that both Roads 9 & 10 are in effect '
out
of
use' to revenue
earning intermodal trains
at
the Maritime Terminal.
3.
34
. Although this appeal is facilitated under the Regulations, it also bears mentioning
that both ports and rail networks are facilities to which the essential facilities doctrine has
been applied, and to which access has been mandated by competition authorities (under
Article 102
of
the Treaty on the Functioning
of
the European Union and/or Chapter
11
of
the Competition Act 1998). An owner
of
an essential facility will
not
commit an abuse
where it has an objective justification for a denial
of
access. A particular issue which
arises in the case
of
essential facilities is that there
may
be capacity constraints which
make it impossible
for
access to be provided. However,
DB
Schenker does not believe
that the alleged capacity constraints
at
the Maritime Terminal constitute an objective
justification within the meaning
of
previous decisions since there are solutions which
would allow any lack
of
space to be overcome (See Frankfurt Airports OJ [1998] I
72130,
where the Commission rejected the airport authority's arguments on capacity constraints).
4. Viable Alternative Facility
4.1. Southampton is the second biggest container port in the
UK
and handles well in
excess
of
1.5m TEU per annum. Southampton has three intermodal rail terminals, two
of
which are operated by Freightliner (Maritime Terminal and Millbrook) and a one which is
IDBI
SCHENKER
9/11
container trains using mechanical side loaders to load and discharge trains and by 2010,
DB Schenker was operating up to 4 deep sea container trains per day from the terminal to
Hams Hall, Birch Coppice ('BIFT'), Burton-on-Trent, Wakefield and Trafford Park.
4.8. Services from the Herbert Walker Avenue Terminal were normally around 24
platforms in length and for gauge reasons were largely made up
of
FAA-type wagons
which were very long for specifically carrying 40-foot containers -so the number of
containers per train was very low per train
impact~ificantly
on the economics
of
the
operation resulting
in
utilisation factors
of
around
DB Schenker refutes
Freightliner's assertion the up to 8 trains a
day
were operated by DB Schenker from the
Herbert Walker Avenue Terminal, the most it was possible to operate was 5 trains per
day.
4.9. Services have since commonly increased to be around
31
platforms in length being
comprised
of
more suitable wagon types able to
conv~ifferent
types
of
containers
leading to an increase
in
utilisation factors
of
around · These considerations,
combined with the fact that the Herbert Walker Avenue Terminal is much smaller and
significantly less well-equipped than Freightliner's two terminals at Southampton (e.g. it
has no overhead RMGs) mean that further development
of
services cannot be achieved.
4.1
0.
DB Schenker
is,
therefore, not suggesting that the Herbert Walker Avenue Terminal
has suddenly become uneconomical (as Freightliner assert). Rather, the profile and
growth of train length, service delivery and much improved utilisation factors have led to
the terminal operating at capacity with an average of 4.5 trains per day being handled.
4.11. That being said, DB Schenker continues to maintain that operating costs at the
Maritime Terminal are significantly less than those at the Herbert Walker Avenue Terminal
and, contrary to Freightliner's assertion that DB Schenker offers rates cheaper than
Freightliner's own, DB Schenker believes the opposite to be true. DB Schenker has in fact
lost a customer contract to Freightliner in recent weeks because the customer informed
DB Schenker that its rates were higher than the competition.
4.12. DB Schenker maintains that the Herbert Walker Avenue Terminal is not sustainable
from an operational or financial perspective
for
further development and growth as it is
both complex and unreliable to operate. Above all it is significantly more expensive per
unit than the Maritime Terminal thereby creating
an
insurmountable cost disadvantage.
DB Schenker, therefore, submits that the only way for it (and indeed other operators) to
compete with Freightliner on an equal footing is to use the Maritime Terminal situated
directly behind the quayside.
4.13. Freightliner also maintains that its Millbrook Terminal
is
a commercially viable
alternative to the Maritime Terminal. DB Schenker disagrees. Millbrook is just as far from
the quayside as the Herbert Walker Avenue Terminal and would require a similarly
complex operation. lt also does not allow the same length
of
train that can be
accommodated at the Maritime Terminal. Notwithstanding these comments, DB Schenker
acknowledges that Freightliner has offered it a 'window' for a short train at its Millbrook
facility. This offer remains under consideration by DB Schenker.
4.14. DB Schenker has set out within the document at Annex 1 a comparison
of
operations and costs (as estimated) between the Maritime Terminal and those
of
the
Herbert Walker Avenue Terminal. This information clearly demonstrates why the Herbert
IDBI
SCHENKER
11/11
4.17.
In
its representations Freightliner acknowledges that an additional path each hour
will be required to accommodate the future growth
in
demand. lt is essential therefore, in
DB Schenker's view, that all 3 terminals at Southampton are operated efficiently to
maximise capacity for the throughput
of
containers. The fact that the largest and most
suitable facility (i.e. the Maritime Terminal) is used for activities that could be carried out
elsewhere and that
do
not contribute to the throughput
of
containers (most notably
Freightliner's locomotive and national wagon repair and maintenance facility) means that
the maximisation
of
capacity for revenue earning intermodal trains is unduly constrained.
DB Schenker hopes that this response to Freightliner's representations is helpful. If you
have any queries
or
require any further information, please let me know.
Yours sincerely,
Nige/ Oatway
Access Manager

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT