Eurotunnel cuts rail freight charge

Source: Supply Chain Digital

Date :24/10/2007 10:25:32

Channel Tunnel operator Eurotunnel has slashed charges for its rail freight business after traffic slipped to one-tenth of its design capacity.

From next year, the average toll for a freight train will be cut by almost half to £3,000 as the company attempts to win back business from road hauliers.

Revival

The move comes as part of turnaround plans for the group, which is looking to return to profit after securing its financial future earlier this year.

The tunnel has the capacity to carry 10 million tonnes of rail freight every year, but the business has dwindled to just over one million tonnes this year amid competition from road transport firms and high security costs to prevent illegal immigration.

Eurotunnel, whose shareholders agreed a deal to wipe out much of the company's £6.2 billion debts in May, said its rail freight plans "represent an opportunity to tap into new markets with considerable potential".

The company wants to treble current rail freight levels to the three million tonnes carried in 1997. It has eventual plans to double this to six million.

Doncaster-based freight giant English, Welsh & Scottish Railway (EWS) and French network operator SNCF currently run freight services through the tunnel but Eurotunnel hopes the cheaper fees and more open access will attract more freight operators on both sides of the Channel.

Outlay

The lower average toll price of £3,000 is a flat rate per train, although final costs will also depend on the train's speed and the time at which it goes through the tunnel.

The changes represent a simpler pricing structure than the previous regime, under which Eurotunnel levied charges at different rates per tonne for each commodity carried.

Eurotunnel added that British and French rail networks would grow revenues due to the extra freight on their networks, while lower carbon emissions from decreased road haulage would also benefit the environment.

October 24, 2007

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