In 1988, British Rail's (BR) freight operations were split into two divisions Railfreight Distribution (RfD) and Trainload Freight (TLF). RfD took over BR's Freightliner and Speedlink services and general wagonload and trainload services, excluding coal, petroleum, aggregates and metals. BR's bulk trainload services were handled by the Trainload Freight division. In 1991 the Rail Express Systems brand was created, to handle mail and postal services.
After the passing of the Railways Act 1993, five rail freight companies were formed from RfD and TLF. On 1 April 1994, TLF was split into three separate geographical businesses: Trainload Freight North East, Trainload Freight West and Trainload Freight South East, with each initially given existing contracts, based on the geographic origin of the traffic flow or in the case of power station coal the split was determined by the location of the power stations concerned. There were also some trainload services previously operated by the contract services business of RfD. The three new businesses were to be re-branded as Loadhaul, Mainline Freight and Transrail Freight for the short duration of their existence.
The remainder of RfD was split into two companies: Freightliner (container operations between ports), with the residual RfD company operating freight trains through the Channel Tunnel. The Mail and Parcels business were sold as Rail Express Systems and Red Star Parcels.
The companies were subsequently put up for sale by competitive tender.
English, Welsh & Scottish Railway
To bid for the ex-BR businesses being offered for sale, North and South Railways Limited was formed. It was owned by a consortium headed by Wisconsin Central, with financing provided by Berkshire Partners, Goldman Sachs and Fay Richwhite.
On 9 December 1995, North and South Railways purchased Rail Express Systems for £24 million. With this came the contract for the Royal Mail train service, including the Travelling Post Office trains, and the contract to haul the Royal Train. A fleet of 164 locomotives and 677 postal vans were included along with depots at Bristol Barton Hill, Cambridge, Crewe and London Euston.
Then on 24 February 1996, British Rail's three trainload freight companies, Loadhaul, Mainline Freight and Transrail Freight were acquired for £225 million. The sale included 914 locomotives and 19,310 wagons.
All four companies were subsequently merged into North and South Railways, nullifying the government's effort to create multiple competitive rail freight firms through the privatisation; the decision to allow the creation of a rail freight company with a dominant market position was justified by the additional competition faced from other transport modes. At the time rail had a 6% share of the freight market.
Initially, the four companies continued to trade under their existing names. On 25 April 1996, the EWS brand was unveiled.
On 10 July 1996 the holding company's name was changed to English, Welsh & Scottish Railway Holdings Limited. In October 1996, Loadhaul and Mainline Freight were merged with Transrail Freight, and employees transferred to Transrail Freight, which was then renamed to English, Welsh & Scottish Railway Limited.
One of the first actions of the enlarged company was to seek volunteers for redundancy, as it sought to reduce staff numbers by around 3,000, from 7,600.
On 24 December 1996, EWS was announced as the preferred bidder for the loss-making Railfreight Distribution, for which it received grants and subsidies estimated to amount to £242 million over eight years . including subsidies for the use of the Channel Tunnel. Railfreight Distribution's businesses included international containerised freight, movement of cars and automotive components by rail, and freight services for the Ministry of Defence. The sale included 157 locomotives. It was concluded on 12 March 1997. At this point, EWS controlled 90% of the rail freight market. Railfreight Distribution was renamed English Welsh & Scottish Railway International on 1 December 1998.
The new company had over 900 locomotives, 19,000 freight wagons, and 7,000 employees. Track access charges were renegotiated and after 1,800 job redundancies the workers involved in profit sharing and other incentivised working plans; as a result shipping rates were reduced by over 30%. Many locomotives inherited on foundation were considered unreliable, and expensive to maintain; the company invested heavily in modernisation of its rolling stock; by 2002 £750 million had been invested, including 280 new locomotives and over 2,000 new wagons.[note 2]
Big Beasties logo used on a locomotive.
The railway featured a logo that was colloquially known as the "Beasties", consisting of three heads: the lion of England, the dragon of Wales and the stag of Scotland. A larger version of the logo was called the "Big Beasties".
Services included mail, locomotive hire, wagonload traffic (branded 'Enterprise', founded by Transrail Freight), cross channel trains via the Channel Tunnel, trainload freight including oil, aggregates, cement and traffic related to the coal, electricity generation and steel industries, and infrastructure trains for Railtrack. Following privatisation EWS began to compete for Intermodal contracts,[note 3] while it faced competition from Freightliner in its core markets. Turnover in 1999 was £533.7 million, an 80% market share by value.
On 1 April 1998, open access operator National Power's rail division was taken over with six Class 59 locomotives and 106 wagons.
In January 2001, the Canadian National Railway announced it had agreed to purchase Wisconsin Central. The deal, which included Wisconsin Central's 42.5% stake in EWS, was concluded in October 2001.
The contract with Royal Mail was lost in 2003 to road transport. EWS acquired the assets of wagon bogie company, Probotec Limited in 2005,[note 4] It was formed into a new subsidiary, Axiom Rail that also took over responsibility for some of the depots and leasing surplus locomotives overseas.
In October 2005, a subsidiary in France trading as Euro Cargo Rail commenced operating. Several Class 66 locomotives were transferred.
In November 2005, EWS acquired wagon maintenance business Marcroft. As a result of the potential of the acquisition to reduce competition in the UK wagon repair market the acquisition was referred to the Competition Commission by the Office of Fair Trading, who required EWS to sell all or part of the business excluding Marcroft's works at Stoke on Trent. That was incorporated into the Axiom business.
By 2006, turnover was approaching £1 billion. In 2006 the Office of Rail Regulation fined the company £4.1million for anti-competitive practices in the coal haulage business, in which it had held a near monopoly, following complaints by Enron and Freightliner Heavy Haul in 2001 and 2002.[note 5]
DB Cargo UK
On 28 June 2007, Deutsche Bahn announced it had agreed to purchase EWS, subject to receiving regulatory approval. for £309 million At the time EWS had a market share of around 70% in the United Kingdom and around 5,000 employees. After the transaction was approved by the European Commissioner for Competition, the sale was completed on 13 November 2007.
At the time of the sale, it was announced that EWS would not be rebranded, but on 1 January 2009, EWS was rebranded as DB Schenker along with Deutsche Bahn's Railion and DB Schenker divisions.
The first locomotive painted in DB Schenker livery was Class 59 59206 at Toton Depot in January 2009, being formally unveiled at the National Railway Museum, York on 21 January 2009. [note 6]
Class 90 90018 The Pride of Bellshill
in DB Schenker colours on a freight working in October 2016
In 2009, DB Schenker Rail began work to enable Class 92 hauled trains to operate freight services on the High Speed 1 by installing in cab TVM signalling. The project received funding from the European Commission and it was originally anticipated services would begin in early 2010. On 25 March 2011, for the first time a modified class 92 locomotive travelled from Dollands Moor to Singlewell using the TVM430 signalling system. The first of five planned test trains ran as a loaded container train from Hams Hall, West Midlands to Novara, Italy on 27 May 2011. DB planned to upgrade an additional five Class 92 locomotives to allow them to run on High Speed 1, making a fleet of six.
In July 2011, a trial run of wagons carrying curtain walled swap bodies built to a larger European loading gauge was run from Dollands Moor, Folkestone to east London. From 11 November 2011 a weekly service using European sized swap bodies has run between Barking, London and Wroclaw, Poland using High Speed 1.
On 2 March 2016, DB Schenker was rebranded as DB Cargo UK. On 17 October 2016, new DB Cargo UK CEO Hans-Georg Werner announced plans to cut 893 jobs in a bid to counter 'unprecedented' market changes. This was due to a combination of:
- Changes in Government energy policy had resulted in the early closure of coal-fired power stations, hence DB Cargo UK ran 78% fewer coal trains compared to 2015.
- UK steel volumes dropping, with the industry hit by high energy prices. This resulted in DB Cargo UK running 33% fewer steel trains from 2015. However, Werner recognised that "overall UK steel demand remains stable."
In 2017, DB Cargo UK announced a loss after tax for the financial year of £57 million against a turnover of £325 million.