Irish Rail is proposing to increase its freight container charges by between 20 and 25 per cent in an attempt to stem annual losses of about €5 million, it has emerged.
Irish Rail has written to the Irish Exporters Association (IEA) informing the organisation that current rates do not adequately cover the costs involved in providing container based transport.
The company is determined to return the freight unit to profitability, even though it does not receive any direct State support. It is understood the freight division overall is likely to lose about €8.6 million this year, with about €5 million of that associated with container traffic.
In an attempt to address these losses the company wants customers to consider hiring full trainloads rather than individual containers.
It is understood the company has told the IEA that while costs have been reduced in the container business, Irish Rail cannot absorb the substantial losses anymore.
The company has suggested to the IEA that it lobby the Department of Transport for a subvention for full trainloads. The company believes this might allow freight to compete efficiently with road transport.
The company has long maintained that grant aid or subsidies should be available because rail transport is more efficient and environmentally sustainable than road alternatives.
Irish Rail has told the IEA that full trainloads is the way forward, although it is understood customers have been reluctant so far to engage with this idea. However the latest price increases - due to come into force in January - might alter the companies' position.
Irish Rail's freight business of has been loss-making for several years. It is understood losses last year stood at about €15 million. However, the company has won new business in recent months, including a contract from Coillte for the transport of pulp wood. But the company is obliged by the Department of Transport to return to profitability.
It is understood the company is not phasing in the price increases until January in case some concession on the issue of freight is included in December's budget. It wants to allow exporters and other firms to discuss the issue with Government.
The issue of cargo has become controversial over recent months following the decision by Aer Lingus to phase out its short haul cargo services. While this greatly angered exporting companies, it is understood private contractors and other airlines have taken up the slack.
While for large industrial companies the issue of rail and air freight is vitally important, companies producing smaller goods tend to use the road network.
