DB Schenker Rail (UK) - History - English, Welsh and Scottish Railway

English, Welsh and Scottish Railway

The company was formed as North and South Railways in 1995 by a consortium headed by Wisconsin Central, with additional financing provided by the financial sector, including Berkshire Partners and Fay Richwhite.

The company's first acquisition was that of Rail Express Systems on 9 December 1995, for £24 million. With this came the contract for the Royal Mail train service, including the Travelling Post Office trains; the contract was one of the most profitable obtained by the company. Then, on 24 February 1996, British Rail's three trainload freight companies - Loadhaul Ltd, Mainline Freight Ltd and Transrail Freight Ltd - were acquired for a total of £225 million. All four companies were subsequently merged into North and South Railways, and on 10 July 1996 the name English, Welsh and Scottish Railway, or EWS for short, was adopted.

One of the first actions of the enlarged company was to seek volunteers for redundancy, as it sought to reduce staff numbers by around 3000, from 7600.

On 22 November 1997 EWS took over 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. At the time of the takeover, it had 150 locomotives including the specialised Class 92 locomotives for the Channel Tunnel, and was making a yearly loss of around £65 million. Railfreight Distribution was renamed English, Welsh and Scottish Railway International Ltd on 1 December 1998.

The new company had over 900 locomotives and 19,000 freight wagons, and 7,000 employees. Track access charges were renegotiated and after 1800 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 2000 new wagons.

EWS's services included mail, locomotive hire, waggonload 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. Additionally, in the decade following privatisation EWS began to compete for container traffic contracts, and its competitor Freightliner Group also entered into competition for trainload freight, as did DRS (a subsidiary of British Nuclear Fuels) which was initially set up to move radioactive materials by rail. EWS's turnover in 1999 was £533.7 million (a 80% market share by value) with a profit of £32.8 million.

National Power who had operated trains for their power stations under the open access regulations had their train operations acquired by EWS in 1998.

In 2001 the Canadian National Railway (CN) bought Wisconsin Central Transportation Corporation for its North American holdings (Wisconsin Central Ltd.) and so became a major shareholder (42.5%) of EWS; the company announced its intentions to divest itself of Wisconsin Central's foreign holdings.

The contract with Royal Mail was lost in 2003 (switching to road transport), due to cost. The French rail freight subsidiary Euro Cargo Rail was founded in 2005.

By 2006 EWS's turnover was approaching £1 billion, while profit was £14 million.

Read more about this topic:  DB Schenker Rail (UK), History

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