Andy Bagnall, Director General at Rail Delivery Group explains this once in a generation opportunity for a transformative approach to rail freight
The ongoing heavy goods vehicle (HGV) driver shortage has shone a light on the critical role that the freight sector plays to keep the goods we rely on moving. Many people have rightly pointed towards rail freight as a solution to the challenges faced by the road sector. All Freight Operating Companies have experienced an uptick in enquiries from potential new rail customers wanting to understand more about rail freight’s offering, which has resulted in several new rail services over the past two months. Indeed, major existing customers like Tesco are committed to increasing the amount of their produce moved by rail from 65,000 containers to 90,000 by the end of this year.
The desire to move more goods by rail is not just a recent phenomenon resulting from HGV driver shortages. Increasingly, environmentally conscious customers are looking to rail freight as a low-carbon solution, with each tonne of freight transported by rail producing 76 per cent less carbon than the equivalent transported by road.
The economic benefits of rail freight are also well-established. Our recent research demonstrated that rail freight delivers approximately ￡2.45 billion to the country’s economy every year and is also supporting the levelling up agenda with 90 per cent of these benefits accruing outside of London and the South East.
Despite the ambitions of freight operators, within the existing rail and freight markets there are some fundamental constraints which continue to inhibit rail’s ability to pick up more volumes. While the use of rail has helped to alleviate some of the pressure at the UK’s major ports where containers have stacked up because of the HGV driver shortages, in many cases this has simply shifted container congestion up the tracks to inland rail freight terminals, with some now implementing a ‘one container in, one container out’ policy.
It continues to be more attractive for road hauliers to transport one longer HGV service from a port than providing potentially multiple short journeys from an in-land rail freight terminal to a good’s final destination. This is largely due to the fact that road movements from ports can be more lucrative with significant queues at in-land terminals not helping that equation. To address this, the road and rail sectors must continue to work together to ensure they are organised efficiently to deliver for customers, and society.
Issues surrounding rail capacity and infrastructure persist. There are currently 37 daily trains running out of Felixstowe, the UK’s largest port. Additional trains will not be able to run without further investment to improve the line between the port and the network in the wider region. Furthermore, acquiring new rail freight paths can be an arduous process because the benefits to freight customers are not included in capacity allocation assessments, this ultimately suppresses freight volumes and can restrict the sector’s ability to respond quickly to customer demands.
We now have the opportunity to address some of these barriers to make sure that rail freight can play an enhanced role within the freight and logistics sector in the future, increasing its economic and environmental contribution, but also making our supply chains more robust to deal with future shocks.
The Williams-Shapps Plan for Rail is full of positivity about the freight sector recognising the dynamism of the rail freight market which has adapted to support an evolving customer base and has improved productivity and performance by investing over ￡3 billion since rail privatisation.
Great British Railways (GBR) will have a statutory commitment to support freight growth underpinned by the introduction of a rail freight growth target. In line with the government’s commitment to decarbonise the UK economy by 2050, now is the time for an ambitious rail freight growth target which will unleash further private sector investment to improve connectivity.
As evidenced in Scotland, an ambitious freight growth target can catalyse a cultural change in how rail freight is treated within the industry. It will complement the delivery of some of the other key commitments made in the White Paper, such as an overhaul of the access framework and the creation of a national freight coordination team within GBR to act as a single point of contact for freight operators and customers across the network. The target will also inform decisions made on how the rail network is used and infrastructure investment. In turn, this will create huge opportunities to grow capacity for rail freight services on the UK network and deliver significant modal shift from road to rail.
The role of rail freight during the pandemic has also been recognised with the sector demonstrating great resilience to ensure that vital goods were transported to keep supermarket shelves stacked and warehouses stocked. Recent data from the Office of Rail and Road show that rail freight volumes have now returned to pre-pandemic levels. But we must do more than just get back to prepandemic levels.
Now, the goodwill that rail freight has accrued must be converted into meaningful policy change, and the commitments on rail freight outlined in the White Paper present a once in a generation opportunity for a transformative approach to rail freight in the UK.