Operators convene summit ahead of budget to unlock rail freight growth

Senior freight leaders gathered in London yesterday at Rail Partners’ Delivering Growth Summit, to discuss the role of rail freight in helping to deliver on the government’s ambitions for economic growth and supporting Britain’s wider industrial strategy. The meeting focused on practical solutions to boost rail freight growth, including how to strengthen business confidence to secure new investment in services. 

The event was attended by representatives from The Department for Transport and Treasury, Transport Scotland, the rail regulator (ORR) and Network Rail along with the five major freight operators, who collectively are responsible for 99% of freight volumes in the UK.  

Following the previous government’s commitment to grow rail freight by 75% by 2050, the new Labour government has committed to setting a rail freight growth target, but concrete actions are needed to achieve growth and to help freight compete with more carbon intensive modes of transport. 

Rail freight makes a significant contribution to wider economic growth in sectors from FMCG to construction, adding £2.45bn in value to UK plc every year. The Summit was therefore an important initial opportunity for freight operators to demonstrate the role rail freight can play in delivering the new government’s economic and green agendas.  

Freight operators have invested more than £3bn since privatisation to improve the performance, safety, and reliability of freight services and have identified opportunities for future investment. To help unlock that investment, businesses are looking to partner with government on mitigating rising energy costs and track access charges, bolstering business confidence and ensuring network reliability. 

The Summit was also an opportunity to engage with government on the structure of Great British Railways. With a second rail Bill expected in 2025, freight operators have welcomed government’s commitment to giving the new body a statutory duty to promote the movement of goods by rail, but getting the detail of the legislation right will be essential to ensure freight can grow within a reformed railway. 

Ahead of the budget, Rail Partners has highlighted the need for a more level playing field between transport modes. To support this, it is asking the governments in Westminster and Scotland to continue to drive modal shift through a doubling of the Mode Shift Revenue Support (MSRS) Grant, which is up for renewal at the end of the 2024-25 financial year. MSRS is a highly effective scheme, with an average benefit-cost ratio of more than 6:1, helping to remove 900,000 HGVs per year from Britain’s roads. 

Rail freight holds a significant carbon advantage over road transport with the average diesel-hauled freight service producing 76% less CO2 per tonne, helping Britain towards its wider environmental targets such as reaching net zero. Rail freight growth also stands to benefit road users, as each additional freight service has the potential to remove up to 129 HGV movements at a time. 

Following the summit, Andy Bagnall, chief executive of Rail Partners said: 

‘Rail freight has huge potential as an enabler of green economic growth, and we want to work with government to ensure a growing market. But rail freight growth will not just happen on its own. It is vital that government and industry work in partnership to ensure that the conditions are right for investment, to allow more goods to move by rail in future. 

‘Creating a level playing field between transport modes through the right incentives will ensure rail can compete fairly with road haulage, securing future investment from rail freight companies in new and greener services.’ 

Andrea Rossi, CEO, DB Cargo, said: 

‘Rail freight has huge potential to support Britain’s economic ambitions and its net zero targets, so it’s important to have the right policy framework in place to support ongoing investment.  

‘We need to ensure the costs associated with energy and track access make choosing rail an affordable option for our customers who are working hard to grow their businesses, while also decarbonising their supply chains.’