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Government must seize the moment by committing to an ambitious target to treble rail freight by 2050

By John Thomas, Director of Policy

Government must seize the moment by committing to an ambitious target to treble rail freight by 2050

11 October 2022
Liam Bogues, freight policy lead

If you ask most people what they think of when they think about the railway, they’ll likely immediately think about their commute to work, or a day trip they have taken, or maybe enthusiasts think of the trains themselves! Very few people’s first thought is rail freight.

The railway was of course, initially built for the transportation of goods up and down the country, a role it still performs today  and which silently underpins our everyday lives without the majority of people giving it a second thought. Freight trains carry fuel to power stations, building materials to build new homes, rubbish out of our city centres and goods to the shelves of our shops. But in doing so, every freight train is contributing to our economic and environmental wellbeing. That is why, as we look to the reform of our railway, we cannot afford to underplay or leave to chance the opportunity to grow this sector. We must be ambitious and capture the demand we know exists and in doing so support net zero ambitions and spread economic benefits throughout the country.

There has been a subtle but important policy shift towards the sector in recent years, compounded by Brexit, the pandemic and in light of the legislative commitment to achieve net zero carbon emissions by 2050. The market itself is also responding as customers look for low carbon routes to market. This is most notable in the tone and content of the Plan for Rail, published in May 2021 which our members welcomed. In particular it commended freight operators for the resilience they demonstrated during the pandemic to ensure that key freight flows were maintained, and the significant agility that rail freight, as a largely private sector industry, has shown in responding to changing customer demands with previously prominent markets like coal having been replaced by the expansion of intermodal and construction traffic.

Perhaps most importantly, it committed to a government set freight growth target. The industry has been calling for this for some time and we have already seen the transformative effect that such a target can have in Scotland. European counterparts including Germany, France and Spain have also committed to growing rail freight.

The Great British Railways Transition Team has recently launched a call for evidence to understand the scope for rail freight growth in the future, and receive the sector’s view on the design of the growth target. The evidence received will be used to inform a series of options for the future rail freight growth target. We have to be ambitious. Not just for the benefit of the sector, but for the benefit of Britain. Today the rail freight market contributes £2.45bn to UK plc every year, with an estimated 90% of these benefits occurring outside of London and the South East. Using rail freight also removes the need for 7 million HGV movements whilst saving 1.4m tonnes of CO2  every year.

That is why we are calling for an ambitious freight growth target to treble rail freight by 2050  supported by policies, incentives and investment to achieve freight growth, creating an environment for growth.

Analysis of potential demand suggests that trebling rail freight by 2050 is achievable which in turn could treble all the benefits I outlined above. In order for the long-term target to be met, interim targets will also be needed and progress measured against these.

As an industry that makes significant long-term investments, a track access and charging policy framework that is stable and affordable is of paramount importance to encourage investment and support the achievement of the target.

Since privatisation freight operators have made investments totalling upwards of £3bn to improve the productivity, reliability and safety of their services.

Operators are ready to build on this proud track record and help to realise freight growth but this can only happen if rail reform results in a policy and regulatory environment which  provides the necessary level of confidence for freight operators to continue to make investments.

We want to see a wider use of incentives to help make rail the mode of choice for potential customers. An example is the Mode Shift Revenue Support (MSRS) grant, provided by Government, which has been successful in attracting price sensitive container traffic to rail from road. It involves relatively small amounts of public funding, but provides an important role by helping to address the cost differential between rail and road haulage in recognition of the wider environmental benefits of rail. It is estimated the scheme today prevents 900,000 diesel HGV movements per year and there is a strong case for at least doubling the scheme in future funding cycles.

In a constrained fiscal environment, freight growth in the short-term does not have to be contingent on major infrastructure investments. Making best use of existing railway capacity can support a growing rail freight sector. However, there are a series of infrastructure and infill electrification schemes that would enable our proposed 2050 freight growth target to be met and accelerate the decarbonisation of the freight sector. Clear timelines and commitments to the delivery of the schemes that we have outlined will enable the private sector to make substantial complementary investments in new carbon friendly rolling stock and rail connected facilities.

While 2050 is a generation away, the need to start to strive towards an ambitious trebling of rail freight growth, is not. As an industry that invests in long-lived assets, policy decisions made now will have a tangible impact on the rail freight sector’s ability to grow in the longer-term. A vibrant rail freight sector, which has certainty for operators and which is able to respond reliably to customer demand, has the potential to deliver for Britain in the long term. We must not be cautious or apologetic for being ambitious, we must seize the opportunity presented to us and create the right environment to encourage investment, use the network effectively and support growth to enable us to secure the benefits to the environment and economy that rail freight brings.

Read our full submission here.


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