Debating the future of the sector at our 32nd Annual Rail Freight Conference

The prospects for rail freight growth – expanding both volumes and markets – are positive, according to speakers at Rail Freight Group’s annual conference, organised by Waterfront, on 26 September.

Guy Bates from the Network Rail Freight Team said that the 600 freight trains a day on the network currently is about the same number as at the start at CP6, when almost a tenth of them were power station coal trains. With coal traffic an increasingly distant memory, this shows that rail freight is attracting new business and that Network Rail is committed to facilitating new services. The government’s target of increasing rail freight by 75% by 2050 would mean 450 additional freight services a day.

Andrea Pearson, Deputy Director International Rail and Rail Freight, Department for Transport, said the new government is keen to push its version of rail reform at pace. Great British Railways will have a duty to promote rail freight. She said that DfT does appreciate the role that MSRS (Modal Shift Revenue Support) plays. The current scheme is due to finish in March next year, but the department is hoping for a rollover for at least a year and looking at future options to improve the scheme.

She asked ports and the industry generally to look at what they can do to help modal shift and praised DP World Southampton’s initiative to pay customers to use rail. John Trenchard from the port, explained that the Modal Shift Programme was working so well that it was being extended until the end of 2025. The programme pays for itself, making commercial sense, and a similar programme may be extended to London Gateway next year.

John Larkinson, Chief Executive, Office of Rail and Road, said that ORR was holding Network Rail to account for the 8% growth target for this control period, but acknowledged that a lot of what happens to grow freight is out of NR’s control and dependent on the private companies. He said that a key issue of rail reform will be who determines access and charges for freight operators.

Many speakers acknowledged that enquiries about rail freight are rising, often driven by end customers seeing to reduce their carbon emissions. This also raised the issue of electrification of the railway – and the potential problems with the price stability and availability of electricity. It was suggested that the UK follows the example of Germany where rail freight electricity prices are linked to diesel prices.

Tim Shoveller, Chief Executive Officer, Freightliner, said the industry needs to acknowledge that road freight is very cheap. It used to be that road and rail costs were equal on a Felixstowe to Birmingham run but now that crossover is north of Manchester.

Speakers were optimistic about new markets – especially express parcels, where there was potential to use existing rail-connected infrastructure. The transport of new fuels such as hydrogen and the carbon capture market, as well as the development of offshore wind farms are also seen as offering a lot of potential for rail freight. There was general agreement that a growth in international rail freight is desirable, but the costs of using both the Channel Tunnel and the HS1 line remain a challenge.

Thanks to all our speakers and to Waterfront for organising the conference.