Key issues for rail freight from a legal perspective

Rail freight has an essential role to play in achieving Net Zero and supporting the growth of the UK economy. Burges Salmon’s nationally acclaimed specialist Rail Group, comprising over 40 rail experienced lawyers, is proud to support organisations across the sector on a broad range of matters.

Our experience in the rail freight sector includes advising clients on regulatory issues, including access agreements, charging arrangements, contested applications for access and rights to compensation in the event of disruption and Network Change. For example, we supported the rail freight operating sector with the regulatory arrangements associated with the deployment of ETCS across the network as part of the Digital Railway Programme. We also advise on compliance with ESG regulation, competition law and health and safety.

We work closely with our clients, building a collaborative relationship that allows us to successfully deliver strategic projects. We advise on all aspects of the rail infrastructure life cycle: planning, land acquisition, financing, construction, ongoing maintenance and the development of net zero solutions for buildings (for example, the installation of roof-top solar or battery energy storage solutions). We also advise on a variety of other strategic projects, from the introduction of innovative technology to increase operational efficiency to the modification of rolling stock to include battery technology.

The industry is in a period of change and the current rail reform agenda presents an opportunity to evolve existing industry structures and incentives to better meet the needs of the rail freight sector. This is particularly important given the significant environmental benefits of modal shift to rail freight.

The Government’s announcement of its ‘credible, yet stretching’ rail freight growth target of 75% net freight tonne kilometres by 2050 is a positive step towards strengthening the place of freight on the rail network and giving confidence to the industry’s customers and investors. Whilst an ambitious rail freight target is important to drive behaviours, effective policies and plans that underpin that target will need to be developed and implemented to ensure that growth is delivered in practice.

Key areas from a legal perspective
We are closely monitoring developments in the following key areas:

• Structural rail reform – The draft Rail Reform Bill was published in February 2024 for pre-legislative scrutiny. It provides that the Secretary of State may designate a body as the Integrated Rail Body who may act as both an infrastructure manager and also specify railway passenger services and manage operator contracts. The Integrated Rail Body will have a licence requiring it to make appropriate provision for freight services. We will be closely monitoring developments in this area as the Bill is considered by the Transport Select Committee.

• Access reform –Change to the regulatory regime is being considered and could have a significant impact for freight operators. We frequently hear that it is challenging for rail freight to be competitive with road haulage when the costs of track access are high. It is important that the options in relation to track access charges are carefully considered. Compensation under Schedule 4 and 8 is also a hot topic, recognising the importance of incentivising good infrastructure management performance and compensating freight operators for the financial impact of infrastructure issues.

• Infrastructure investment – Plans to enhance network capacity, improve performance and electrify key freight routes are essential so that rail freight can grow and unlock its potential. Network Rail’s Strategic Business Plan for England and Wales in Control Period 7 includes plans to tackle performance challenges on key freight corridors, improve timetables to allow for more freight capacity and invest in structures to enable longer and heavier freight services. At the same time, it is also important to encourage investment in new infrastructure, particularly around key freight corridors to ensure hubs and terminals are located in the right places with strong rail connectivity.

• Planning reform – Planning policies should support the needs of the freight and logistics sector. The Department for Transport and Department for Levelling Up, Housing and Communities held a Call for Evidence in 2023 seeking views on how the planning system can better support supply chains and the freight sector. At the time of writing we await the findings from this consultation.

We are passionate about supporting our clients through this period of change and helping them to deliver strategic projects to grow their business and decarbonise their operations.

With lawyers qualified in England & Wales, Scotland and Northern Ireland, we can support you throughout the UK. We’re widely respected for providing quick, clear and pragmatic advice based on a deep understanding of the rail industry’s contracting and regulatory framework.

By Lydia Cullimore, Burges Salmon