On 20 December 2023, the Secretary of State for Transport set the “highly ambitious target” to achieve a 75% increase in net freight tonne kilometres by 2050. This is the first long-term target of its kind, demonstrating the Government’s commitment to increasing the amount of freight transported on the rail network as outlined in its Plan for Rail. 

A freight future?

Rail freight plays a critical role in supply chain resilience and in delivering major economic and social benefits worth an estimated £2.5 billion to the UK each year. Together with its ability to reduce road congestion and connect markets over long distances, greater use of rail freight can be a viable solution for customers and the Government alike looking to meet their Net Zero targets. 

Whilst the potential opportunity is clear, there are perceived barriers to modal shift to rail freight: network capacity constraints, performance challenges and costs. 

Setting the target for rail freight growth

The Government commissioned the Great British Railways Transition’s Team (“GBRTT”) to develop a range of options for a long-term rail freight growth target.  In July 2022 GBRTT held a Call for Evidence to develop its understanding of how much of the current and future market demand for freight could be met by rail (see our previous post for further details).

Alongside the Government’s publication of the rail freight growth target, GBRTT has published a report summarising the findings from the Call for Evidence and an evidence pack setting out the approach it has taken when developing options for the rail freight growth target and the evidence considered. 

Following the GBRTT’s recommendations, the Government announced what it considers to be a “credible, yet stretching” rail freight growth target of 75% net freight tonne kilometres by 2050. The purpose of the target is to ensure the Government remains committed to strengthening the place of freight on the rail network, giving confidence to the industry’s customers and investors to unleash rail freight’s full potential. While the target is viewed by the Government as “highly ambitious”, it has also made clear that it is not a ceiling and the industry should be ambitious for further growth. 

Delivering the target

No additional commitments were made by Government as part of the announcement of the rail freight growth target. Rather, the Secretary of State for Transport summarised the following actions that the Government is already taking to support rail freight growth:

  • Placing rail freight at the heart of rail reforms: In accordance with the Plan for Rail and as part of the establishment of the Great British Railways (“GBR”), the Government intends to impose a statutory duty on GBR to promote rail freight to secure economic, environmental and social benefits.
  • Setting short term targets: The Government will continue to mandate short-term growth targets for rail freight, noting that the ORR’s Final Determination (England & Wales) includes a 7.5% freight growth target for England and Wales and the Final Determination (Scotland) includes a 8.7% growth target for Scotland for Control Period 7 (2024 -2029). 
  • Investment to improve reliability and capacity:  The Government will continue to make commitments to improve punctuality and reliability for freight operators, including investment in high-priority structures for heavy axle weights and freight safety improvements. The Network North plan published last October included plans to upgrade Ely Junction to accommodate an extra six freight trains per day from the Port of Felixstowe.
  • Supporting modal shift: The Government plans to continue to support the Modal Shift Revenue Grant Scheme that assists companies with the operating costs associated with running rail or inland water freight transport.  The Government launched a Call for Evidence on 4 December 2023 in relation to this scheme with a closing date of 2 February 2024 for responses.
  • Supporting international rail freight: The Government will continue to engage regularly with the international rail sector to improve freight traffic flows and operate more international freight services.  
  • Recognising rail freight in the planning regime: Both the Department for Transport and the Department for Levelling Up, Housing and Communities will continue to collaborate to ensure sufficient land is allocated to service the needs of freight.  The Call for Evidence on how the planning system can better meet the needs of the freight and logistics sector closed in October 2023 (see our previous post for further details) and we await the findings. The Government also intends on completing its review of the national networks national policy statement by March 2024, which includes an updated needs case for the development of strategic rail freight interchanges.
  • Releasing capacity: The Government will work with ORR and Network Rail to ensure unused access rights that are no longer required for passenger services are released, providing new opportunities for rail freight. 
  • Supporting innovation: The Government will continue investing in rail research, including supporting the trialling of a range of new rail freight technologies to encourage industry investment through its First of a Kind innovation programme. 

Is this the right track for freight?

The announcement of an ambitious rail freight target is welcome news and hopefully will drive behaviours to place greater emphasis on supporting rail freight growth as new structures and policy are developed during this period of change for the sector. 

However, for the rail freight target to have real significance, effective policies and plans that underpin the target will need to be developed and implemented to ensure that growth is delivered in practice. 

There are many well-established and experienced players in the freight operating market who know exactly where investment is needed to facilitate maximum growth – whether that be short in-fill electrification projects, track enhancement schemes to improve reliability or the delivery of new rail infrastructure to improve capacity in key areas.  The hope is that the rail freight growth will embolden key-decision makers to listen to these priorities and support associated investment. 

Key Takeaways

  • On 20 December 2023, Secretary of State for Transport announced first-of-its kind target to grow rail freight by at least 75% net freight tonne kilometres by 2050.
  • The purpose of the target is to strengthen the place of freight on the rail network, a signal of the Government’s support for and confidence in rail freight.  The target is not a ceiling and the industry should be ambitious for further growth.

If you have any questions regarding this article, please contact lydia.cullimore@burges-salmon.com or your usual Burges Salmon contact. 

This article was written by Lydia Cullimore and Madison Sutton.