Freight calls for level playing field in upcoming spending review

A new report by Rail Partners reveals a stark warning for the UK's transport sector as a new report has revealed the cost of moving goods by rail has skyrocketed over the past decade, rising three times faster than road haulage.

The group claims that this rise has been driven in part by government policy and is hindering the growth of rail freight and undermining efforts to decarbonise supply chains.

The report, titled "A Greener Track," highlights the significant challenges facing rail freight operators. While the UK government has set targets for rail freight growth, the rising costs are creating a significant barrier to modal shift. The government has repeatedly said that a mandate for growth in rail freight will be made when Great British Railways is established but has not committed to a target.

Rail Partners and industry leaders are now urging the government to take decisive action. They are calling for a more favourable environment for rail freight operators within the upcoming legislative consultation on rail reform. This includes measures such as retaining vital legal protections, ensuring a stable charging regime, and addressing the widening cost gap between rail and road transport.

GB Railfreight chief executive, John Smith OBE, said: “There is broad consensus on the economic, environmental and societal benefits of rail freight to us all. This report sets out the need for a level playing field between different modes of freight transport to drive growth.

“Government policy decisions, such as the freeze on fuel duty, continue to benefit road freight over rail freight. As rail freight operators, we want to continue to invest in the UK and stand ready to work with government on policies that will make rail more competitive to support growth and the delivery of their missions.”

The report emphasises the critical economic and environmental contributions of rail freight. According to the report, the sector delivers £2.45 billion in economic benefits to the UK each year, with a significant portion of these benefits generated outside of London and the South East.

“Rail freight is one of the lowest-carbon forms of land transport, but with rail costs rising three times faster than road, Britain increasingly risks losing out on the benefits the sector has to offer in terms of growth and supporting government’s wider missions. 

The report calls for a review of track access charges which have continually risen whilst fuel duty has not risen in 14 years. there has been a 26% real terms increase in track access charges paid by freight operators since 2015. Recently, the DfT waived track access charges for new entrants to rail freight for six months. It’s currently due to end in April. The government has given no indication that it will extend it.

It also recommends longer access rights that would in turn encourage investment and a more stable charging environment that can encourage a shift from road to rail. The report highlights a 7% percentage difference in favour of road freight for cost-per-mile.

Commenting on the report, Rail Partners chief executive Andy Bagnall, said: “Rail freight is one of the lowest-carbon forms of land transport, but with rail costs rising three times faster than road, Britain increasingly risks losing out on the benefits the sector has to offer in terms of growth and supporting government’s wider missions.”

“Freight operating companies want to invest in the UK and work with government to make rail more competitive, to help decarbonise the transport sector and reduce congestion on roads”