Ensuring Rail Freight is on the Right Track

Ellis Shelton, Policy Advisor at Logistics UK explores the government's anticipated rail reforms and what that means for freight

Rail freight carries over £30 billion in goods and contributes £2.45 billion to the UK economy each year. It is also vital for achieving net zero, as it is estimated to avert seven million lorry journeys per year, preventing 1.4 million tonnes of CO2 emissions annually. Maximising the role of rail as part of an integrated logistics system will see additional modal shift from road to rail, reducing emissions further. This must be supported by increased capacity on the railway for freight, additional infrastructure and space for logistics to facilitate multimodal interchange at key hubs, and fairer track access charges.

While the rail freight sector has not directly been involved in the recent industrial relations disputes, strikes amongst Network Rail signallers have reduced the operating hours of the railway. As a result, industrial action indirectly impacts the freight sector due to reduced capacity on the lines. Around 30 per cent of all freight movement was cancelled on strike days, while total rail freight moved between 1 July and 30 September 2022, was four billion net tonne kilometres lower when compared with the same time period in 2021.

In response to the recent strikes, government has proposed a Strikes (Minimum Service Levels) Bill which, if passed, would allow the secretary of State to make regulations outlining the minimum service required for rail during industrial action. At present, there is no general requirement to maintain minimum service levels in critical services under UK trade union law.

The government has said that rail is one of the sectors for which the legislation would be implemented first, while unions and workers would have to comply or face losing protections against being sued or dismissed. However, it’s worth noting that the Bill does not restrict unions from calling industrial action short of strike, such as the overtime bans which are currently materially impacting services across the railway network.

In reaction to this proposal, the Transport Committee has launched an inquest to examine the practical details of the Bill on the rail sector – this will include both public and freight – and has announced a call for evidence. The committee plans to scrutinise the process by which minimum service levels for rail services will be defined in regulations, and how they could work in practice, should the Bill become law. Within the call for evidence, the committee has asked both public and freight operators to respond, addressing how minimum service levels could operate on the railway and the particular factors that need to be taken into account in rail. In response, Logistics UK has highlighted how, whether during normal or shortened hours, sufficient paths should be made available to rail freight operators to allow for the continuation of freight being transported, given its significant value to the country – both economically and environmentally.

In his first rail speech – George Bradshaw address 2023 – since becoming Transport Secretary, Mark Harper MP, highlighted the current broken model commenting that it was financially unsustainable and unfair to continue asking taxpayers to foot the bill. He recognised that, if left untreated, passengers would be driven away by poor performance, leading to fewer operational services, and stated that only major reform can break that cycle.

Logistics UK is one of the UK’s leading business groups, representing logistics businesses which are vital to keeping the UK trading, and more than seven million people directly employed in the making, selling and moving of goods. With COVID-19, Brexit, new technology and other disruptive forces driving change in the way goods move across borders and through the supply chain, logistics has never been more important to UK plc. Logistics UK supports, shapes and stands up for safe and efficient logistics, and is the only business group which represents the whole industry, with members from the road, rail, sea and air industries, as well as the buyers of freight services such as retailers and manufacturers whose businesses depend on the efficient movement of goods. For more information about the organisation and its work, including its ground-breaking research into the impacts of Covid-19 on the whole supply chain, please visit logistics.org.uk.

The speech reaffirmed government’s commitment to rail, such as its £96 billion investment into the Integrated Rail Plan, emphasised the importance of rail freight and provided greater clarity surrounding the creation and role of Great British Railways (GBR).

Currently, ministers can become involved in decisions affecting timetables and other operational matters. However, moving forward this will be the responsibility of experts in given regional GBR divisions, working in close partnership with regional bodies. This, along with the creation of a dedicated Strategic Freight Unit – tasked with more national coordination and setting a long-term freight growth target – is an encouraging step forward for rail freight growth and greater recognition of the importance freight plays on the network.

Overall, Logistics UK is pleased that the important role rail freight plays in the UK economy is being acknowledged on a wider scale and hopes that, with reform, we will see a greater prioritisation of the sector, including during periods where a reduced timetable is operating.