UK Government Commits to More Intermodal Support for Rail Freight in Future

UK – At the 28th Annual Rail Freight Group Conference, held virtually earlier this month, rail minister Chris Heaton-Harris MP reaffirmed the government's commitment toward rail freight and outlined the crucial role it will play in decarbonising the future UK economy.

In a recorded message the minister laid out the administration’s vision for the future of freight transport, making it clear that rail would play a key role in cutting carbon emissions across the country and helping the UK meet its 2050 environmental targets. He said:

“I want to offer my heartfelt thanks for your incredible, almost heroic, response to Covid-19. Your efforts during this time have kept critical goods like medicines and food on the move up and down and across the country. Your hard work and dedication during this uniquely challenging time has been outstanding. Rail freight has a key role to play in our recovery from the crisis [offering] significant economic and environmental benefits.

“We remain committed to the modal shift of freight, as we aim to improve the environmental performance of the entire freight industry. We continue to support the need for an expanded network for Strategic Rail Freight Interchanges too, so the industry will be able to reach its full potential going forwards.”

The minister has become a great advocate for rail and as MP for Daventry, the home of DIRFT, he spoke in detail about his commitment to modal shift and the huge opportunities for the growth of the rail freight sector. He said rail freight would be at the forefront of change and had a crucial role to play in delivering the government’s vision for the future of Britain. He also welcomed the Crossmodal Future of UK Freight Strategy, due for publication next year.

The Minister fell short of putting specifics around increasing freight access to the network or increased train paths but emphasised the priority of a modal shift of freight to rail and the key role it would play in the ambitious Transport Decarbonisation Plan (to be published later this year), which will steer the future freight strategy.

After praising the RFG for its hard work in feeding into the debate and thanking its members, the minister gave way to  Maggie Simpson OBE, Director-General of the Rail Freight Group who said it was right that the sector be applauded for its incredible work during the pandemic. She said the conference was an excellent opportunity to not only recognise the challenges the sector has faced but also the huge success of rail freight this summer. Modal shift to rail is seen as a big way of decarbonising transport and an opportunity for rail freight.

This last point formed a key theme throughout the conference. Also tackled were the issues around the Covid-19 pandemic, port connectivity, HS2, rail reform, Brexit, the economy. Maggie Simpson concluded:

“Today’s conference has highlighted the real opportunity for rail freight to make a difference to the UK economy and environment as we move forward into post-Covid recovery, and with new global trading arrangements. Despite the challenges we face, the discussion today shows the sector’s commitment to grow and develop, and to embrace change in support of our customers needs.”

Certainly there are signs that the government might at last be turning towards a cohesive rail strategy after decades of criticism regarding how the industry is managed. In the 2019-2020 financial year, Network Rail spent 35.6% of its total £7.1 billion expenditure with small and medium-sized enterprises (SMEs), exceeding the government target of 33% of annual expenditure to be spent with SMEs by 2022. In real terms, this equates to a total of £2.52 billion and is the first time Network Rail has exceeded £2.5 billion in a single financial year. Chris Heaton-Harris again:

“More than ever it is vitally important that we support smaller businesses right across the country. I’m delighted that Network Rail has gone above and beyond the targets we set them, supporting jobs and smaller businesses from engineering to the service industry. Our railways have long been the lifeblood of this country and supporting thousands of smaller businesses only adds to that.”

The number of suppliers contracted directly by Network Rail was 4,246 in the 2019-2020 financial year, of which 3,051 (71.9%) were SMEs, reflecting an increase of 440 more SMEs than in 2017-18 (2,611) and Network Rail’s direct spend with SMEs increased more than 5% from 12.77 % in 2017-18 to 17.8% in 2019-20. Clive Berrington, Network Rail commercial and procurement director, said:

“Our extensive supply chain network plays a vital part in helping us run a safe and efficient railway and accelerate innovation to make Britain’s railway even better for passengers and freight users. We have focused a lot in the past two years to ensure Network Rail is more accessible to the SME market. We now work directly with over 3,000 SMEs, ranging from technology companies that design innovative solutions to keep the railway running safely to catering companies that replenish our teams working through the night.

“Since establishing our SME action plan in 2019, we have also launched several initiatives to make Network Rail easier to do business with and these results demonstrate we are on the right track. We have developed initiatives to make us more dependable and easier to work with by working smarter with our supply chain and involving them earlier in the planning phase to help us deliver work more efficiently. These initiatives include improved contracting strategies.”

Indirect SME spend also increased with a survey of Network Rail’s top 100 (by spend) tier 1 suppliers showing that indirect spend with SMEs rose to 17.8% in 2019-20 (an increase of 3.8% from 2017-18). Details of Network Rail’s procurement pipeline is updated every four weeks and is available to view on Network Rail’s website supply chain section.

Photo: Courtesy of RFG.