Leading consumer groups including Nestlé and logistics companies such as port operator DP World are turning to rail to transport goods across the UK amid growing concerns over road congestion, lorry driver shortages and the environmental impact of trucking.
The UK’s rail network currently transports only about 10 per cent of freight but that share is likely to rise as more companies are attracted to the potential cost and environmental benefits, according to transport executives.
Sally Wright, head of delivery at Nestlé’s UK and Ireland business, said the company planned to run a trial rail delivery between the midlands and Essex this month. The group hopes to transport its petcare products, such as Felix cat food, before also carrying food such as KitKat by rail.
“We’re looking holistically at our carbon footprint,” Wright said. “When you add, on top of that, congestion on the roads and the driver shortages we have had, we started looking at [increasing] our footprint on rail.”
The UK’s relatively large market for online shopping and next-day deliveries has led to worsening congestion on its roads. The average driver in the UK lost 80 hours to traffic last year, compared with 51 hours in the US and 40 hours in Germany, according to analysis firm Inrix.
An exodus of European lorry drivers since Brexit also means that the UK has been particularly hard hit by a shortage of truckers. Despite the government investing millions in training British drivers, industry group Logistics UK estimated in December that the country was still short of 60,000 drivers.
On the environmental front, trains produce 76 per cent less carbon emissions per tonne of freight compared with road transport, according to Network Rail, the owner of Britain’s rail network.
Alex Irving, a logistics analyst at Bernstein, said rail’s “super-low emissions” were encouraging consumer-facing groups to consider it as an option.
Rail is typically slower but also cheaper than road, he added, noting that “all the talk about driver shortages [was] clearly less of an issue for rail”.
Ernst Schulze, the UK head of DP World, said he was hoping to increase the share of goods leaving the company’s Essex and Southampton ports by rail from 25 to as high as 40 per cent within a couple of years.
The group, which launched a weekly rail service between its UK ports late last year, this week also announced financial incentives for customers moving goods out of Southampton by train.
“International requirements [for companies to reduce their carbon footprint] are becoming horrendously important. Cargo owners [prefer rail] to trucks. I think the whole industry is starting to come around,” said Schulze.
UK haulier Maritime Transport said it was transporting up to 5,000 containers a week by rail, compared with about 400 four years ago.
“Road [transport] is getting more expensive. Driver wages will continue to increase,” said John Bailey, a managing director at the company. In partnership with GB Railfreight, one of the UK’s largest operators, it recently started shifting drinks for Coca-Cola Europacific Partners, an independent European bottler.
At the current rate, Bailey says, he can see the train service between London and Yorkshire, announced in October, transporting more than 18,000 containers a year, roughly equal to 2.5mn cans and bottles of drinks.
Business leaders have warned, however, that existing UK rail infrastructure might struggle to support a meaningful transition away from road freight, while recent strikes by rail workers have also held back progress.
“There’s still apprehension because of the reputation rail has had in years gone by,” said Phil Read, managing director at rail freight start-up Varamis. “Industrial action doesn’t do us any favours.”
Since its launch in January, Varamis’s new 100mph service has been carrying up to 2,000 parcels nightly between Glasgow and Birmingham on behalf of two small parcel handlers, Read added. But he said its train had capacity to carry as many as 20,000 parcels and the company was in talks with logistics group XPO, Amazon and DHL.
One executive at a leading supermarket said the UK rail system was insufficient to support its needs.
Unlike the UK where freight lines are shared with passenger lines, “European countries have separate freight [rail] lines”, the executive pointed out. “You have Victorian infrastructure. The rail lines can only get you to certain major hubs.”
“We can move stuff [across Europe] without issue,” agreed Nestlé’s Wright. UK rail was limited by the rail bridges that were originally designed for smaller trains. “They are beautiful and they are all under preservation orders.”
Nestlé has been co-developing a container with an adjustable roof that can be lowered to just above the height of its contents. “[UK rail] is predominantly passenger centric,” Wright said. But she added: “The network itself exists. There is an opportunity to say: how can we use some of that?”
