Logistics UK responds as £11.2m rail freight terminal gets lift off

Funding from the Scottish government was awarded through its Freight Facilities Grant, delivered to companies who want to transition to moving freight by rail or water rather than road.

The new freight terminal will be based near Inverness and perform as a critical link for moving Highland goods to the UK market. Full operation is slated for summer 2026.

This follows approval from Highland councillors for West Fraser to have its own rail yard alongside its Dalcross plant, nicknamed ‘the cloud factory’ due to the distinct white smoke that can be seen emitted from the plant.

According to the company and UK government, it belongs to a wider ambition to utilise rail freight as a sustainable means of transportation.

West Fraser European purchasing director, George Webb, welcomed the commencement, stating: “This facility will help accelerate the switch from road transport to rail, improving efficiency, removing some 20,000 HGV journeys off the A96 and A9 and eliminating approximately 9000 tonnes of CO2 emissions per year, in the first phase.”

This sentiment was echoed by Transport Minister Fiona Hyslop, who said, "This particular project could equate to removing the equivalent of up to 100 HGVs permanently from our roads per week, with the potential for even more should other companies use the facility."

Alexandra Herdman, Senior Policy Manager at Logistics UK agreed that rail freight plays a vital role in supporting both the UK economy and enabling it to meet its sustainable transport goals, and said: “This £3 milllion from the Scottish government for freight facilities is an important step towards moving more goods by rail and water in Scotland. However, the Scottish Government must also re-introduce the Mode Shift Revenue Support scheme (MSRS) that has been cut from successive budgets. 

“The next Scottish budget must include the £700,000 for MSRS. Cutting this grant sends the message that modal shift is not a priority for the Scottish Government and is also counterintuitive to the government’s own targets for rail freight growth and net zero.  

“Freight facilities grants offer long term modal shift incentives and Logistics UK has been calling on the UK government to reintroduce these in England.”