Multimodal 2023 panel discussion: Making a step change in UK freight by water

The UK is surrounded by water. It is criss-crossed by waterways, both natural and man-made. Moving freight by water today is dramatically lower in emissions terms than any other ‘volume’ freight mode. There are good examples already where coastal and inland waterways are used to move significant quantities of goods, such as Cemex’s movement of 300,000 tonnes of [aggregates] along the Severn, ABP’s ‘TimberLink’ service which transports 100,000 tonnes of forestry products along the west coast of Scotland and the movement of freight along the Thames by the likes of Cory and Bretts. But there is capacity to do much more.  

Doing more would deliver not just freight but environmental benefits from shifting goods from trucks and congested roads to the water. It would also make a ‘levelling up’ contribution, helping to support and grow investment and jobs in coastal and estuarine communities across the UK. All too often these are communities that experience significant socio-economic challenges, yet are places of opportunity, particularly in the context of the new green future of the UK. And for many businesses it can make strong business sense.  

More than a hundred years ago, the Manchester Ship Canal – still very much a vibrant, major freight handling waterway operated by Peel Ports – was advertising the benefits of collocating manufacturing along waterways and the same is very much true today. 

Conversations with operators, cargo owners and infrastructure providers reveal ambitions to significantly increase the volumes of freight moved by water.  

• The Canals and Rivers Trust has developed a bold strategy for revitalising the waterways of Lincolnshire and Yorkshire as freight routes.  
• Peel Ports is working with a major manufacturer for a waterborne ‘just in time’ components delivery service.  
• The Port of London Authority is working with others to develop the business case for light freight on the Thames into central London.  

• Northern port operators ABP, PD Ports, Peel Ports and the Port of Tyne, see the potential for ‘coastal shipping highways’ along the west and east coasts of Great Britain.  

But these ambitions are being held back.    

So what needs to change to realise these ambitions and make a step change in the movement of freight by water in the UK, with the accompanying sustainability and economic benefits? The same conversations with industry players, looking at what’s been effective so far as well as new thinking, suggests some very practical ways that governments and agencies can kick-start a renaissance in waterborne freight: 

1. Supporting infrastructure development  

1. Economics – A common factor in a number of the current success stories has been government co-investment in infrastructure. The Freight Facilities Grant scheme is one example for England and there has been positive support in Scotland. It’s very difficult to make the business case of inland shipping in particular work if there needs to be a short-term recovery of capital costs. A reinstatement of such a scheme in England would address this challenge. 

2. Planning – Land and property around waterways is often attractive to residential and non-freight uses. Such development directly reduces the space available for freight uses. It also has powerful indirect effects, eg land valuations and ‘neighbour’ issues. The ‘Protected Wharves’ scheme in London is a good initiative and options for such protections elsewhere need to be considered. The upcoming Future of Freight work on the planning system should incorporate measures that support coastal and inland waterway freight movement. 

2. Making the incremental difference to business case viability. Freight by water addresses important externalities – environmental and potential social – for the UK economy. It also faces an unlevel playing field in the UK against other freight modes where infrastructure is essentially free (roads) or where there is a well-developed, accessible subsidy framework (rail).  Modelling by specialist logistics economists MDS Transmodal suggests that if HGVs carrying landed cargo in the south of the UK destined for the north had to pay their fair ‘non user costs’ there could be a switch of 10-30% in HGV kilometres travelled as these loads switched to coastal shipping, with a £13 per load ‘public benefit’ prize from lower emissions and less pollution.  

Infrastructure development support is one aspect of levelling the playing field. The other is to introduce some measure of incremental ‘in use’ support, either in terms of opex or price support. To aid scheme affordability, the focus should be on measures that provide support for an initial period (say three years) during which routes and services should develop the customer confidence and scale economies to be standalone viable. The upcoming review of the Modal Shift Revenue Support scheme, which has never worked in the context of freight by water, provides an opportunity for such co-creation between industry and Government.  

3. Focus on viable opportunities. Freight by water won’t be the solution for everyone and not every waterway or location will be suitable, especially as industry dynamics like vessel size evolve. Superficial comparisons with other nations must be avoided. And, as ever, resources are finite. But there are real and genuine opportunities, and attributes such as our coast that are particular advantages for the UK. The right thing to do is recognise this and focus effort. 

4. Government ‘ownership’. Inland waterway usage for freight in particular is hindered by its ‘ownership’ within UK government. Inland waterways sit within the portfolio of DEFRA where, inevitably, the focus and resources are directed towards environmental matters. These are of course important, but the usage of these waterways as economic arteries is a distant second. A shared ownership of the freight usage area by the Department for Transport could bring more focus and expertise. 

Coastal and inland shipping has been the ‘Cinderella’ of the UK freight sector and a substantially untapped opportunity for the UK in terms of environmental, business and social benefits. Realising this potential requires focused input from governments. The ambition from industry is there. Let’s work together to make it happen. 

*www.logistics.org.uk/campaigns    

Published On: 06/07/2023 12:00:00

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