Navigating the tracks: Rail freight in 2023 and beyond

By Ellis Shelton, Policy Advisor at Logistics UK 

This article will provide an overview of the state of the rail freight market in 2023, the key trends that shaped the transport mode over the past 12 months, the challenges faced, and then look ahead to what is in store for 2024. 

THE CURRENT STATE OF RAIL FREIGHT IN 2023  

In its report, Freight rail usage and performance, the Office of Rail and Road (ORR) identified that total freight moved was 3.92 billion net tonne kilometres between 1 April and 30 June 2023 – down by 1% compared with the same quarter the previous year.   

While most commodity groups saw a fall in freight volumes moved – this was expected within the wider UK trend of depressed economic activity – rail use in intermodal maritime and construction operations increased by 7% and 13% respectively. As reported by ORR, the stabilisation of global container shipping may have influenced this trend, and ongoing freight deliveries to infrastructure construction sites via rail, particularly to HS2 construction sites, influenced this commodity growth.   

KEY TRENDS THAT SHAPED RAIL FREIGHT IN 2023  

Sustainability initiatives and the push towards greener rail transportation was a key driver of activity in 2023, as was the ongoing adoption of digital technologies and automation in rail operations to improve efficiencies.    

Over the past 12 months we saw this in action, with many operators undertaking innovative projects. For example, in September, GB Railfreight launched a new £5.75 million rail freight hub in Peterborough. The size of six Olympic swimming pools, it is powered fully by electricity, with the aim of delivering clean, safe and secure freight across the region. And in July, Chiltern Railways began using hydrotreated vegetable oil (HVO) to power some of its train fleet – a UK first – with use of HVO capable of reducing greenhouse gas emissions by up to 90% compared to diesel. With the government setting a phasing-out date for diesel-only trains by 2040, we expect to see more innovation in this area, with other fuels, such as hydrogen, also being explored and deployed.

CHALLENGES FACED IN RAIL FREIGHT IN 2023  

In addition to global economic factors influencing rail freight operations, we saw rail strikes here in the UK cause disruption to rail freight in both 2022 and 2023. The strikes caused a reduction in freight volumes moved and in service reliability.   

While employees working within the rail freight sector have not been involved directly with the recent industrial relations disputes, strikes among Network Rail signallers have reduced the operating hours of the railway, leading to reduced capacity on the lines for rail movements. This impacts rail freight operations by reducing availability for freight movements, and for services still running, reducing reliability.   

The UK government introduced the Strikes (Minimum Service Levels) Act (the Act), which became law in July 2023, amending the Trade Union and Labour Relations (Consolidation) Act 1992. However, although the freight sector specifically is excluded from the Act, it is heavily affected by the legislation; not least because it has little recourse to alternative modes of transportation when strikes impact the wider rail network. When strikes span multiple days, the impact on freight can be hard to mitigate, which can have a longer-term impact on consumer confidence in the sector. There must be clarity about the access that freight services can expect to have to the network, Government and the freight industry must collaborate on determining what routes should be prioritised.  

The UK’s rail network continues to require significant modernisation and in 2023 we did not see the level of investment needed in infrastructure. At Logistics UK, we and our members are particularly frustrated by the government’s decision to scrap the HS2 extension between Birmingham and Manchester. HS2 was a vital plan to unlock economic growth across the UK, and the additional capacity across the rail network it would have released was critical to expanding rail freight opportunities and enabling a shift from road to rail to cut carbon emissions.

LOOKING AHEAD TO 2024  

As we welcome in the new year, there is much to be optimistic about. Emerging technologies will play a pivotal role in enabling rail to transition to a net zero transport mode, all while boosting service availability and reliability; we are already seeing huge innovation in this space and are looking forward to seeing what is in store for 2024.

The government is set to publish its long-term rail freight growth target in the new year, and we will be holding government to account to ensure its plans support sustainable growth and enable modal shift. We need to see further government investment in the rail network to overcome the infrastructure limitations our members face; at Logistics UK, we will continue to press the urgency and importance of this.   

In 2023 the rail freight landscape evolved significantly, with businesses reacting effectively to changing global and local trends and embracing new technologies and challenges. Significant progress was made towards decarbonisation, and over the next 12 months, rail will play a pivotal role in the UK’s journey to become a net zero economy.   

In 2024 Logistics UK will continue to work with industry, government and its members to represent the needs of businesses working in logistics operations, and ensure opportunities are unlocked.   

Published On: 21/12/2023 14:30:00

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