Saturday 10th Dec 2016 - Logistics Manager

On the right track

Freight volumes are rising, but as the roads near capacity more and more companies rae turning to rail.  Lucy Tesseras talks to industry insiders about the increased interest in rail-connected property and the environmental benefits it can provide.

Rail freight is on the rise.  Over the past decade it has increased in the UK by some 60 per cent and now has a market share of 11.5 per cent of all land hauled freight in Britain.

Graham Meiklejohn of DB Schenker reckons: “Interest has grown as customers seek to achieve cost reductions by transferring goods from road to rail, while also benefiting from environmental advantages – freight trains emit five times less carbon dioxide per tonne km than road haulage.”

The Rail Freight Group and the Rail Freight Operators’ Association are keen to promote these advantages and last month launched a manifesto for rail freight growth. The papers, which are aimed at politicians, explain how with the right political support, rail freight can improve UK competitiveness and reduce carbon emissions.

Graham Smith, chairman of the Rail Freight Operators’ Association and planning director of DB Schenker, explains: “The issues of climate change and sustainable economic recovery are occupying centre stage in the run up to the general election. Policies are being formed to tackle these key areas and transport policy is critical to both of these issues.

“The papers published by the RFOA and the RFG provide a succinct summary of how rail freight can help the economy and the environment, outlining the political commitments needed to ensure we achieve the anticipated growth in rail freight.”

BNP Paribas’s Chris Selway says the current minister for transport, Lord Adonis, is doing a lot to boost the profile of rail freight. “The minister is very pro rail and has been making a lot of positive noise about rail infrastructure. But a change in government at the next election could change everything. It would be a real shame if he was lost to the industry. A move towards rail has to happen because we can no longer cope with the burgeoning number of vehicles on the roads.”

BNP Paribas will shortly be marketing some 18 sites with rail potential and is working with DB Schenker on an autumn campaign.

Don Morgan, planning director of Gazeley, says securing rail-connected logistics sites is undoubtedly a key development area for Gazeley and part of its wider strategy.

He attributes the rise in rail freight to long distance haulage within the UK, movements to and from continental Europe and “particularly to movements from deep sea container ports, such as Felixstowe and Southampton, which have seen substantial growth of container imports from South East Asia”.

Container traffic to UK ports has doubled in the past 15 years and experts expect it to grow between 45 and 60 per cent by 2015.

Gazeley is currently proposing the development of Magna Park Peterborough; a rail-based logistics facility on a site to the east of the city.

Morgan says: “Some rail-connected distribution centres are starting to emerge across the UK, but there is no multi-modal terminal in the east of England. Peterborough, located on the designated freight line to Felixstowe which connects with both the east coast and west coast main lines, is an ideal strategic location for such a rail-connected distribution centre.”

ProLogis also sees the ability to deliver rail schemes as key to its strategy. “We are really keen on rail freight. It fits in completely with our environmental policy,” says Robin Woodbridge, first vice president of development.

“I think we’re still very much at the start of the move towards rail, but we believe there will be more and more customers wanting to use it in the future. We had one false dawn some time ago and traditionally people have been quite sceptical, with one of the biggest worries being delays, but freight trains run to a timetable so they are as good, if not better, than moving goods by road.”

ProLogis now has planning consent for a 2.1 million sq ft road and rail development at Howbury. The site is located within London’s Thames Gateway area at Junction 1A of the M25 motorway. The developer is in a similar situation with Eurohub Main at Corby, which will provide 3.5 million sq ft at a 217-acre rail-served site.

Woodbridge says ProLogis is now in a position to start building, but the infrastructure costs for rail-linked developments are higher so it needs a customer to initiate things before it begins.

It also has planning consent for DIRFT, which as it already has rail infrastructure in place is likely to move forward more quickly. The two million sq ft space will offer individually designed rail-connected buildings from 274,489 sq ft to 824,550 sq ft and is directly served by the west coast mainline. It is immediately adjacent to Junction 18 of the M1 motorway and within four miles of the M1-M6-A14 interchange.

“Of all the sites we have we are getting more interest in DIRFT than any other,” says Woodbridge.

He adds: “If we can get customers to switch some of their supply chain to rail, even just 25 per cent, it will give them very good environmental and cost savings. So it’s a win win situation.”