Incentives to use rail rather than road for transporting freight are being offered by DP World.
The global logistics company who own both Southampton and London Gateway airports are launching the ‘Modal Shift Programme’ is designed to incentivise customers and freight companies to move imported goods from off the road and onto the rail network by making it more attractive.
They plan on doing this by charging a flat £10 fee on all import-laden containers. Customers whose container is moved to a railhead more than 140 miles from the terminal are reimbursed, and a £70 incentive is paid to those whose container is moved to a railhead within 140 miles of the terminal.
The market economics for using intermodal rail for distances of 140 miles or more from Southampton already make sense. However, for deliveries within the 140 mile zone the economic difference is less clear, and this incentive aims to increase the likelihood of a modal shift to rail.
John Trenchard, UK commercial & supply chain director at DP World, said: “DP World in the UK has been a market leader supporting our supply chain partners with access to a comprehensive network of rail options to connect our logistics hub to inland locations across the UK. However, over the last few years there has been gradual decline in the share of rail. Through the Modal Shift Programme we aim to increase the rail share up towards 40% by the end of 2025 – removing an estimated 30,000 tonnes of carbon dioxide from our customers’ onward supply chains.”
The driving factor is the company target to reduce carbon dioxide emissions of up to 30,000 metric tonnes.
Trialled for an initial 12 months, it is hoped it will prove a sustainable way for companies transporting more containers to the Central Midlands hubs by rail being emitted each year.
The company has recently launched a new weekly rail freight service which connects both London Gateway and Southampton alongside a new £350 million new fourth berth at London Gateway which it is hoped will provide better capacity for rail freight companies and increase access to key freight terminals across the network.
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