Port pays companies to use freight trains under net zero push

Importers are being paid £70 for every container they take off the roads

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Britain’s biggest port operator is paying customers not to transport goods by road in an effort to meet green targets. 
DP World is providing a £70 subsidy for every shipping container taken by rail, rather than road, from Southampton, the UK’s third-busiest port. Support applies for onward transport within 140 miles of the port.
The sweetener is being permanently adopted after a year-long trial, which helped lift the proportion of containers leaving by freight train from 21pc to more than 30pc. The increase is estimated to have led to 64,000 fewer truck journeys on Britain’s roads and cut carbon emissions by 17,000 tons.
DP World said it will extend the scheme with the aim of increasing rail usage to 40pc by 2026.The need for a cash incentive to wean importers off road haulage highlights the challenge facing Labour. Ministers have pledged to make growth in train freight a central plank of railway nationalisation, but DP World’s experience suggests it may need to offer subsidies to achieve this aim.
The Government faces a similarly steep challenge in convincing people to abandon their cars to meet emissions targets for 2050.
The Rail Delivery Group, which represents train operating companies, has forecast that rail travel will grow by an average of 1.6pc annually, equivalent to a 20pc increase in usage by 2035.
However, growth of 40pc is required over that period under the net zero pathway required by the state-appointed Committee on Climate Change.
John Trenchard, the head of commercial and supply chain at DP World, said the rail subsidy scheme had given customers the “opportunity to explore the benefits” of sending containers by rail.
Craig Barnes, a director at Supreme Freight Services, a DP World customer, said his company had not previously considered rail as an option but was now offering it to customers alongside road transport.
Four new rail freight services have been launched to cater to customers, linking the port with railheads in Birmingham, Cardiff, Doncaster and at the East Midlands Gateway logistics park near Derby.DP World also introduced a second service between Southampton and its London gateway port in Essex, the UK’s second-busiest container hub after Felixstowe. No incentive is being provided for shipments beyond 140 miles since they already have a much bigger takeup of rail freight.
DP World, which handles 10pc of world trade, said the incentive will be adjusted every six months. The subsidy is paid out automatically to the import agent acting for the end client. 
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