Latest insight.

Adam Parkinson, Founder of GoLink Advisory Group reflects on the state of the UK’s rail freight sector as we head into 2025.

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2024 brought some good news stories for increasing modal shift. Tesco increased its volumes and introduced its 10th rail service, Freightliner launched a new Tilbury-Trafford Park service, and DP World formally launched its modal shift scheme, offering financial incentives for customers to move intermodal boxes via rail instead of road - a scheme that has already achieved significant success.

These achievements are a testament to the dedication of the individuals involved and show what can be done with the right ambition.

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Last year, we also saw several long-standing flows come to an end. Notable among these were the Haverton bitumen, Scottish Ineos oil, South Wales steel, and the regular Ford Dagenham to Valencia service. The most high-profile exit, however, was Royal Mail - a rail freight customer for nearly 200 years - ceasing its rail operations entirely.

This is especially striking given that volumes in the courier, express, and parcel sector have had an annual growth rate of 7.5 per cent since 2016, underpinned by ever increasing online retail sales.

Royal Mail had previously withdrawn from rail in 2003, only for GBRailfreight to revive the services in 2004, however it had mainly been a DB Cargo account since then. This time round, however, the decision feels more final, with the Class 325 units already being sent for scrap.

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Looking ahead, there are tectonic shifts on the horizon. Many industries are experiencing technological disruption and pressure from external forces, and the rail freight sector is no exception.

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Track access charges for freight operating companies (FOCs) are set to increase by 20 per cent in nominal terms during Control Period 7, alongside rising energy and overhead costs. Meanwhile, advancements in HGV technology and evolving customer demands in the logistics sector are expected to exert significant pressure on the rail freight industry over the medium term.

Emerging electric and autonomous vehicle technologies could dramatically reduce the cost base for road hauliers within the next decade. Whether this transformation occurs within a decade or sooner remains to be seen – but its arrival is inevitable.

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In the intermodal sector, Maersk recently announced it will no longer use the Port of Felixstowe for larger vessels, opting instead to relocate part of its operations to DP World’s London Gateway from February 2025.

This transition presents a significant challenge for freight operating companies(FOCs) and Network Rail. The already constrainedNorth London Lines, where freight services must be pathed between an intensive and fragile metro-style passenger timetable, may struggle to provide additional rail capacity to support such change.

This could impede DP World’s ambitious goal of achieving a 40 per cent share of its on-rail volume by 2026.

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