Full speed ahead: How rail freight can drive growth, investment and net-zero
Rail freight may not be the most glamorous aspect of transport infrastructure and logistics but it does offer a solution – or at least a partial one – to several of the most pressing strategic challenges that are integral to building a prosperous future for Britain
It attracts significant investment, supports economic growth, helps reduce road congestion, and provides an efficient way to transport goods. Crucially, it also strengthens regional domestic supply chains and plays a vital role in advancing the UK’s net-zero ambitions.
With both the Prime Minister and the Chancellor of the Exchequer committed to a growth agenda, rail freight presents an ideal opportunity for the public and private sectors to collaborate. It can be at the intersection of real estate, logistics, and transport, offering a way to deliver on multiple objectives simultaneously.
Several big names are already on board with their rail freight journey. Tesco-branded containers can be seen regularly on the back of freight trains with the company launching its tenth service last year, with the company moving some 300 million cases of food, drink and other consumer goods by rail every year.
For the first time in the UK, Amazon, which purchased a plot at SEGRO Logistics Park Northampton in 2023, has also committed to large scale rail deliveries in the UK. As well as transferring products between delivery and fulfilment centres, products are also transported to ferry ports, giving small and medium-sized UK businesses easier access to European markets. The company expects to transport more than 20 million products sold on Amazon by rail in 2025.
Having integrated more Strategic Rail Freight Interchanges into warehouse developments than anyone else in the UK, SEGRO is a strong advocate for rail freight. Although not an option for every development, we have witnessed first-hand how much our customers benefit from the efficiencies and sustainability of consolidated logistics hubs.
A prime example is SEGRO Logistics Park Northampton, where we are nearing the completion of a 35-acre SFRI within a 450-acre development, strategically located next to Junction 15 of the M1.
Customers can transport goods to and from Northampton Gateway via multiple modes, enhancing the sustainability of their operations. With the terminal operating on an open-access model, companies from the wider area also benefit, opening up rail freight as a more viable option for many other businesses.
Similarly, our SFRI at SEGRO Logistics Park East Midlands Gateway continues to thrive. Just five years after the first freight train pulled out, the terminal’s footprint has doubled, a reflection of its growing popularity with occupiers as well as other companies from Derby, Nottingham, Leicester, and beyond. The inland facility’s direct links to key UK ports and its proximity to East Midlands Airport further highlights the advantages of rail freight as a key component of a resilient supply chain.
Our next major rail freight project at Radlett in Hertfordshire will take this momentum even further. As the only rail freight interchange serving the London area, it will play a critical role in supporting the capital’s logistics needs. There are currently only 20 strategic rail freight interchanges across the UK, and we are proud to have integrated three of them into our developments.
Rail freight contributes £2.45 billion to the UK economy annually, with 90% of these benefits felt outside London and the South East. In areas with a high density of logistics activity – including rail freight – GDP increases by an average of 1.4%, providing a much-needed boost to regional economies.
From a sustainability perspective, rail freight generates 76% less pollution than road haulage, making it an important tool in the drive towards net zero. Electrification is already proving a viable alternative to diesel, and some operators are experimenting with Hydrotreated Vegetable Oil as a transitional fuel. However, there are still barriers to the longer-distance journeys that freight trains already handle with ease.
To maximise its potential, the rail freight sector requires further investment and government support. Capacity enhancements to the West Coast Mainline and TransPennine routes would allow rail freight to grow alongside passenger services, and at the very least current capacity needs to be protected and guaranteed. This is particularly important following the decision not to proceed with HS2 north of Birmingham, which has created uncertainty around future infrastructure capacity.
At the same time, financing the electrification of 60 miles of missing track would enable the decarbonisation of two million train journeys each year.
Looking ahead, nobody is suggesting that rail freight should jump to the top of an already long and challenging list of priorities, but it should be recognised not just as a transport solution, but as a key enabler of the UK’s growth strategy.
By aligning public policy with private sector investment, we can unlock the full potential of rail freight to drive economic recovery, improve regional productivity, and make meaningful progress towards our net-zero targets.
With the right infrastructure and support, rail freight can deliver on all of these fronts, positioning the UK as a leader in sustainable, resilient logistics for decades to come.