Ports and logistics giant DP World has today increased financial incentives for customers helping cut carbon from UK logistics by switching from road to rail-based freight via its Modal Shift Programme.
Introduced in September, the 12-month trial at DP World Southampton initially offered a bonus of £70 per container moved via rail to a railhead within 140 miles of the Southampton logistics hub, including sites in Bristol, Cardiff, London Gateway, and centres across the Midlands and Birmingham.
However, in the hope of further encouraging clients to opt for rail over road, DP World has today increased its incentive to £100 per container for the first quarter of 2024. The financial incentive for the second quarter will be announced by the end of February.
According to figures from the Office of Rail and Road, 17.5 million tonnes of freight were carried in the UK between July and September 2023, with trains travelling 8.11 million kilometres during the same period.
DP World moves more than 50 per cent of all the trade coming in and out of the UK – amounting to over one million containers a year.
Since the announcement of the Modal Shift Programme, rail services uptake at its Southampton hub has increased from 21 per cent between January and June to 27 per cent from September to December – with the Midlands rail network seeing a particular spike in activity.
Uptake has been further bolstered by the reintroduction of a daily rail service from Southampton to South Wales, along with the implementation of new final mile delivery services using electric vehicles.
DP World hopes today’s increased incentive payments will encourage more supply chain partners to explore, trial, and transition to rail freight as a lower carbon alternative for their UK supply chains. Early indications suggest the scheme has helped save up to 4,000 tonnes of CO2 emissions to date.
Moreover, the firm claims its Modal Shift Programme could ultimately prevent an estimated 30,000 metric tonnes of carbon dioxide being emitted per year – more than three times the total emissions of DP World’s logistics hub at Southampton.
“We are delighted with the Modal Shift Programme’s success so far,” said John Trenchard, UK commercial and supply chain director at DP World. “The increase in incentive will provide our customers with a welcome boost to their financial and sustainability ambitions and further support the UK Government’s ambitions to achieve a 75 per cent growth in freight carried by rail by 2050.
“This is particularly important at a time when the pressure to manage costs, maintain reliability and improve speed has never been greater for our customers.
“The programme is also a testament to our growing cooperation with the market, as we continue to seek to provide customers with lower carbon choices and encourage modal shift for supply chains using our UK logistics hubs. To put that in perspective, our investment in British rail alone via our two UK hubs is taking approximately 300,000 trucks off the road each year.”
The announcement comes after the government recently set its sights on increasing rail freight by at least 75 per cent by 2050, as part of efforts to create jobs, drive investment, and reduce the environmental impact of transporting goods around the country.
Announcing the new target, the Department for Transport said the goal was designed to encourage private sector investment in projects that could “grow and modernise” the rail freight industry.
