The “Modal Shift Program” is designed to increase the attractiveness of intermodal rail for customers using carefully designed financial incentives. The program has the potential to prevent an estimated 30,000 metric tons of carbon dioxide being emitted per year, more than three times the total emissions of DP World’s logistics hub at Southampton, where it will be trialed from September for an initial period of 12 months.
John Trenchard, UK commercial and 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 a gradual decline in the share of rail. Through the Modal Shift Program we aim to increase the rail share up toward 40% by the end of 2025 – removing an estimated 30,000 tons of carbon dioxide from our customers’ onward supply chains.
“DP World will mitigate the impacts of climate change by becoming a net zero logistics organization by 2050. The announcement will help customers on their own decarbonization journeys and supports the UK Government’s stated ambition to drive the modal shift from road freight to more environmentally sustainable alternatives like rail,” Trenchard added.
The Modal Shift program will charge 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.
DP World operates the UK’s most advanced logistics hubs: two deep water ports at Southampton and London Gateway with access to freight rail terminals, and a rapidly expanding logistics park on the doorstep of the capital.
DP World’s investment in rail at its Southampton and London Gateway locations eases traffic congestion, with 300,000 truck journeys taken off UK roads each year. Last year it launched a new weekly rail freight service connecting the two terminals, which takes up to 120 lorries a week off the roads, cutting carbon emissions by 80%.
These UK initiatives have contributed to DP World’s global carbon dioxide emissions being reduced by 5% in 2022, with a 20% reduction in the European region alone.