The ‘Modal Shift Programme’ is designed to increase the attractiveness of intermodal rail for DP World’s customers through the use of carefully designed financial incentives.

According to DP World, the programme has the potential to prevent an estimated 30,000t of carbon dioxide being emitted per year, more than three times the total emissions of the company’s logistics hub at Southampton, where it will be trialled from September for an initial period of 12 months.

“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,” said John Trenchard, UK commercial and supply chain director at DP World.

“However, over the past few years, there has been gradual decline in the share of rail. Through the Modal Shift Programme, we aim to increase the rail share up towards 40% by the end of 2025 – removing an estimated 30,000t of carbon dioxide from our customers’ onward supply chains.

“DP World will mitigate the impacts of climate change by becoming a net-zero logistics organisation by 2050. Today’s announcement will help customers on their own decarbonisation journeys and supports the UK government’s stated ambition to drive the modal shift from road freight to more environmentally sustainable alternatives like rail.”

The Modal Shift Programme 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.

DP World said that 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 the incentive aims to increase the likelihood of a modal shift to rail.

Birmingham and points north are outside the 140-mile threshold, so the main target is the London market. Regional centres such as Bristol, Cardiff and Exeter are within the threshold, but there are no suitable rail routes for intermodal trains.

The company continued: “DP World operates the UK’s most advanced logistics hubs – two deepwater ports at Southampton and London Gateway with access to freight rail terminals, and a rapidly expanding logistics park on the doorstep of the capital.

“Southampton enjoyed its greenest ever year in 2022 after delivering a 55% reduction in net carbon emissions from its fleet and installations after eliminating fossil diesel from its operations and transitioning to hydrotreated vegetable oil [HVO], a low-emissions alternative to diesel fuel. The £350M new fourth berth under construction at London Gateway will be the first all-electric berth in Britain when it opens next year.

“DP World’s investment in rail at Southampton and London Gateway 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,” concluded DP World.

The £10 fee and £70 incentive will apply from 1 September until 31 December 2023, after which the incentive will be variable – adjusted at quarterly intervals based on demand.