Rail and road: finding the right balance in a changing supply chain

In this issue of Porttalk, we speak with Chris Lawrenson, CEO of Freightliner Ltd, about the evolving relationship between rail and road within the UK supply chain.

From an unexpected start in logistics in Felixstowe to leading one of the UK’s largest intermodal operators, Chris shares his perspective on how the industry has changed, the growing pressures facing road transport, and why rail is increasingly being positioned as part of the solution rather than an alternative.

As container networks become more complex and sustainability moves higher up the agenda, the ability to balance cost, service, and carbon is becoming a defining challenge for operators and customers alike.

Starting out

You’ve built your career within logistics and intermodal transport. How did you first get started in the sector, and did you always see yourself working in rail?

Getting into logistics was largely by chance. My father left the army after 25 years of service, and with my mother’s family based in Felixstowe, we relocated there in 1986 after spending the previous five years in Germany.

Within 24 hours of arriving, I went to the job centre. At 19, with no clear plan, I picked up a card for a junior import clerk role at a small freight forwarder handling US military traffic, had an interview, and started two days later.

That first role gave me a grounding in the industry and led to positions with Johnson Stevens Agencies and then Maersk in 1988, where I spent 29 years in a variety of roles. A key turning point came in 1995 when Maersk acquired Pentalver Transport, and I moved into an operational role in Southampton. This was my first real exposure to asset-based logistics and a more hands-on operational environment.

Rail came later. I became more closely involved following Genesee & Wyoming’s (G&W) 2017 acquisition of Pentalver, which had acquired Freightliner in 2015.

The rail/road balance today

Rail and road continue to operate side by side in the UK supply chain. From your perspective, how would you describe the current balance between the two modes?

Rail freight truly performs at its best when supported by smooth, efficient road operations. In reality, our supply chain functions most effectively when rail and road work to their respective strengths rather than competing against each other.

The agility of road transport cannot be ignored, and there are, of course, parts of the country where rail will not work. Our ability, as Freightliner, to offer a tailored solution, whether by road or rail, is important for our customers.

We’re seeing a rise in model shift for several reasons. The first, of course, is sustainability. Customers are increasingly focused on reducing their carbon footprint, and rail is the best way to achieve this by removing road miles from the supply chain. Secondly, the industry still faces the challenge of the rising average age of truck drivers. Only the slower economy is masking the fact that the industry will face a driver shortage. The third reason is to attract younger people, especially young women, to road transport. It is no longer seen as an appealing role due to issues such as road congestion, queuing at ports and at customers’ premises, and poor road facilities. As an industry, we must do more to change this perception and make these roles attractive to future generations.

That’s why rail should be seen as part of the solution. Managing long-distance work allows the fleet to concentrate on shorter trips to and from terminals, meaning drivers are home every night and the job becomes a much more appealing career option.

Complement or competition?

Is rail still viewed as an alternative to road, or is it now firmly a complementary part of an integrated inland logistics network?

Rail needs an efficient, productive road sector to stay competitive, and road, in turn, benefits when rail takes on trunk haulage, which is why the two modes work best when they support each other rather than being seen as an either-or choice.

Without rail, port operators would struggle to handle the number of vehicles needed for servicing. The industry does not have enough long-haul drivers to shift volume by road, and rail cannot offer the same level of flexibility or agility as road transport due to its network constraints. Both are vital for keeping the country moving. There is no doubt that long-distance road journeys will continue to decline, especially as rail emits up to 76% fewer carbon emissions than diesel road travel. Road will remain important for delivering efficient first and final miles of container journeys to customers.

Customer decision factors

When customers weigh up rail against road, what are the main operational and commercial factors shaping their choices today?

Currently, I believe this is a cost and time.

For rail to work efficiently, it should operate from day 1 to day 3 to ensure you reduce supply chain risk.

As an industry, we have a lot of work to do to change this from the last-minute bookings that happen today. Effective planning is essential to get volume into the right area of the country.

Cost is a factor, and the myth that rail is cheaper than road is false. We have seen rail costs increase every year. From Track Access Charges to Port fees, and for road Fuel Duty Charges remain frozen. This makes it more difficult for rail operators.

The Government clearly states its aim to increase rail freight transport, which is why it has established ambitious rail freight growth targets alongside broader sustainability commitments. However, to achieve these goals, we need the right incentives to encourage customers to choose rail.

First-mile/final-mile reality

With Freightliner operating both rail and road services, how important is integrated planning between the two modes in delivering reliability and resilience for customers?

For our customers, working with us should feel just as simple as working with any road haulier. You make a booking from port to destination, and we handle everything behind the scenes to ensure the entire journey is reliable and smooth.

We have recently launched a new online booking platform, MY HUB, that makes this process even easier for our customers. Rail freight should be simple, and we’re working to make it so through integrated planning. Our advantage is that we have complete control over every step of the journey: our trains, our terminals, and our trucks.

Commercial vs Sustainability drivers

Rail’s environmental credentials are well established. In practice, is modal shift being driven more by sustainability targets or by commercial and operational considerations?

Certainly, as we get closer to Science-Based Targets and organisations are now much more aware of their carbon footprints, we see customers prioritising sustainability higher on the procurement agenda rather than being driven by other factors, such as price.

Some large retailers now insist on carbon reduction within their supply chains, and this can only benefit rail. While we offer HVO fuel for our diesel locomotives, we also own and operate the largest fleet of electric locomotives in the market, making us an even more sustainable option for our customers.

Looking ahead

Do you see the rail-road dynamic changing significantly over the next five years, and what will determine that shift?

Several factors will influence how we operate moving forward.

Road drivers – the average age continues to rise, with the ONS now reporting it at between 51 and 53 years old. Half of these drivers are between 50 and 65 years old. The industry must respond by making driving more appealing to younger people.

Cost – attracting a younger generation will drive costs up to compete with other transport industries and industrial workforces. This cannot simply be absorbed by the operator, which is why a multimodal approach is essential, as it makes the whole system more efficient and helps minimise what ultimately must be passed on to the consumer.

Conditions – Our road network is currently under significant strain, and years of limited investment are becoming evident through increased congestion and more frequent delays. Driver facilities could be improved, especially as basic service costs continue to increase. These pressures are shifting how organisations view their logistics and supply chains, with a greater emphasis on first- and last-mile movements and a reduced willingness to undertake work that keeps drivers away from home for extended periods. Security concerns, including theft from vehicles, still present a challenge. Overall, this highlights the importance of evaluating the efficiency of the entire system and finding the right balance between road and rail, because when both modes work together, the supply chain becomes simpler, more reliable, and better for customers and drivers alike.

Emissions and sustainability targets will continue to grow in importance, with customers increasingly eager to understand their carbon footprint and find credible methods to reduce carbon in their supply chains. This involves exploring how road and rail can collaborate more effectively, utilising each mode where it provides the greatest carbon savings and creating a cleaner, more efficient end-to-end operation.

All these factors will influence how the supply chain evolves in the coming years and will shape how road and rail collaborate to meet future demand.

Freightliner Ltd