Rail reform: what it means for rail freight

Rail freight makes a significant contribution to the UK economy and offers substantial environmental benefits, with modal shift reducing carbon emissions. The current rail reform agenda presents an opportunity to evolve existing industry structures and incentives to support rail freight growth. So how is the new legislative framework setting out to address these issues?

The Railways Bill (“Bill”) gives rail freight a more prominent place in legislation. It does so in two main ways: a dedicated freight growth target and a general duty to promote rail freight. The practical impact will, however, depend on how these are applied in day-to-day decisions by Great British Railways (“GBR”), the new public body that will run the railway, particularly on matters such as access to the network, charging and performance.

What does the Bill say?

The Bill’s main freight-related provisions fall under four headings: a standalone freight target, a general duty to promote freight, network planning and access, and charging incentives. Each is summarised below.

Standalone freight target 

Section 17 requires the Secretary of State to set and publish a target to increase the use of the railway network in Great Britain for carrying goods. The target must be kept under review and may be revised or replaced. When carrying out its legal functions, GBR must “have regard to” the target, meaning it must actively take the target into account. GBR must also have regard to any Scottish Ministers’ strategy or policy on rail freight in Scotland. 

On 8 September 2026, the Government published a rail freight growth target of 40% by 2040, supporting its wider ambition to increase rail freight volumes by at least 75% by 2050. Further information on this development is available in our article here.

Promotion of rail freight as a general duty

Section 18 goes further. It requires Ministers, GBR and the Office of Rail and Road (“ORR”) to carry out their relevant functions in the way best calculated to promote the use of the railway network in Great Britain for carrying goods. However, this duty sits alongside other duties covering passenger interests, service performance, business planning, the public interest and the efficient use of public funds, and the decision-maker may weigh those considerations as it sees fit.

Network planning and access

Section 60 requires GBR to publish an infrastructure capacity plan setting out how, in its view, best use can be made of GBR infrastructure. In preparing, revising or replacing the plan, GBR must have regard to the need to accommodate freight services alongside passenger services and infrastructure maintenance and improvement. This embeds freight into the strategic capacity-planning process for the network.

Section 63 applies when GBR decides whether to allow services run by other operators (such as freight operators) onto the network, and when it prepares or revises the working timetable. At these points, GBR must retain sufficient capacity for its own existing and expected future passenger services and for work needed to maintain and improve its infrastructure.

Charging incentives

Section 64 allows GBR’s charging scheme to offer lower access charges for use of the network where GBR considers this appropriate, including to encourage new passenger or freight services. This gives an express legal basis for using discounts to help get new freight services started.

Incentives of this kind have already played a role in practice, with Network Rail’s track access discount scheme supporting new rail freight flows in recent years.

The Access and Use Policy

On 9 September 2026, Network Rail published a consultation draft of the ‘Great British Railways Access and Use Policy’ (“AUP”). The draft seeks to turn the Bill’s high-level framework on access and capacity into the practical procedures and criteria GBR will apply. As a consultation document, it remains subject to change.

Protecting existing freight traffic

The draft AUP includes a presumption that established freight traffic should continue to have access to rail. Before removing or materially reducing capacity for existing freight, GBR would be required to work with the freight operator and customer and take all reasonable steps to keep the traffic running. Those steps include considering:

• alternative routes;
• flexibility in timings;
• proportionate changes to other services;
• manageable performance impacts; and
• deliverable changes to rolling stock, infrastructure or network capability.

Any departure from the presumption would need to be justified, with GBR explaining the alternatives and mitigations it considered.

This presumption of continuity responds to concerns raised by the sector that freight customers need confidence that established traffic will not be displaced as reform is implemented and GBR becomes operational.

Capacity planning 

The new framework offers an opportunity to build rail freight growth into GBR’s strategic planning from an early stage. When preparing the Capacity Plan (the infrastructure capacity plan required by section 60 of the Bill), GBR can earmark capacity as freight capacity, either for international freight services or for other freight services. In this way, the freight growth target can feed directly into long-term planning for how the network is used. GBR must then take the Capacity Plan into account when deciding whether to grant a “capacity commitment” (an entitlement to defined network capacity) to its own services or to any third-party operator.

The draft AUP also makes the published freight growth plans an input into GBR’s investment programmes and projects. GBR is to consider whether additional “critical railway outputs” (key infrastructure deliverables) are needed to reflect those plans. If the outputs do not provide all the capacity the plans identify as necessary, GBR will be required to identify and explain the shortfall.

Contractual framework

The AUP consultation includes several model form access contracts, including a model track access contract for freight services. The permission to use the network under the freight model contract may take the form of a capacity commitment or an “uncommitted freight service” which allows freight demand arising at short notice to be accommodated.

The standard duration for new or renewed groups of capacity commitments is seven years, with longer terms available where additional assurance is reasonably necessary to support investment or material benefits. 

Charges, Performance and Reporting

The draft AUP also contains provisions on charging, performance and reporting. GBR could discount charges to promote new freight services and when considering whether to phase in a significant increase in core charges, GBR would place high importance on keeping existing freight flows running and on government freight targets.

The performance scheme would include objectives aimed at outcomes for freight customers. GBR would also publish and maintain a “cumulative financial impact model” showing how its decisions on capacity, charging and performance combine to affect freight operators.

What next?

The Bill and the draft AUP include a range of provisions aimed at the needs of the rail freight sector. Stakeholders have, however, highlighted several issues that remain open:

• The role of the regulator: the Bill would give ORR a more streamlined role, and some in the freight sector are concerned that this may erode protections for freight. In particular, there is a high bar before an appeal can be considered by ORR, with appeals to be decided by reference to judicial review principles;
• Secretary of State powers: the Bill would give the Secretary of State powers to make regulations affecting existing access arrangements and infrastructure, facilities and services outside GBR’s control. Industry stakeholders have identified these powers as a source of uncertainty for freight operators and investors, including in relation to existing access rights and privately owned freight terminals; and 
• Performance regime: the Bill would prevent GBR from paying penalties or compensation for disruption outside its control, and industry stakeholders have questioned how far that exclusion extends. Many freight operators have agreed contracts with their customers on the basis of the current track access performance regime, and delay causes them real costs, such as overtime payments to staff and potential compensation payable to customers. The draft AUP seeks to limit the exclusion to exceptional circumstances with the detailed position to be set out later in the Performance Scheme Statement.

With the Bill progressing and the AUP consultation under way, the detail of how freight will fare under the new framework is still taking shape. We will continue to track developments and provide updates on the key issues affecting the rail freight sector.

This article was written by Arvin Nitchingham and Lydia Cullimore. If you have any queries about this article, or rail reform more broadly, please contact a member of the Burges Salmon rail team.