New report highlights funding scheme changes to improve pace of modal shift
11th July 2022
The ‘Mode Shift Revenue Support (MSRS) – Light Freight Analysis Report’ published today by the Thames Estuary Growth Board and Port of London Authority (PLA), highlights changes to the government grant scheme that can unlock the potential for freight movements to switch from road to water.
Four simple changes can make the scheme more effective, according to the report by consultants, WSP. They recommend adjusting the scheme: taking account of the additional barriers faced by waterborne operators; encouraging innovation, particularly in light freight; developing pilot studies to test alternative modes for specific cargo types; and allowing grant funding for capital expenditure in setting-up new operations, rather than just operating costs.
Launched at the Thames Estuary Growth Board’s second light freight roundtable, the analysis answers some of the sector’s questions about funding criteria. With a review of the scheme due in 2024, the report sets out the barriers and solutions, which could help unlock better use of the Thames to move freight, as well as other waterways across the country. Handling just three per cent of the 700 million parcels delivered in London annually could switch the economics to make river freight competitive with traditional road freight.
While the Government’s Mode Shift Revenue Support (MSRS) scheme aims to remove short term financial barriers preventing companies moving away from road transportation and helping cut CO2 emissions, the WSP analysis, outlines several ways in which the current funding criteria inadvertently disadvantage light freight, resulting in extremely low numbers of successful applications.
Perry Glading, Deputy Chair of the Thames Estuary Growth Board, said: “We hope this new research will help get the dialogue on what is possible moving at a faster pace, driving a real shift from road to water. We all recognise the potential environmental and social benefits, as well as the greater reliability the river offers for deliveries. Businesses and stakeholders at our first light freight event highlighted that they were unable to access MSRS funding that could help us get this service up and running at scale quickly and supporting the country’s net zero ambitions.”
The ‘MSRS – Light Freight Analysis Report’ follows on from the ‘Light Freight on the River Thames study’ published in 2022 which objectively assessed the potential for increasing river freight movements in the near term. The earlier study, commissioned by partners at the Thames Estuary Growth Board and PLA, defines what a commercially viable river freight solution might look like, alongside a well costed business case.
Making better use of the river could significantly contribute to net zero ambitions. It also improves air quality. The level of NO2 and CO2 emissions reduced through river transport depends on the speed at which low and zero carbon vessels can be brought to market. A NHS/CEVA/Livetts trial moving hospital supplies via the Thames demonstrated immediate emission reductions through the use of existing alternative fuels such as HVO (biofuel).
Every 1,000-ton barge of goods transported along the river removes the need for roughly 100 trips made by lorry, cutting congestion. There are clear benefits to shifting light freight from road to river including slashing non-exhaust PMx emissions (generated through breakdown of brakes, clutches, tyres and road surfaces) which are a significant contributor to poor air quality, and rain water flows from roads in central London and across UK cities.
The analysis within the MSRS report considers both light and heavy freight. It highlights a number or barriers as well as enablers, including focussing on net zero (such as environmental reporting), technology and innovation, and provides a succinct evidence base that informs the case for reforming the MSRS scheme. Both studies add to a growing body of evidence and guidance produce by partners supporting movement of freight from roads on to rivers and inland waterways.
Informed by stakeholder experience and feedback, the analysis examines the historic awards of MSRS grants and reviews the scale of the awards to the river freight sector. It assesses application requirements and the cost-benefit equation for river freight routes for potential grant applications in order to gauge the suitability of MSRS for these routes – both new and existing split across light and heavy freight and the different considerations of each.
The report recommends:
- Changing the assessment criteria for river freight funding applications to take account of the additional barriers faced by waterborne operators.
- Encouraging innovation, particularly for light freight, through either adapting criteria or providing alternative funding avenues.
- Development of a pilot study to support light freight operations for specific movements to test alternative mode shift support mechanisms or initiatives.
- Allowing grant funding for the purposes of capital expenditure, rather than purely for operating costs, particularly to unlock innovative light freight solutions.
Robin Mortimer, CEO, PLA
“The Thames is already the busiest inland waterway in the UK. Interest in using the river to move light freight has never been stronger, with a number of trials completed and in the planning this year alone. This Mode Shift report identifies how the funding scheme can better serve the light freight market. With the adjustments proposed, the MSRS can become critical in supporting light freight on the river Thames reaching its potential.”
Sam Boyd Williams, Technical Director at WSP
“The findings from our report show the many ways in which the MSRS could be revised to support innovative step changes in freight and logistics on the River Thames. This will support the delivery of the environmental, social and economic benefits river freight can contribute to our estuary cities, and support wider net zero ambitions through the decarbonisation of transport and improved air quality.”
The report was published at the second Thames Estuary Growth Board round table discussion event, held in partnership with the PLA, Cross River Partnership, and hosted by Logistics UK where representatives from across the light freight economy discussed how to make better use of the river.
To find out more about the ‘MSRS Light Freight Analysis Report’, please visit the Thames Estuary website thamesestuary.org.uk/light-freight
Moving freight onto the river is a key part of the Thames Estuary Growth Board’s ‘Green Blue Workplan’, which describes practical steps to realising the huge potential of the Thames Estuary, the UK’s number one government-backed green growth opportunity. This is coherent with the PLA’s Thames Vision 2050 Framework outlines its ambitions to ensure that the Thames contributes to the climate emergency response and net zero.