A DfT overview of Mode Shift Freight Grants and exploring the market opportunities for Coastal Shipping and Inland Waterways

Transcription

1 A DfT overview of Mode Shift Freight Grants and exploring the market opportunities for Coastal Shipping and Inland Waterways Official 1

2 Freight Grants The Department operates two freight revenue support schemes to encourage modal shift from road to rail and water, where the cost is higher than road and there are environmental benefits to be gained: Mode Shift Revenue Support (MSRS) provides support for rail and. Waterborne Freight Grant (WFG) for coastal and short sea shipping, where this is more expensive than road. These are expected to help remove up to 900,000 lorry journeys in 2018/19. DfT does not offer capital grants for freight facilities. The Freight Facilities Grant scheme closed in England in 2011 but is still available in Scotland and Wales. 2

3 Freight Grants Mode Shift Revenue Support MSRS operates in two parts: MSRS (Intermodal), which has predetermined maximum grant rates for journey s between intermodal zones, one set for Port traffic and another for Domestic, and maximum benefit rates. MSRS (Bulk and Waterways), which has no predetermined grant rates. Applicants provide evidence of the rail/water and road costs and the details of the road journey being removed. Performance is reviewed three times a year, prior to each bid round. Contracted volumes can be reduced. The vast majority of grants are for intermodal rail traffic from ports. There are currently no inland waterway grants 3 inland waterways

4 Waterborne Freight Grant The primary aim of the scheme is to provide time limited support for the inception of new coastal and short sea shipping services. In exceptional circumstances, it can be used to support existing services. Grants are available for a maximum of three years, on condition that, after a period of grant aid (maximum 3 years), the service will be economically viable without grant support. There have been very few WFGs since the scheme began in 2004, and currently no WFGs. 4

5 Research - Options for Changes to Revenue Support Freight Grant Schemes. Recent research looked at the possibility of an MSRS (Intermodal) style scheme for coastal shipping. It developed a generic cost model for unitload coastal shipping services any unitload shipping service that calls at two or more GB ports allowing units to be transported between them and where the two ports are not in the same MSRS zone. The cost modelling showed it can be very cost effective against both road and rail for the transport of feeder containers over longer distances because the shipping costs are relatively low compared to the fixed port and inland distribution costs. It concluded that many of the Maritime State aid requirements are fully in line with the objectives of a potential MSRS Coastal Shipping scheme. But applicants would need to be able to demonstrate that services that are funded would be viable after 3 years (an EU condition for shipping support), which is an added obligation as compared with current applications for MSRS funding. 5

6 What next? Research will feed into consideration of any grant schemes beyond March 2020, when the current schemes end. Existing grant schemes would need to be reviewed and cost models and mode shift benefits updated. Schemes would need State aid approvals. 6

7 Understanding Coastal Shipping and Inland Waterways 7 Mode shift freight grants and research into coastal shipping and

8 Why is the research needed? Port Connectivity Study: Recommendation The DfT Maritime Modal Connectivity Team, working with industry, will seek to better understand the barriers, challenges and market opportunities of coastal shipping and within the current freight landscape. The landscape today - What works, what doesn t but more importantly why? Potential for positive externalities from more use of coastal shipping and to move freight Ability to adapt Will trade flows change? Will goods move differently in the future? Can we make better use of available resource? 8

9 What are we doing? Research, Analysis and Reporting Evidence base Literature review and stakeholder engagement Modelling of part-to-fully autonomous vessels on inland and coastal routes Identification of market opportunities Policy options and barriers Identification of barriers Development of policy options Appraisal of policy options Final Report (Spring 2019) Data analysis to create an origindestination matrix Forecasting Forecasting of freight flows transported by coastal shipping and inland waterways Scenario Planning 9

10 What will the report inform? Key to evaluating the current use and will greatly enhance our current understanding of CS / IW Inform Government s future freight policy considerations the role for coastal shipping and inland waterways? Will also inform the Department for Transport s Virtual Freight Team Further enhance our knowledge of UK port connectivity by canal, river and sea Feed into Maritime 2050 and long-term strategic thinking Build on Government evidence around use of smartshipping and autonomous vessels 10

11 What next? Inception meeting 26/11/2018 Progress review 1 December Interim report January Progress review 2 January Project completion February Final report Spring 2019 Stakeholder interviews Quality assurance Phase 1: Evidence base development Phase 2: Policy options and barriers Phase 3: Forecasting 11 Mode shift freight grants and research into coastal shipping and

12 Our contact details Mode Shift Grants: Coastal Shipping and Inland Waterways Research: