dirft iii planning for the future · 2016-04-20 · dirft iii - expansion: need report 2133981v5...

DIRFT III

PLANNING FOR THE FUTURE

THE EXPANSION OF DAVENTRY INTERNATIONAL

RAIL FREIGHT INTERCHANGE

www.DIRFTIII.com

Document - 7.4Regulation - 5(2)(q)Topic - Other DocumentsTitle of Document - Need ReportDate - October 2012Prepared by/Author - Nathaniel Lichfield & Partners

DIRFT III Need Report [Document Ref 7.4] Reg 5(2)(q) Rugby Radio Station Limited Partnership and Prologis UK Limited October 2012

Nathaniel Lichfield & Partners 14 Regent's Wharf All Saints Street London N1 9RL nlpplanning.com

This document is formatted for double sided printing. © Nathaniel Lichfield & Partners Ltd 2012. Trading as Nathaniel Lichfield & Partners. All Rights Reserved. Registered Office: 14 Regent's Wharf All Saints Street London N1 9RL

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DIRFT III - Expansion: Need Report

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Executive Summary

1 This report has been prepared to evaluate and assess the need for the expansion of Daventry International Rail Freight Terminal (DIRFT) on land at the Rugby Radio Station site in Daventry District (DIRFT III) with part in Rugby Borough. The report accompanies an application to the Planning Inspectorate for a Development Consent Order to expand the DIRFT facility to provide a replacement intermodal interchange and rail related distribution buildings on a gross area of approximately 345 hectares of land immediately adjacent to the existing Rail Freight Interchange (RFI). The proposed expansion of DIRFT is a major Nationally Significant Infrastructure Project (NSIP) as defined by the Planning Act 2008.

The Development Need & Opportunity

2 DIRFT is a major, existing Rail Freight Interchange (RFI) located within the northern part of Daventry District to the east of Rugby. DIRFT plays a vital role in the logistics and distribution sector and contributes significantly to the freight industries’ move towards a more sustainable modal share by moving freight by rail rather than by road. The continued success of DIRFT is not surprising to Prologis, who believe the site has unrivalled locational benefits being close to the West Coast Mainline and Junction 18 of the M1. Customers will continue to be attracted by these attributes as fuel prices continue to rise and emphasis and demand for sustainable distribution solutions increase.

3 The current Rail Port at DIRFT was designed in the early 1990’s and opened in 1997. The Rail Port already has a significant amount of on-site infrastructure including five reception sidings, connections and signals with the mainline and through the development of DIRFT II, a tunnel with connections under the A5. DIRFT is regarded as a good example of intermodal terminal design and operation.

4 However, the Rail Port will soon reach its effective capacity and after 13 years of heavy use, there are serious problems with wear and tear. Operationally, the Rail Port has several serious constraints and improvements to the existing infrastructure provision at DIRFT are required. As it would be illogical and unviable to rebuild the existing facility, the most appropriate solution is the development proposed at DIRFT III.

5 The assets of the Rugby Radio Station site present an unparalleled opportunity to support regional and national aims for economic growth and increased sustainability in the logistics and distribution sectors through an expansion of DIRFT.


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Policy Need

6 A clear policy need exists for additional RFI provision. In particular: -

a At the heart of the National Planning Policy Framework (NPPF) is a presumption in favour of sustainable development which should be seen as a “golden thread” running through both plan-making and decision-taking. The NPPF provides specific and clear support for rail freight interchange development. The NPPF also provides significant weight to the need to support economic growth. It is emphasised that the planning system should proactively drive and support sustainable economic development to deliver the infrastructure and business/industrial units that the county needs.

b National Policy Statement (NPS) for National Networks: The Department for Transport was proposing to publish a draft NPS for national networks in 2011, covering strategic road and rail networks and strategic rail freight interchanges. However, the publication of the draft NPS has been delayed.

c Department for Transport Guidance: The Department for Transport has provided guidance on logistics and Rail Freight Interchange development in advance of the publication of the draft NPS. These documents are the ‘Strategic Rail Freight Interchange Policy Guidance’ (November 2011) and ‘The Logistics Growth Review – Connecting People with Goods” (November 2011). The Logistics Review identifies a clear need for Government intervention to support investment in SRFIs, including a focus on the importance of removing planning barriers to sustainable logistics development such as SRFIs. The Strategic Rail Freight Interchange Policy Guidance provides a very clear summary of the need for new and improved SRFIs, focusing on factors including forecasted rail freight growth, the increasing requirement by the logistics sector to integrate rail freight into their transport operations, the requirement for a network of SRFIs in order to facilitate a modal freight shift from road to rail (sought for both sustainability and economic reasons), and the economic growth and job creation benefits of rail freight.

d Other National transport policy: Documents published by the Department of Transport and former Strategic Rail Authority recognise the role which rail freight plays in delivering a sustainable distribution system and emphasise the requirement for Rail Freight Interchanges to be delivered to enable a shift from road to rail freight and associated sustainability benefits.

e Regional policy: Policy 21 of the East Midlands Regional Strategy identifies the West Northamptonshire Housing Market Area as an area which is a preference for the accommodation of further strategic distribution. Policy PA9 of the West Midlands Regional


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Strategy identifies that provision should be made for Regional Logistics Sites (RLS). The Draft Submission version of the West Midlands Phase Two Revision (now abandoned) stated that there is scope for the expansion of existing RLS within the region and DIRFT (which adjoins the regional boundary near Rugby). This was in recognition of the role of DIRFT in meeting demand for RLS arising in the West Midlands. Further, the Panel Report of the Phase 2 Revision identified need for at least 200-250ha of RLS development in the plan period in excess of then currently planned provision.

f Regional Evidence base documents: The East Midlands Strategic Distribution Study identifies that, to meet the then estimated Regional Freight strategy target of 30 additional freight trains per day, 308 hectares (net) of additional land at rail connected strategic logistics sites will need to be brought forward over the period to 2026. An assessment by Nathaniel Lichfield & Partners of ‘pipeline’ strategic logistics sites in the East Midlands has identified that only a small proportion of the East Midlands requirement has been identified thus far. Even taking into account of DIRFT III, an undersupply of Strategic Logistics Site land will remain. Thus, DIRFT III will not lead to an oversupply of Strategic Logistic Sites in the East Midlands and capacity will remain for additional provision in the region. Opportunities for Rail Freight Interchange provision on suitably located and available sites are limited. Ideally, when an opportunity is identified, maximum use of the land available should be made. The scale of development proposed at DIRFT III seeks to secure the most efficient use of the land available at the Rugby Radio Station site in the context of the technical requirements of rail infrastructure geometry.

g The East Midlands Strategic Distribution Study also includes an ‘Assessment of Sites for Rail Freight Development Potential’ which identifies the South West Northants sub-region (where DIRFT III is located) as the highest scoring sub-region assessed. This high score reflects a combination of market demand, access to markets, rail connection, road access and access to labour, all of which is present in the West Northants sub area and which makes the location favourable for the provision of additional rail freight terminal capacity.

h Inter-regional requirements: Overall, it is clear that further development at DIRFT would play a role in meeting a proportion of the requirement for Rail Freight Terminal development identified as needed to serve both the West Midlands and East Midlands. Current/emerging Regional Policy and evidence base documents identify a requirement for 308 ha of additional land at rail connected strategic logistics sites in the East Midlands to 2026 and at least 150 ha of land to serve the West Midlands to 2021. However, it is important to recognise that as set out above,


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national policy and market requirements for RFI development have changed significantly since the evidence-base documents relating to regional policy were written. Although national policy has been generally supportive for some time, the shift towards rail freight has increased significantly in recent years. Therefore, these figures should not be seen as maximum ‘caps’ on development.

i Sub-regional and local context: The Northamptonshire Strategic Employment Land Assessment (November 2009) is clear that DIRFT, given its unique role in the Warehousing/Distribution (B8) market should be distinguished from the wider economic role of Daventry district and Daventry town. The role of DIRFT as an internationally significant centre for strategic distribution and the potential for further growth at DIRFT is recognised at a local level by the emerging Local Development Framework and its evidence base. An assessment of potential rail terminal locations in Northamptonshire identified the expansion of DIRFT onto the Rugby Radio Station land as already being promoted for development by developers who have established the feasibility of the site for rail-served uses. The West Northamptonshire Joint Core Strategy Pre-Submission Version (February 2011) and the Proposed Changes to that draft Pan of July 2012, support further rail connected storage and distribution uses and associated rail and road infrastructure at DIRFT (Policy E4). No objections have been received to this policy in the recent consultation and no changes are proposed to be made to the policy in advance of submission.

Demand for rail-related warehouse buildings

7 There is strong demand for further rail-related warehouse buildings at DIRFT as a result of general logistics market trends together with the unique characteristics of the DIRFT site. DIRFT III would serve the expanding market for larger, well specified and well located units sought by occupiers looking to improve the efficiency of their supply chain. The site has clear locational benefits, being close to the West Coast Mainline and Junction 18 of the M1.

8 Previous take-up at DIRFT is an important indicator of demand for DIRFT III. An analysis of historic take-up rates at DIRFT I and DIRFT II identifies that a proposed 731,000 sqm expansion of DIRFT onto the Rugby Radio Station Site, would roughly equate to a continuation of development rates over recent years, not taking into account the likely increase in demand demonstrated by the attraction of the logistics industry to rail-served sites and the trend for substantially larger warehouse buildings.

9 The demand for further development at DIRFT is also reflected by the demand which Prologis is continuing to experience for the development. The strongest demand for DIRFT is from customers


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either wanting large footprint buildings (over 400,000 sqft) and/or wanting rail connectivity. In terms of recent take-up, it is noted that the pre-let of the 840,000 sq ft building to Tesco at DIRFT II, Plot A was an unprecedented transaction for late 2009. The fact that Tesco wanted this building rather than a vacant unit reinforced their need for rail connectivity, and the unique benefits that DIRFT offers customers.

Rail Freight Demand

10 There are a number of key drivers of demand for Rail Freight Interchanges including: -

a Market demand and government support for Rail Freight Interchanges due to the sustainability benefits of rail freight, which offers better energy-efficiency, reduced emissions and reduces road congestion. These sustainability benefits of rail freight align with business corporate responsibility targets to reduce the businesses’ carbon emissions and increase their sustainability credentials.

b The economic and operational benefits of rail freight in respect of factors such as cost, reliability, flexibility and journey time enable rail freight to offer a competitive alternative to road freight. These benefits are becoming increasingly clear to businesses.

c In terms of sources of demand for rail freight, DIRFT I and the developed part of DIRFT II is already playing a central role in each of the three key service sectors that DIRFT III will be targeting: deep sea containers to and from the Midlands; the domestic intermodal market; and international intermodal services via the channel tunnel.

d The movement of freight by rail in the markets that DIRFT III services is expected to grow faster than the growth the volume of available capacity at intermodal terminals and rail-accessible warehousing. Demand for rail freight at DIRFT is forecast to increase substantially in the period to 2033.


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Contents

1.0 Introduction 1 Purpose of the Report .............................................................................1 Concept of Need and Structure of the Report .........................................2

2.0 About DIRFT 4 DIRFT I and II..........................................................................................4 Proposals for DIRFT III ...........................................................................9

3.0 Need Established by Policy 12 Introduction ...........................................................................................12 Need established by National Policy .....................................................12 Regional Context...................................................................................23 Sub-Regional Context - Northamptonshire ...........................................29 Local Context – West Northamptonshire...............................................32 Impact of the Increased National Focus on Rail Freight........................34 Proposed Scale of the Development.....................................................35 Conclusions ..........................................................................................39

4.0 Need Established by Market Demand for Rail-Related Warehouse Buildings 42

Introduction ...........................................................................................42 National Market Need ...........................................................................42 Regional/Sub-Regional Market Need....................................................43 DIRFT Specific Market Need ................................................................43 Conclusions ..........................................................................................47

5.0 Need Established by Rail Freight Demand 48 Introduction ...........................................................................................48 Key Definitions ......................................................................................48 Factors Influencing Demand for Rail Freight Interchanges ...................49 Market Demand and Trends in Rail Freight Use ...................................52 Domestic ...............................................................................................55 Channel Tunnel.....................................................................................58 What Is the Catchment Area of DIRFT I?..............................................62 Forecast Demand for Freight Transport ................................................64 National Forecast Demand for Freight Transport by Rail ......................65 DIRFT III Forecasts...............................................................................66 Conclusions ..........................................................................................68

6.0 Existing DIRFT Intermodal Terminal Limitations 70 Introduction ...........................................................................................70 DIRFT Specification Considerations .....................................................70


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Conclusions.......................................................................................... 73

7.0 Conclusions 75

Figures

Figure 5.1 Container volumes through UK ports. Source: DfT Maritime Statistics 2009 53

Figure 5.2 Intermodal Freight Moved By Rail. Source: National Rail Trends 2009-10, Office of Rail Regulation 54

Figure 5.3 DIRFT Throughput (Source: Malcolm Logistics) 61

Figure 5.4 Summary of destinations of lorries leaving DIRFT. February 2010 Survey 63

Tables

Table 3.1 Proposed Rail Freight Terminals in the East Midlands 37

Table 4.1 Take-up at DIRFT I and II 44

Table 5.1 Volume of containers handled at major UK ports. source: DfT Maritime Statistics 2009 53

Table 5.2 Deep Sea Container - Trains Per Week Jan Each Year 55

Table 5.3 Results of February 2010 Interview Survey. The survey identified the origin of lorries entering the intermodal

terminal or the destination of lorries leaving 63

Table 5.4 Rail Forecasts - MDS Transmodal 2009 for RFG / FTA 65

Table 5.5 Rail Industry Forecasts - Million Tonnes 66

Table 5.6 DIRFT Rail Port Volume of Units 66

Table 5.7 Forecasts for External and Internal Units (Units per annum, both directions combined) 68

Table 6.1 DIRFT Concrete Repair Works 71


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Glossary and Abbreviations

DIRFT

Daventry International Rail Freight Terminal

DIRFT I

The first phase of DIRFT including the existing Rail Port, granted planning permission in 1993 and 1995 and which is now fully operational and occupied

DIRFT II (expansion land)

Granted outline planning permission in 2005. The building in Zone a Plot A is now occupied and fully operational.

DIRFT III

Proposed expansion

DIRFT Rail Port

Intermodal terminal within DIRFT I which became operational in 1997

DIRFT III Intermodal Terminal

Proposed rail freight interchange facility within DIRFT III

Freight RUS

Network Rail’s Freight Route Utilisation Strategy

NDC

National Distribution Centre – distribution units services the whole of the UK

Northampton Loop line

Loop line of the WCML

NPS

National Policy Statements – setting out national policy on a particular aspect of national infrastructure


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NPPF

National Planning Policy Framework – National planning policy to simplify existing extensive range of Planning Policy Statements (PPS and Guidance (PPG), issued March 2012

NSIP

Nationally Significant Infrastructure Project – the Planning Act 2008 sets out characteristics to enable one to define whether a project is an NSIP

Planning Act 2008

Established changes including a single development consent regime for Nationally Significant Infrastructure Projects

PPS

Planning Policy Statement – national planning policy

RDC

Regional Distribution Centre – the centre distributing to the end purchaser/retail unit

RFI

Rail Freight Interchange

RLS

Regional Logistics Sites

RRSLP

Rugby Radio Station Limited Partnership – joint venture between BT and Aviva Investors alongside Prologis

RS

Regional Strategy – regional planning and economic policy

SELA

Northamptonshire Strategic Employment Land Assessment - published in November 2009

SRA

Strategic Rail Authority


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WCML

West Coast Main Line – between London and Glasgow


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1.0 Introduction

Purpose of the Report

1.1 This report has been prepared to evaluate and assess the need for the expansion of Daventry International Rail Freight Terminal (DIRFT) on land at the Rugby Radio Station site in Daventry District (DIRFT III) with part in Rugby Borough. The report accompanies an application to the Planning Inspectorate for a Development Consent Order (DCO) to expand the DIRFT facility to provide a replacement intermodal interchange and rail related distribution buildings on a gross area of approximately 345 hectares of land immediately adjacent to the existing Rail Freight Interchange (RFI).

1.2 The application is being submitted further to the Planning Act 2008, which established a single development consent regime for Nationally Significant Infrastructure Projects (which include Rail Freight Interchanges). A National Policy Statement (NPS) is anticipated to be issued in respect of National Networks, which will include guidance and criteria in respect of Rail Freight Interchanges (RFIs). However, this NPS has not yet been published and this report is therefore prepared in the absence of specific NPS guidance in respect of RFIs. Notwithstanding the absence of a national strategic framework, which may indicate a spatial component to or criteria for the location of RFIs, the assessment of policy set out in this report describes a very compelling policy need for further Rail Freight Interchange development at DIRFT.

1.3 A number of documents are submitted with the DCO application which jointly establish the planning, commercial and technical justification for the development. These reports include: -

1 Planning Statement, setting out the development plan and other policy against which the Development Consent Order should be considered.

2 The ‘Assessment of Sites for Rail Freight Development Potential’, defining the geographical area within which the ‘need’ for the development exists, examining strategic site selection considerations and providing an assessment of potential locations which could accommodate RFI development.

3 An Environmental Statement, addressing the impact (significance) of environmental effects that may arise as a result of the proposed development and identifying proposed mitigation measures to reduce these effects.

4 A ‘Need Report’ (this report), which assesses the need for the development at DIRFT and RFI developments generally, in respect


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of policy need, market need, rail freight need and other ‘need’ criteria for this development.

5 A Rail Operation Report, detailing the construction, alignment and operational characteristics of the rail connection to DIRFT III and the way in which freight will be moved onto/off the site as well as between the new terminal and buildings within DIRFT and elsewhere.

6 A Consultation Report, which sets out the process of consultation with statutory and non-statutory consultees, including local communities, that has been engaged in by RRSLP and the way in which this consultation has influenced the scheme content and design.

Concept of Need and Structure of the Report

1.4 The purpose of this report is to assist the Planning Inspectorate in understanding the justification for additional RFI development generally and specifically in this location. The ‘need’ for the proposed development is comprised of the policy support/requirement for additional provision, the economic and market requirements for additional development and the other benefits of RFI development including the sustainability advantages of RFIs.

1.5 Chapter 3 of this report provides an introduction to DIRFT I and II and sets out brief details on proposals for the expansion of DIRFT (at DIRFT III). Substantial detail describing the development and the way in which it will operate is contained in the Design and Access Statement and Rail Operation Report respectively. The report then assesses the established need for the expansion of DIRFT by: -

1 Examining the need for the development established by planning policy and planning evidence base documents at a national, regional, sub-regional and local level (Chapter 4)

2 Investigating market demand for rail-related warehouse buildings, both generally at a national/regional level and specifically to this location. The locally specific assessment of market demand includes an analysis of the past take up of rail-related warehousing development at DIRFT and a review of current and projected market demand for rail related distribution buildings in this locality (Chapter 5)

3 Examining need established by rail freight demand by summarising the sustainability, economic and operational benefits of increased rail freight. Analysing sources of demand for rail freight at a national, regional and local level and forecasting demand for take-up of further rail freight facilities (Chapter 6).

4 Identifying need established by infrastructure specification considerations. This includes an explanation of how requirements


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to improve infrastructure at DIRFT would be most appropriately met through expansion at the DIRFT III site (Chapter 7).

5 Drawing together overall conclusions (Chapter 8).

1.6 This report provides the context for the ‘Assessment of Sites for Rail Freight Development Potential’ to define the geographical area within which the ‘need’ for the development exists.

1.7 Understanding the ‘need’ for the development will allow the Planning Inspectorate to make a balanced judgement as to the appropriateness of issuing a Development Consent Order for the development having regard to each of the issues considered in the published suite of documents. This is particularly the case should it be considered that the proposals are to any extent contrary to policy objectives or give rise to any ‘harm’ in policy or environmental issues.

1.8 It is emphasised that the demonstration of ‘need’ for the development is not a requirement of the 2008 Act or a requirement of any other policy regime. The need case for the development for which Development Consent is sought at DIRFT III is prepared by the landowners, Rugby Radio Station Limited Partnership (RRSLP) and Prologis (UK) Limited (Prologis) (“the applicant”) due to the absence of a National Policy Statement on National Networks that was due to be prepared and cover the issue of national requirements for Rail Freight Interchange development. Further, a recognition that any development will generate environmental or other ‘effects’ which have to be taken into account when determining an application, suggests that it is appropriate to establish the extent to ‘need’ for the development against which any such ‘effects’ can be judged.


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2.0 About DIRFT

DIRFT I and II

Development History

2.1 DIRFT is a major existing Rail Freight Interchange (RFI) located within the northern part of Daventry District to the east of Rugby. DIRFT comprises: -

1 DIRFT I - The first phase of DIRFT, which comprises DIRFT South, Central, and East, granted planning permission in August 1993 (DIRFT East) and in June 1995 (DIRFT South and Central).

2 DIRFT II (expansion land) – granted outline planning permission in January 2005.

3 DIRFT III (proposed expansion on a gross area of approximately 345 hectares of land) - the site stretches to the north of the existing DIRFT estate and Rail Terminal and is bounded by the A5 to the west, the M1 to the east and agricultural fields leading to the village of Lilbourne to the north.

Role and Function of DIRFT

2.2 DIRFT is a highly successful development initiative based originally around the concept of an international rail-port linking the UK with the continent, via the Channel Tunnel. It was the first private sector rail freight interchange and the rail port at DIRFT, which became the country’s busiest rail freight terminal in 2003, handles an average of 365 container units per day.1

2.3 DIRFT is both regionally and nationally significant. It plays a vital role in the logistics and distribution sector and contributes significantly to the freight industries’ move towards a more sustainable modal share by moving freight by rail rather than by road.

2.4 DIRFT’s role has evolved from its inception in the early 1990’s when it represented a response to very broad policy objectives through to today where DIRFT is a successful international rail freight terminal with a well-used and strategically important Rail Port, with rail-linked or rail-related distribution buildings in close proximity to the Rail Port. The logistics sector in Northamptonshire is now a highly important facet of the UK economy and the presence of DIRFT has underpinned this

1Source: Malcolm Group volume data, 2010


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nationally important function.

2.5 DIRFT has a vital role to play in the continued sustainable distribution of goods through the UK. Growing imports and demand for all types of products have significantly increased the volume of goods moving across the UK over the last 25 years. This will continue, and container traffic at UK ports is projected to grow from 2007 volumes by up to 74% by 2030.2 Substantial further intermodal capacity will be needed to meet future demands for the movement of goods by rail and the existing DIRFT Rail Port, designed in the early 1990s, will need to be replaced by a larger and more efficient facility.

Ownership and Tenure of DIRFT

2.6 DIRFT is owned by a number of different institutional owners. The buildings are let to a range of major companies the majority of which are in the retail sector. Prologis owns the existing rail terminal and the entirety of DIRFT II. In addition, Prologis manage the existing DIRFT common estate.

2.7 Prologis owns the DIRFT Rail Port and has leased this element of the development to WH Malcolm, which also owns and operates one of the rail-linked buildings on DIRFT South. Prologis has a rail freight strategy which embodies the encouragement of the use of rail by the logistics industry and the procurement of additional RFI capacity in the UK. Ownership of the DIRFT Rail Port by Prologis has given a unique insight into the operational requirements of such facilities, how RFI’s interact with commercial strategic distribution property requirements and the infrastructure constraints in this regard at DIRFT.

Distribution Buildings at DIRFT I and II

2.8 DIRFT I comprises approximately 350,892 sq m of rail-linked and rail-related warehouse and distribution buildings. All of the floor space approved by the two outline planning permissions for DIRFT I was occupied between 1997 (when the rail-port opened and therefore buildings on the site could be occupied) and 2005 (when the last building was constructed).

2.9 Outline planning permission for the expansion of DIRFT (known as DIRFT II) was granted in January 2005 for 180,741 sqm (1,945,500 sq ft) of rail-linked distribution and manufacturing buildings (LPA ref: DA/2002/1365). Reserved Matters Approval for a single distribution building for Tesco with its own intermodal area on Zone 1 was

2 DfT Report: Update of UK Port Demand Forecasts to 2030, July 2007 – MDS

Transmodal Limited


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subsequently granted in September 2008 (LPA Ref: DA/2007/1328). This building is now constructed and occupied.

2.10 There are two remaining development zones on DIRFT II. Zone 2 is capable of accommodating a single unit of up to 420,000 sqft. Reserved Matters have been approved at Zone 3 for two units of 275,000 sqft and 403,000 sqft respectively. A larger single unit could be accommodated on Zone 3 and the precise scale of any building on this remaining development zone is dependent on occupier requirements. Prologis is in discussions with a number of parties for the remaining plots on DIRFT II with the expectation that a commitment on one of the plots would be confirmed in 2012.

2.11 The continued success of DIRFT is not surprising to Prologis, who believe the site has unrivalled locational benefits being close to the West Coast Mainline and Junction 18 of the M1. Customers will continue to be attracted by these attributes as fuel prices continue to rise and emphasis and demand for sustainable distribution solutions increase.

Rail Terminal Specification and Capacity

Introduction

2.12 The current Rail Port at DIRFT was designed in the early 1990’s and opened in 1997. The Rail Port already has a significant amount of on-site infrastructure including five reception sidings, connections and signals with the mainline and through the development of DIRFT II, a tunnel with connections under the A5. DIRFT’s Rail Port is regarded as being a good example of intermodal terminal design and operation. The terminal has proved flexible enough to perform a different role to that it was designed for: handling channel tunnel intermodal traffic.

2.13 Most containers passing through the DIRFT Rail Port are travelling from or to major retail distribution centres in the East Midlands. Many of these are actually located within the DIRFT estate, including major facilities operated for Tesco and ASDA. Other concentrations of retail distribution centres served from DIRFT are at Magna Park and Northampton, neither of which benefit from direct access to a rail terminal.

2.14 Typically the DIRFT rail traffic is either “inter depot” – for instance linking distribution centres near to DIRFT with distribution centres in Scotland – or import / export – moving containers between ports and distribution centres.

2.15 The number of containers handled annually has grown from 7,500 in 1997 to 106,000 in 2010.


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Existing Connection

2.16 The current DIRFT Rail Port already has connection in both (north and south) directions to the Northampton Loop line of the West Coast Mainline. From the start the terminal was designed to handle long trains (up to 775 metres overall length), trains formed of conventional wagons as well as intermodal trains. The Rail Port accommodates trains hauled by electric traction as well as diesels.

2.17 The Northampton loop of the London to Glasgow West Coast Main Line (WCML) consists of the two “slow” lines, which diverge from the “fast” lines at Hanslope Junction, seven miles north of Milton Keynes. They rejoin them some 27 miles further north at Hilmorton Junction, a mile south of Rugby.

2.18 The WCML is electrified on the 25kv AC overhead line system and it has been cleared to the W10 loading gauge, currently the most generous gauge on the national network and a route giving maximum capacity for rail freight use as befits the status of the line as part of the Trans European Rail Fright Network.

Existing Internal Rail Layout

2.19 The existing DIRFT I development consists of the intermodal terminal where containers and swap bodies are moved by crane from rail wagons to road vehicles and vice versa, rail-linked and rail-related warehouses. These areas are linked to the West Coast Main Line loop through a series of sidings and a Reception Yard.

2.20 The Reception Yard consists of five tracks, each capable of holding a full length (775 metres) train. The Reception Yard is linked to the WCML Loop through single lead junctions at both the north and south ends. Single lead junctions allow one train at a time to enter or leave; the two junctions together allow two trains to move simultaneously. Both junctions are fully signalled and controlled jointly by Network Rail and DIRFT signallers who must co-operate to authorise train movements. The junctions are known as Daventry North Junction and Daventry South Junction.

2.21 The junctions are electrified. Three of the five reception tracks are electrified for their full length. The two tracks that are closest to the intermodal terminal are only electrified at their southern end, in order to avoid any possible contact with cranes lifting containers. This means that on these two sidings electric locomotives can be attached to trains departing to the south but not to the north. Trains arriving behind electric traction must be routed into one of the other three tracks.

2.22 Locally based diesel shunting locomotives move wagons between the Reception Yard and the intermodal terminal or warehouses. They draw wagons south into a shunting neck, then propel them north.


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DIRFT II

2.23 DIRFT II is now under construction to the west of the original terminal. DIRFT II includes a second intermodal terminal, operated by Tesco and used in conjunction with their warehouse occupied in May 2011 and further rail-linked warehouses, potentially incorporating further customer dedicated intermodal areas. The site is accessed by a new single track branch line that originates at the west end of the existing reception sidings. It passes under the A5 highway beneath a new bridge. The line will then cross over the A428 on a new bridge. Along the route there will be turnouts to private sidings for individual warehouses.

2.24 This branch line has been designed so that it can be doubled to provide further rail capacity in future if required.

Issues Affecting DIRFT

2.25 DIRFT is regarded as a good example of intermodal terminal design and operation. However, the Rail Port will soon reach its effective capacity and after 15 years of heavy use, there are serious problems with wear and tear. Operationally, the Rail Port has several serious constraints:

• While the reception yard was designed for full length 750m long trains, the 4 loading sidings are each only 300m long. This means that even 550m long trains must be split and shunted into the terminal in two sections, reducing capacity and adding cost and time.

• The area for storing containers in stacks is only 2.4 Hectares, which is considered small for a terminal of this importance. Furthermore, this area cannot be used efficiently because of the shape of the storage area.

• The Rail Port currently operates 4 reach stackers in order to load and unload trains efficiently. It would be difficult to increase the number of reach stackers as the size and shape of the terminal means that reach stackers would increasingly be blocking each other in and becoming inefficient and potentially dangerous to operate.

• There are serious problems with the concrete paving in the handling area, as described below.

2.26 Since the Rail Port opened, the containers have been lifted and stacked by reach stackers. These are large lifting tractors that can lift a 45 tonne container from the second rail track (i.e. over one rail track). At this point of lifting, the load through the front wheels can be up to 120 tonnes. In addition, the reach stacker turns using its rear wheels and therefore the front wheels subject a significant twisting movement through to the slab beneath. These forces have caused major wear to the concrete slab. This wear has required regular maintenance which is becoming worse at an increasing cost. While throughput has grown


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steadily since the Rail Port was opened in 1997, these increasing costs could soon exceed the rent generated by the Rail Port creating a liability rather than an investment.

2.27 The unloading tracks within the Rail Port are too short to accommodate a full length 550m train, let alone the 750m long trains which will be the future standard. As a result, trains need to be handled in short sections which adds to both cost and the time it takes to load or unload each train.

2.28 More information on the issues affecting the DIRFT Rail Port is provided at Section 7.0 below.

Proposals for DIRFT III

Introduction

2.29 DIRFT III is a proposed expansion to DIRFT I and II on a gross area of approximately 345 hectares of land. The site stretches to the north of the existing DIRFT estate and is bounded by the A5 to the west, the M1 to the east and agricultural fields leading to the village of Lilbourne to the north.

2.30 Development of further strategic logistics and distribution development in this location will meet market demand as distribution and logistics sectors continue to grow and rail connected movement of goods continues to rise in importance.

2.31 The assets of the Rugby Radio Station site present an unparalleled opportunity to support regional and national aims for economic growth and increased sustainability in the logistics and distribution sectors through a potential expansion of DIRFT.

DIRFT III as Nationally Significant Infrastructure

2.32 Rail Freight Interchanges are identified by government as significant national infrastructure. The provision of RFIs is therefore an important component of the national economic strategy as well as being a component of the UK’s drive towards a more sustainable and carbon neutral future.

2.33 Nationally significant infrastructure is identified in the Planning Act, 2008, Rail Freight Interchanges are defined by the Planning Act 2008 as being: -

1 At least 60 hectares in area (DIRFT III is approximately 345 hectares)

2 Capable of handling consignments of goods from more than one consignor and to more than one consignee, and at least 4 goods


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trains per day (DIRFT III is anticipated to be capable of handling 32 inbound trains per day);

3 The Rail Freight Interchange must be part of the railway network in England and include warehouses to which goods can be delivered from the railway network either directly or by means of another form of transport (DIRFT III will include rail connected warehouses and an intermodal terminal);

4 Not part of a military establishment (this is the case at DIRFT III, which is a joint venture between BT and Aviva Investors who, in association with Prologis UK is promoting the development of land at Rugby Radio Station).

2.34 Having regard to the above criteria, the proposed expansion of DIRFT is a major Nationally Significant Infrastructure Project (NSIP). Rail Freight Interchanges must include large scale warehouses to which goods can be delivered from the railway network. At DIRFT these will include warehouses which benefit from direct rail connectivity to the buildings and those located in close proximity to the intermodal area of DIRFT III from where vehicles can convey containers efficiently to the warehouses within the DIRFT estate.

The Rugby Radio Station Limited Partnership

2.35 The Rugby Radio Station Limited Partnership is a joint venture between BT and Aviva Investors, which with Prologis is promoting the expansion of the Daventry International Rail Freight Terminal (DIRFT) onto land at the Rugby Radio Station within West Northamptonshire (DIRFT III). The land required to implement the proposed DIRFT III development is within the ownership of Aviva, BT and Prologis. This ownership includes land required for necessary rail connection from the existing DIRFT Rail Port, owned by Prologis. Single joint ownership of such a significant site presents a unique opportunity to prepare and implement a high quality and appropriately phased masterplan with high levels of environmental performance to support the long-term delivery of sustainable logistics development in line with regional and national policy.

2.36 As the largest provider and owner of logistics buildings in the UK, Europe and globally, Prologis has a particular insight into the requirements of and changes taking place within the world distribution market. Prologis has been a strong advocate for sustainable property solutions for a number of years. This manifests itself in increasingly more sustainable, lower carbon buildings and also the use of rail to transport goods.

2.37 As well as being one of the land owner promoters of the further expansion of DIRFT (DIRFT III), Prologis brings to bear the company’s substantial experience in the strategic distribution sector, in particular,


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relating to rail-served distribution development and complex project procurement.

Specification and Capacity

2.38 The proposals for DIRFT III do not require any additional connections to the mainline, but utilize those already in place. When compared to other proposals that require new rail connections, this is a major cost benefit in addition to the operational benefits and time savings.

2.39 DIRFT III will, like DIRFT I, be able to receive and dispatch goods in intermodal containers or in covered rail wagons or vans. Generally, the intermodal containers will be transferred on and off the trains in the intermodal terminal, while vans can be loaded and unloaded at rail connected warehouses.

2.40 The proposals for the new rail freight terminal at DIRFT III are for a terminal and associated rail infrastructure that can receive 750m long freight trains without having to break the trains down. The terminal will use rail mounted gantry cranes to unload and load the trains, load and unload road going vehicles and lift to a stack under the gantry crane. It is believed that this will remove future operational issues that the current Rail Port is currently suffering from.

2.41 The capacity of the new rail terminal is to receive as many as 32 trains a day. Prologis has built contingency into the scheme design and as freight trains get longer the new facility will be able to handle more containers without an increase in train paths.

2.42 Information on the proposed rail layout, normal procedure for moving trains, branch line utilization, terminal capacity etc are provided by the Rail Operation Report, which also accompanies this application. However, it is particularly noted that: -

• Branch Line Utilisation: even assuming a six hour shutdown for maintenance, the branch line could still accommodate at least 36 loaded trains in each direction.

• Terminal Capacity and Layout: the area set aside for the intermodal terminal is ideal for such a facility, being long enough to handle full length trains and rectangular, which allows the best use to be made of space. The principles behind the design of the new terminal are based on best practice identified from a survey of high capacity intermodal terminals across Europe.

• Loading Gauge: DIRFT is located on the W10 gauge network. Trains from DIRFT can access Southampton, Felixstowe, Tilbury, and Liverpool on W10 cleared routes, allowing deep sea containers to be carried efficiently.


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3.0 Need Established by Policy

Introduction

3.1 This section demonstrates a policy need for the development of RFI’s. This includes ‘general’ need identified at a national level together with specific need for an expansion to DIRFT identified by policy and evidence-base documents at a regional, sub-regional and local level.

3.2 In respect of terminology, it is noted that many of the policy documents set out below refer to this type of development as being a Strategic Rail Freight Interchange (SRFI), but the Planning Act 2008 and associated documentation refers to this form of development as a Rail Freight Interchange (RFI). As this application is being submitted further to the Planning Act 2008, the development is generally referred to as a RFI unless in the context of policy documents etc which refer to SRFI’s.

Need established by National Policy

Introduction

3.3 This section of the report considers the ‘need’ for further RFI development at a national level, having regard to national policy and appeal decisions.

3.4 At the national level, there is considerable support for the development of further RFI capacity within England. As discussed above, RFI development has been brought within the meaning of nationally significant infrastructure by the 2008 Planning Act due to its importance to the UK economy.

The National Planning Policy Framework (March 2012)

3.5 The National Planning Policy Framework (NPPF) emphasises the importance of National Policy Statements for major infrastructure in the determination of nationally significant infrastructure projects, whilst also noting that other material considerations of relevance may include the NPPF:

3.6 “This Framework does not contain specific policies for nationally significant infrastructure projects for which particular considerations apply. These are determined in accordance with the decision-making framework set out in the Planning Act 2008 and relevant national policy statements for major infrastructure, as well as any other matters that are considered both important and relevant (which may include the National Planning Policy Framework). National policy statements form part of the overall framework of national planning policy, and are a material consideration in decisions on planning applications.” (paragraph 3).


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3.7 The draft National Policy Statement for national networks has not yet been published (see below). However, the NPPF contains policies of relevance to the determination of this application.

3.8 At the heart of the NPPF is a presumption in favour of sustainable development, which should be seen as a “golden thread” running through both plan-making and decision-taking. The Framework sets out how sustainable development is to be delivered. This includes a focus on: -

1 Promoting Sustainable Transport, with the transport system identified as requiring balancing in favour of sustainable transport modes (Paragraph 29). NPPF provides specific and clear support for the development of rail freight interchanges, with Local authorities required to “… work with neighbouring authorities and transport providers to develop strategies for the provision of viable infrastructure necessary to support sustainable development, including large scale facilities such as rail freight interchanges …” (Paragraph 31).

2 Building a strong, competitive economy, with significant weight placed on the need to support economic growth through the planning system (paragraph 19). Investment in business should not be over-burdened by the combined requirements of planning policy expectations (paragraph 21). Overall, planning should “proactively drive and support sustainable economic development to deliver the homes, business and industrial units, infrastructure and thriving local places that the country needs. Every effort should be made objectively to identify and then meet the housing, business and other development needs of an area, and respond positively to wider opportunities for growth” (Paragraph 17, bullet point 3).

3.9 The Framework also requires that, in preparing the evidence base for their Local Plan, Local Planning Authorities take account of the need for strategic infrastructure including nationally significant infrastructure (Paragraph 162).

National Policy Statement for National Networks

3.10 The Department for Transport was proposing to publish a draft National Policy Statement (NPS) for national networks in 2011, covering strategic road and rail networks and strategic rail freight interchanges. However, the publication of the draft NPS has been delayed. The delay in publishing the draft NPS relates to issues other than policy relating to logistics and transport interchanges. The Department for Transport has therefore decided to provide guidance to industry and local government on logistics and Rail Freight Interchange development in advance of the publication of the draft NPS. These documents are ‘Strategic Rail Freight Interchange Policy Guidance’ (November 2011) and ‘The


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Logistics Growth Review – Connecting People with Goods” (November 2011). A Summary of relevant points from these documents is set out below

The Logistics Growth Review – Connecting People with Goods (November 2011)

3.11 This document emphasises that the logistics sector is a hugely important part of the UK economy, with the output of core logistics activities in 2009 accounting for almost 9% of UK GVA and around 7% of total employment. It is also a critically important enabler of the success of other businesses (para. 1).

3.12 Facilitating conditions for growth in the logistics sector is identified as critical to the Government’s growth agenda (para. 3). Here, it is identified that rail freight is expected to expand around 30% in the next seven years, but that “this expansion will be difficult to deliver unless the industry is able to develop modern distribution centres in appropriate locations to serve our major conurbations, providing effective integration between rail and trunk networks – namely, Strategic Rail Freight Interchanges (SRFIs). Hence, it is recognised that the development of SRFIs is critical to the expansion of rail freight, with The Logistics Growth Review stating that “it is extremely important that more modern, high specification logistics buildings and intermodal terminals in the form of Rail Freight Interchanges (RFIs) are now approved and built in order to give occupiers the opportunity to actively move more goods by rail” (page 7).

3.13 The Logistics Growth Review notes that in recent years, five out of six applications for SRFIs have been rejected through the planning process, demonstrating a clear need for Government intervention to support investment in SRFIs. It is recognised that SRFI development not only benefits the rail freight sector but also creates direct employment opportunities and plays an important role in serving regional markets and promoting international connectivity and ports growth. The report therefore includes a focus on the importance of removing planning barriers to sustainable logistics development, with a particular focus on strategic rail freight interchanges. Here the Logistics Growth Review refers to the joint Written Ministerial Statement by the Secretary of State for Transport and the Secretary of State for Communities and Local Government, which supports development of and investment in major freight terminals. The Logistics Growth Review also refers to the Strategic Rail Freight Interchange guidance document. An explanation of this document is set out below.


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Strategic Rail Freight Interchange Policy Guidance (November 2011)

3.14 The Strategic Rail Freight Interchange Policy Guidance sets out Government policy for Strategic Rail Freight Interchange (SRFI) infrastructure. It has been produced in the interim pending the publication of the Department for Transport’s consultation document on the National Networks National Policy Statement (NPS). The Policy states that it may be taken into account by the Infrastructure Planning Commission (now the Planning Inspectorate) in its decision making on development consent applications for SRFI infrastructure (para. 1.1). The guidance can therefore be used to help developers, examiners and decision-makers make informed investment and planning decisions in the interim before the launch of the consultation on the National Networks NPS.

3.15 The SRFI Policy Guidance identifies (para. 2.1) that the main objectives of Government policy for Strategic Rail Freight Interchanges are to:

1 Reduce road congestion – to deliver goods quickly, efficiently and reliably by rail and help to reduce congestion on our roads;

2 Reduce carbon emissions – to meet the Government’s vision for a greener transport system as part of a low carbon economy;

3 Support long-term development of efficient rail freight distribution logistics – to ensure a network of SRFI- modern distribution centres linked into both the rail and trunk road system in appropriate locations to serve our major conurbations;

4 Support growth and create employment – through the transfer of freight from road to rail.

3.16 Government aims to meet these objectives by encouraging the development of a robust infrastructure network of Strategic Rail Freight Interchanges and will seek to facilitate the achievement of this objective. “The Government believes that a network of SRFIs is needed to serve the major centres of population and support the longer-term development of efficient rail freight distribution logistics” (para. 2.3.3). The development of a network of SRFIs also supports the Government’s overall carbon reduction strategy, to which it is firmly committed. It is noted that the transfer of freight from road to rail has a part to play in a low carbon economy through the development of infrastructure that will be able to adapt to climate change and help to address climate change (para. 2.3.2).

3.17 It is recognised that over recent years, rail freight has started to play an increasingly significant role in logistics and has become an important driver of economic growth. “The Government supports the transfer of freight from road to rail, where this is practical and economic” (para 2.3.4). It is also recognised that it is important that SRFIs are located near the business markets they will serve and are linked to key supply


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chain routes, which means that “the number of locations suitable as SRFI will be limited” (para 2.3.4).

3.18 The Government is taking measures to unblock the development of SRFIs, which include asking Network Rail to provide industry support to the development of a network of SRFI sites to meet business demand (para. 2.4).

3.19 The SRFI Policy Guidance identifies that “a network of SRFIs, complemented by other freight interchanges and terminals, is required to support long-term development of efficient rail freight distribution logistics” (Para. 3.1). The SRFI Policy Guidance states that there will be a demand for new and improved SRFIs, because of the following main drivers:

Rail Freight Growth

1 The industry, working with Network Rail has produced unconstrained rail freight forecasts which indicate that new rail freight interchanges are likely to attract substantial business, generally new to rail. In the baseline year (2006) a total of 116 million tonnes were transported by rail: by 2019 this figure is expected to reach 139 million tonnes; and by 2030 179 million tonnes.

2 Although these forecasts do not in themselves provide sufficient granularity to allow site-specific need cases to be demonstrated, they do confirm the need for an expanded network of large SRFIs across the regions to accommodate long-term growth in rail freight. These forecasts also indicate that new rail freight interchanges are likely to attract substantial business, generally new to rail.

The changing needs of the Logistics Sector

3 The users and buyers of warehousing and distribution services are increasingly looking to integrate rail freight into their transport operations with rail freight options sometimes specified in procurement contracts. This requires the logistics industry to develop new facilities that need to be located alongside the major rail routes, close to major trunk roads as well as near to the conurbations that consume the goods. The location of many existing rail freight interchanges in traditional urban locations means that there is no opportunity to expand (although this is not the case at DIRFT, reflecting its location away from a traditional urban centre).

4 “A network of SRFIs is a key element in aiding the transfer of freight from road to rail, supporting sustainable distribution, rail freight growth and meeting the changing needs of the logistics industry, especially the ports and retail sector.” (para. 3.2.2). Thus, a network of SRFIs is required to meet the growth in rail


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freight and the changing needs of the logistics industry, especially the ports and retail sector.

Sustainable Transport and the Low Carbon Economy

5 Efficient and sustainable freight transport is increasingly important both to achieve our environmental goals and to support low carbon transport by encouraging the transfer of freight from road to rail. It is noted that “Rail transport generally has a less negative impact on society than road transport and so has a crucial role to play in delivering significant reductions in pollution and congestion.” (para. 3.2.3).

6 “Government policy is to support low carbon transport by encouraging the transfer of freight from road to rail and facilitating future rail freight growth. This is because, tonne for tonne carried, rail freight produces five times less carbon dioxide emissions than road freight and up to fifteen times less noxious emissions. It also has de-congestion benefits – an aggregates train can remove 77 heavy goods vehicles from our roads; a container train can remove 43 heavy goods vehicles from our roads.” (para. 3.2.3).

7 To facilitate this modal transfer, a network of SRFIs is needed across the regions, to serve regional, sub-regional and cross-regional markets.

UK Economy, National and Local Benefits – Jobs and Growth

8 Rail freight has become an important driver of UK economic growth. It has expanded by 60% over the last decade and is expected to grow by a further 30% up to 2019. Rail freight is therefore of strategic importance, has started to play an increasingly significant role in logistics and has become an important driver of economic growth.

9 SRFIs can provide considerable benefits for the local economy. For example, they can create job opportunities and contribute to the enhancement of people’s skills and use of technology. with wider longer term benefits to the economy. They can bring together businesses to produce economic benefits over and above those reflected in the value of transactions among those businesses. The contribution of SRFIs to skills and technology with wider long term benefits to the economy is emphasised by the document.

3.20 Thus, the ‘Strategic Rail Freight Interchange Policy Guidance’ document makes reference to many of the sources of demand for SRFIs referred to by this Need Report.

3.21 In summary, the need for further rail freight developments is very clearly summarised by the ‘Strategic Rail Freight Interchange Policy Guidance’ document. The need for RFI development has also been acknowledged


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in other policy documents as outlined below and in decisions on major RFI schemes such as the Kent International Gateway rail freight depot at Bearsted, where the inspector stated that: -

“… there is no doubt that longstanding Government policies have sought to encourage the inland transport of freight by rail, as opposed to road. If this is to occur, it is accepted that a network of SRFIs must be provided throughout the country to handle containers. (para. 18.193).

Alternatives to meeting the demand for Strategic Rail Freight Interchange Infrastructure

3.22 The document also examines alternative approaches to meeting the demand for Strategic Rail Freight Interchange infrastructure. In summary, this analysis identifies (Section 3.3) that: -

1 Reliance on the existing Rail Freight Interchanges to manage demand is not a viable option. Congestion, costs and delays would constitute a constraint on economic growth, private sector investment and job creation.

2 Reliance on a larger number of smaller Rail Freight Interchange Terminals could not provide the scale economies, operating efficiencies and benefits of the related business facilities offered by SRFIs.

3 Reliance on road-based logistics would not represent an economically or environmentally sustainable model for the future. A substantial modal shift to rail is therefore required, which will require sustained investment in the capability of both the national rail network and in the terminals and interchange facilities which serve it.

4 As a consequence, it is concluded that an expanded network of SRFIs is likely to be needed to meet the expected increase in freight and the demand for a modal shift from road to rail.

Characteristics of Strategic Rail Freight Terminals

3.23 The document (section 4.0) identifies the following characteristics of an SRFI: -

1 A larger RFI facility – in excess of 60 hectares and capable of handling over 4 goods trains per day (and where possible be capable of increasing the number of trains handled).

2 Provide for a number of rail-connected or rail-accessible buildings for initial take up, together with rail infrastructure, to allow more extensive rail connection within the site in the longer term.

3 Initial stages of the development must provide an operational rail network connection and areas for intermodal handling and container storage.


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4 Large enough to accommodate longer trains with modern wagons, and provide rapid means of cargo transfer, handling and storage. Preferably, SRFIs should have the capability to handle 775 metre trains with an appropriately configured on-site infrastructure and layout.

5 May also provide activities which add value to the process of modal transfer such as warehousing, stockholding, order picking, container repair and materials processing.

6 Located alongside the main trunk rail routes (especially the Strategic Rail Freight Network). Adequate links to the rail network are essential. As a minimum a SRFI ideally should be located on a route with a gauge capability of at least W8 or capable of enhancement to a suitable gauge.

7 Close to the motorway and trunk road network to allow rail to effectively work with and alongside road freight.

3.24 It is also acknowledged that the provision of new SRFI is entirely commercially driven by the private sector. SRFI capacity needs to provided at a range of locations to provide the flexibility to match the changing demands of the market. .

Other National Guidance and Policy

Strategic Rail Freight Network: The Longer Term Vision (September 2009)

3.25 Published by the Department of Transport, this document recognises the key role which rail freight plays in delivering a sustainable distribution system and its contribution to the achievement of economic and environmental objectives. The document summarises interventions and investment which are required for the development of the Strategic Rail Freight Network.

Strategic Freight Network

3.26 It is the responsibility of Network Rail to plan for a network which delivers the capacity to meet the objectives of the government and which addresses the needs of passenger and freight train operating companies. This is achieved through a combination of:

• Short term planning (using the timetable to accommodate demand within the existing system)

• Medium term planning (the Route Utilisation Strategies which identify better ways to provide capacity); and

• Long term planning (planning and investment strategies to deliver more capacity, for instance HS2, the proposed high speed line which will release capacity on the WCML).


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Strategic Rail Freight Interchange Policy (July 2005)

3.27 The Strategic Rail Freight Interchange Policy was prepared by the Strategic Rail Authority and informs stakeholders of the need for, form, function and operating characteristics and role of Strategic Rail Freight Interchanges (Strategic RFI).

3.28 Section 2 notes that the transfer of freight from road to rail has long been a Government objective (paragraph 2.3) and refers to the SRA Strategy on Rail Freight, which identifies the need for interchange capacity to support long term growth (paragraph 2.9).

3.29 Strategic RFIs are identified as key features of national rail infrastructure necessary to promote a shift from road to rail freight and to achieve the associated sustainability benefits (paragraph 4.3). Section 5 sets out the environmental benefits which can accrue from the conversion of freight movements from road to rail and it is also acknowledged that rail use can assist in reducing congestion and journey times, which has both environmental and economic benefits. In effect, it is identified that rail freight cannot effectively grow without the necessary national interchange infrastructure to facilitate rail accessibility and ease of use in commercial freight journeys (paragraph 6.1). Strategic RFI are critical to the growth of rail in the general freight market and there is strong Government policy support for their development (paragraph 7.1).

3.30 The Strategic Rail Freight Interchange Policy also identifies that there is an obligation on the planning system to support the development of Strategic RFI via its planning policy and development control functions (paragraph 7.3). Policy should not predetermine the outcome of applications for new or expanded Strategic RFI, but should present the tools to allow planning authorities to consider proposals in a constructive and informed manner. These should include provision for achieving the required balance where there are conflicting interests (paragraph 7.11).

Status of the SRA Strategic Rail Freight Interchange Policy (Oct 2005)

3.31 A letter by the Department for Transport clarifies the status of the Strategic Rail Freight Interchange Policy published by the Strategic Rail Authority (SRA) in March 2004 in the light of the 2004 Railways White Paper, the Railways Act 2005 and the Secretary of State for Transport's statement to Parliament about rail freight.

3.32 The letter states that the SRA ceased to exist from early 2006. However, the interchange policy was based on the Government's existing policies for transport, planning, sustainable development and economic growth, and much of the material contained in chapters 4, 5, 6, and 7, is still relevant. For this reason the document is retained on the Department for Transport’s website as a source of advice and guidance.


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Delivering a Sustainable Railway (July 2007)

3.33 The white paper 'Delivering a sustainable railway', published on 24 July 2007, fulfils the remit the then Government set itself in 2005 to provide strategic direction for the rail industry.

3.34 In respect of railway freight, Section 9.0 of the white paper recognises that significant private sector investment in new equipment and rolling stock, along with competition between private sector operators, has improved the quality of service to freight customers. The Government is confident that rail freight will continue to grow over the next 10 years, welcomes the long-term charges regime established by the ORR and supports the long term stability of freight access contracts.

3.35 The Government will work with the industry to develop and facilitate the delivery of the Strategic Freight Network, for which £200 million of Network Rail investment has been identified in the period to 2014.

The Future for Rail (2004)

3.36 The White Paper 'The Future of Rail' set out a blueprint for a new streamlined structure for Britain's Railway. The document establishes that “The Government's priority for rail has to be to secure the best value for passengers, freight users and taxpayers from its fixed transport budget, and to ensure that the transport needs of different users and of different regions and communities are met in the most efficient way possible” (Paragraph 2.5.1).

The Future of Transport: A Network for 2030 (2004)

3.37 Building on the policy measures in the 10 Year Plan for Transport, this White Paper considers factors which are likely to shape the transport system over the next 30 years, and sets out the Government's strategy to address these issues, including an outline of expenditure plans to 2015. The Government's three stated themes, upon which the strategy is built, are: sustained investment over the long term, improvements in transport management, and planning ahead.

3.38 ‘The Future of Transport: A Network for 2030’ confirms that the Government will continue to continue to encourage freight traffic to be shifted from road to rail or water where this makes sense, and where appropriate will offer financial support.

Towards a Sustainable Transport System (2007)

3.39 The Government published ‘Towards a Sustainable Transport System' in October 2007. This sets out the how the Government is responding to the recommendations made in the Eddington Transport Study (to improve transport’s contribution to economic growth and productivity) and to the recommendations in the Stern Review (to reduce carbon


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emissions), as well as setting out the Department for Transport’s plans for 2013-14.

Network Rail Freight Utilisation Strategy (2007)

3.40 The 2007 Network Rail Freight Utilisation Strategy included the following illustration of the proposed W10 network. It is worth noting that the key Southampton – Midlands route shown in red has already been completed, and that DIRFT lies at the heart of the proposed W10 network.


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Delivering a Sustainable Transport System (2008)

3.41 ‘Delivering a Sustainable Transport System’ was published in 2008. The document identifies five over-arching goals which include supporting national economic competitiveness and growth and reducing transport’s emissions of carbon dioxide and other greenhouse gases.

3.42 However, the biggest challenge is identified by the document as being ‘tackling climate change and growth together’. Part of the response to tackle this challenge is identified as involving enabling freight to shift to lower carbon modes of transport such as the electrified railway.

Regional Context

3.43 The decision on the 6th July 2010 to revoke the Regional Strategies outside London has been quashed by the High Court, upholding a challenge by house builder, CALA. As a result the Regional Spatial Strategy (RSS) for the East Midlands (2009) remains part of the development plan for the site. Because DIRFT lies on the border with the West Midlands and part of the DIRFT III site fall within Rugby borough, it is also relevant to consider strategic distribution policy in this area within the West Midlands RSS, which directly relates to the role of DIRFT.

East Midlands Regional Plan

3.44 The East Midlands Regional Plan (March 2009) provides a broad development strategy for the East Midlands up to 2026. Specific consideration is given to Strategic Distribution sites and paragraph 3.2.11 states:

“Policy 21 identifies those HMAs where additional land for strategic distribution sites should be brought forward with priority being given to sites which can be served by rail freight. The EMSDS indicates that rail connected sites should be large and have sufficient critical mass in terms of site size to generate sufficient demand for freight train services to/from a number of locations. The EMSDS indicates this critical mass to be around 200,000 square metres implying a site area of around 50 hectares assuming a 40% plot ratio.” [Housing Market Areas (HMAs) and East Midlands Strategic Distribution Study (EMSDS)].

Policy 21 specifically identifies the West Northamptonshire HMA as an area where there is a preference within the region for strategic distribution sites to be brought forward by local authorities working with private sector partners (such as the applicant), Sub-Regional Strategic Partnerships, the Highways Agency and Network Rail.

3.45 Policy 21 also establishes the criteria which should be applied when considering such sites. These are:


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• “good rail access with routes capable of accommodating large maritime containers, the ability to handle full length trains, available capacity and full operational flexibility;

• Good access to the highway network and to appropriate points on the trunk road network;

• A suitable configuration which allows large scale high bay warehousing, inter-modal terminal facilities, appropriate railway wagon reception facilities and parking for all goods vehicles;

• A need for such facilities due to the demand from the logistics industry;

• A location which allows 24 hour operations and which minimises environmental and community impact;

• Good access to labour; and

• The need to avoid locations near to sensitive nature conservation sites that have been designated as being of international importance, or that would directly increase traffic levels that would harm such sites.”

3.46 The criteria of Policy 21 are considered by the various documents submitted to the IPC with this application. This report addresses the fourth of this policy’s criteria, which relates to a need for such facilities.

Regional Strategy for the West Midlands

3.47 Although located in the East Midlands, DIRFT III is located on the boundary with the West Midlands. Therefore it is of relevance to consider how the need for DIRFT inter-relates with identified requirements for regional freight interchange facilities in the West Midlands.

3.48 The Regional Strategy (RS) for the West Midlands Phase One Revision (January 2008), identifies at Policy PA9 that provision should be made for Regional Logistics Sites (RLS), the purpose of which will be to provide opportunities for the concentrated development of warehousing and distribution uses. Sites should generally:

1 Be in the order of 50 hectares or more;

2 Possess good quality access to the Regional rail and highway networks and public transport links, or capable of having such links provided;

3 Be served or proposed to be served by multi-modal transport facilities and broadband IT infrastructure;

4 Have easy access to an appropriate labour supply and education and training opportunities; and

5 Aim to minimise compromise to the local environment (Policy PA9).


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3.49 The above criteria do not directly relate to the need for a development. With reference to the other documents submitted with the application however, compliance with the criteria is demonstrated by the DIRFT III proposal.

3.50 The Regional Strategy for the West Midlands Phase Two Revision was abandoned following the Government’s announcement of their intention to revoke Regional Strategies. However, the Phase Two Revision had reached an advanced stage (it had been the subject of a public examination).

3.51 The Phase Two Revision (Draft Submission Version dated December 2007), of the West Midlands RS recommended amendments to Policy PA9 Regional Logistics Sites. These amendments included the insertion of reference to a study estimating demand for RLS facilities: -

“Based on a study of the future demand for logistics within the Region it is estimated that at least 150 hectares of land could be required on RLS-type locations to serve the West Midlands in the period up to 2021”.

3.52 The recommended amendments also included a new criteria D stating that the Region should have a choice of Regional Logistics Sites available at any point in time and the priority for these sites includes DIRFT, acknowledging that there is ‘scope for the realistic expansion of existing RLS within the region and DIRFT which adjoins the regional boundary near Rugby..’.

3.53 The subsequent Panel Report (September 2009) also recognised the role of DIRFT, stating that “We also do not consider that the role of DIRFT can be ignored, notwithstanding its location in the East Midlands as it immediately abuts Rugby, one of the West Midlands SSDs. Potentially, at least 4 additional RLS or inter-modal terminals may therefore be required during the plan-period” (Paragraph 5.28). This was in the context of recognising the potential for a further 40 hectares of RLS development at Birch Coppice; 20 hectares at Hams Hall and development of land at Hortonwood, Telford, which not contribute to this future need, estimated by the Panel to be for at least 200-250 hectares in the West Midlands. Thus, it is clear that DIRFT and the further expansion of this facility has a role to play in meeting the requirement for Regional Logistics Sites to be provided in the West Midlands. DIRFT specifically identified as contributing to meeting this need.

East Midlands Strategic Distribution Study (November 2006)

3.54 The East Midlands Strategic Distribution Study was commissioned by the East Midlands Development Agency and provides part of the evidence base for the Regional Spatial Strategy for the East Midlands and therefore informed Policy 21 of the Regional Spatial Strategy for the East Midlands. It provides an understanding of the need for strategic


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rail linked distribution in the area within which the proposed DIRFT III development is located.

3.55 It is emphasised that even if in the future the RS is revoked and therefore has no development plan status, it will still be of relevance to examine the evidence base which informed the development of regional policy. This evidence base includes the East Midlands Strategic Distribution Study.

3.56 Logistics and the Regional Economy: Section 2.0 of the Study considers the contribution of logistics to the East Midlands economy. Some key findings (identified by Paragraph ES1) are as follows: -

1 Logistics is recognised as an important source of competitive advantage for business and by expansion for national and regional economies.

2 Logistics accounts for an estimated 9% of both jobs and output (GVA) in the East Midlands – a higher share than in any other region.

3 It is estimated that the broad Distribution and Transport sector, which includes logistics, in 2003 contributed £13 billion to the region’s GVA. Logistics itself contributed an estimated £5.4 billion.

4 The industry’s employment in the region since 1998 has grown faster than both total employment in the East Midlands and logistics employment nationally.

3.57 Analysis of Future Warehouse Demand: Section 3.0 of the Study analyses future demand in the East Midlands to 2026 for strategic distribution warehousing.

3.58 The analysis has estimated the proportion of the future market which can be expected to locate at rail linked sites in the region by considering two options, namely: -

• Option One: A continuation of recent market trends; or

• Option Two: The amount of new floor space needed in order to deliver the Regional Freight Strategy policy target for 30 additional freight trains per day – 1.64 million square metres up to 2026.

3.59 In order to meet the Regional Freight Strategy target of 30 additional freight trains, the consultants carrying out the study considered that 1.64 million square metres or 55% of the forecast new build greater than 25,000 sqm to 2026 will need to be located on rail linked sites (Paragraph 3.28).

3.60 Analysis of current site supply and future land requirements: Section 4.0 of the Study considers the quantity and quality of current land supply in the region, to enable the amount of additional land which will need to come forward for strategic logistics sites to be identified.


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3.61 It is concluded that for the Base Case forecast scenario, in order to meet the Regional Freight Strategy target of 30 additional freight trains: -

• Around 308 hectares of additional land at appropriate rail connected strategic logistics sites will need to be brought forward over the period to 2026; and

• Around 78 hectares of additional land at non-rail connected strategic logistics sites will need to be brought forward over the life of the next RSS (to 2026) in the identified sub-regions.

3.62 It is emphasised that with the existing supply at non-rail linked sites likely to be adequate for the early years of the next Regional Spatial Strategy, “clearly the priority should be allocating land for new rail linked strategic logistics sites so that the 30 additional trains policy target can be achieved” (Paragraph 4.13).

3.63 The Study concludes on this issue that “It is evident from the earlier sections of this report that 30 trains per day will not be breached by 2016. In order to try and achieve this during the RSS period to 2026, more prescriptive policy to promote rail freight will be required, which can then be used at a local level within the preparation of Local Development Frameworks (LDFs)” (paragraph 7.8).

3.64 It is also noted at Paragraph ES14 that: -

“Suitable sites which have the potential to be rail linked strategic logistics sites are large (at least 50 hectares), have good quality highway links and are also adjacent to a railway line with a generous gauge and available freight capacity. Such sites, by their very nature, are often greenfield. This is the policy implication of the Regional Freight Strategy in land use terms. The policy target of 30 additional trains, which was introduced in order to encourage more sustainable distribution in the region, will almost certainly require new strategic logistics sites to be located on greenfield land if the policy target is to be achieved.”

3.65 Future Location of Sites in the East Midlands: Section 5.0 of the Study develops criteria for identifying and selecting suitable strategic logistics sites. It is noted that identifying and selecting suitable sites for logistics sites is essentially a two stage process:

• Firstly identifying general broad locations which are appropriate for hosting large scale logistics activity. These broad locations should have:

i A need for logistics facilities as a result of demand from the market which cannot be met in the medium-long term by existing capacity, and is well located in relation to the origins and destinations of cargo.

ii Good quality access to the railway network, highway network and labour.


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• Secondly, identifying ‘commercially attractive’ individual sites within these broad locations. A commercially attractive logistics site must meet various criteria set out by the Study.

3.66 The above criteria are examined by the ‘Assessment of Sites for Rail Freight Development Potential’ which identifies general locations within which a need for RFI development could be met and assesses individual sites within these areas and which forms a separate report. For the purposes of this report however, it should be noted that the DIRFT III proposal meets these criteria.

3.67 Section 6.0 of the Study analysis broad sub-regional locations within the East Midlands and recommends those which are appropriate for hosting strategic logistics sites. The South West Northants sub-region (which includes the DIRFT III site) is identified as the ‘Best Sub-region’ and therefore is the sub-region which scores most highly in the assessment. South West Northants is the only sub-region to fully meet all four criteria to the highest standard. The assessment notes for South West Northants in respect of each of the four assessment criteria that: -

1 Market demand and central locations to markets: South West Northants has a central location less than 4.5 hours driving time from deep sea container ports and RDCs in other regions. Strong market demand.

2 Rail Access: South West Northants is served by the WCML and has a generous loading gauge, sufficient freight capacity and direct links to deep sea ports and other regions.

3 Road Access: A good network of motorways and dual carriageways serves the sub-region, with main highway links comprising the M1, A14, A45 and A43.

4 Access to Labour: The sub-region has good access to labour.

3.68 The study includes a focus on the opportunities for expansion of existing strategic logistics sites and developing ‘satellite’ sites which utilise rail freight capacity at nearby intermodal facilities. Such sites were anticipated to provide the supply of strategic logistic sites in the initial period of the RSS review. Paragraph 7.20 identifies that existing logistics sites that could be considered for expansion/satellite sites could include sites similar to DIRFT Phase 2 and Castle Donnington. Clearly DIRFT III is very similar indeed to DIRFT II and therefore meets this criteria.

Strategic Distribution Site Assessment Study for the Three Cities Sub-Area of the East Midlands (May 2010)

3.69 This report sets out details of work conducted on a Strategic Distribution Site Assessment Study of the Three Cities Area of the East Midlands Region. It was commissioned by the East Midlands Development Agency (emda) on behalf of a partnership comprising local authorities,


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the Highways Agency and Network Rail. The Study Area covers (or partly covers) the following Local Authority areas: -

1 Amber Valley;

2 Derby;

3 Erewash;

4 South Derbyshire;

5 North West Leicestershire;

6 Hinckley and Bosworth;

7 Blaby;

8 Harborough;

9 Oadby and Wigston;

10 Melton;

11 Charnwood;

12 Rushcliffe;

13 Nottingham;

14 Leicester;

15 Broxtowe;

16 Gedling;

17 Ashfield; (part of)

3.70 The report examines the range of key sites within the Study Area which would be suitable for the development of strategic distribution uses.

3.71 The study area of this report is made up of the Three Cities Sub-area, which comprises the Housing Market Areas of Derby, Leicester and Nottingham. The Study therefore excludes West Northamptonshire, where DIRFT III is located and which Policy 21 identifies as a key area to accommodate further strategic distribution opportunities. The study is not of direct relevance to proposals to further extend DIRFT, although the study does refer in passing to the DIRFT III proposals.

Sub-Regional Context - Northamptonshire

Northamptonshire Rail Freight Feasibility Study (July 2010)

3.72 The Northamptonshire Rail Freight Feasibility Study was jointly commissioned by West Northamptonshire Development Corporation, Network Rail and Carillion plc. The study was a condition attached by the Office of Rail Regulation to the sale of land to the south of Northampton Town Centre by Carillion (as leaseholder) and Network Rail (as freeholder).


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3.73 The study’s primary aim is to identify and assess sites along the Northampton loop line which may be suitable for development as a rail freight terminal. The report informed the evidence base of the emerging Core Strategy for West Northamptonshire.

3.74 The report did not investigate in detail proposals to expand rail facilities at DIRFT II and III. The study explains that this investigation is not required because DIRFT II already has planning permission and DIRFT III is:

“a pre-existing proposal which is being promoted by developers who will have already established the feasibility of the site for rail served uses” (section 1 and para. 4.6.7)

3.75 A site nominally identified as DIRFT 4 (southwest of DIRFT) was one of three sites assessed by the study which examines criteria relating to site location, policy, technical capacity, required works and costs. The report reviews information on each of three assessed sites (including DIRFT 4), but does not include recommendations on the appropriateness of each site or rate them.

3.76 Analysis of the comments by this study in respect of DIRFT 4 and a consideration of the extent to which this, and the other sites considered by the study could meet a need for further RFI development in the West Northamptonshire HMA is provided in the ‘Assessment of Sites for Rail Freight Development Potential’.

Northamptonshire Strategic Employment Land Assessment (November 2009)

3.77 The Northamptonshire Strategic Employment Land Assessment (SELA) was published in November 2009 (after the adoption of the RSS for the East Midlands). The study was prepared by Atkins Ltd on behalf of Northamptonshire Enterprise Ltd (NEL). NEL was formed in September 2006 and provides a unique partnership between different economic development agencies such as the Economic Development Unit of the Northamptonshire County Council, the Northamptonshire Partnership (emda’s Sub Regional Strategic Partnership, Invest Northamptonshire (a dedicated investment promotion agency) and Explore Northamptonshire (the destination marketing and management company). NEL are working with the North Northamptonshire Joint Planning Unit and West Northamptonshire Joint Planning Unit in delivering the SELA.

3.78 The Study was undertaken within the context of RSS Policy and the West Northamptonshire Growth Point and provides an independent and relatively up-to-date assessment of the Northamptonshire commercial property market, evaluation of employment forecasts for the area, evaluation of current employment land allocations and examination of potential sites for growth and recommended strategic site policy approaches. The study is therefore of relevance to a consideration of


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the need for strategic distribution development and therefore RFI development. The Northampton SELA also provides part of the evidence base for the emerging West Northamptonshire Core Strategy.

3.79 Relevant points made by the Northamptonshire SELA include: -

• The study identifies planned expansions to DIRFT (expansion site) and Eurohub as the most suitable sites (in terms of both sustainability and viability) for the provision of strategic distribution development as required by Policy 21 of the RSS (Site Ref. D1) (Para. 10.17).

• The Study notes that the DIRFT Expansion Site has planning approval for an expansion to the existing rail-linked warehouse / distribution facility. The Study also recognises that through to 2026 and beyond there will be additional pressures for development in this area which could extend partially into SELA Site D3 and more particularly Site D4 (Rugby Radio Site), which offers the potential for further rail served facilities (Para. 10.119).

• The Study is clear that DIRFT, given its unique role in the national B8 market should be distinguished from the wider economic role of Daventry district and Daventry town (page 23).

• The Study estimates the amount of distribution floorspace needed to meet sustainable growth requirements of the county, but emphasizes that DIRFT and Eurohub are “likely to perform an additional and important role contributing to national and international distribution needs. This strategic role should be distinguished from that performed by other B8 sites in the county which are more suited to serving local and sub-regional markets. Indeed, the level of demand likely to be accommodated by DIRFT and Eurohub in serving national markets will be significantly greater than local and sub-regional demand” (page 27).

• The Study emphasises that whilst theoretically forecast demand for warehousing to 2026 has already largely been met by take-up since 2001, there is an underlying need to ensure that future plans for expanding employment in the area is not constrained to the extent that a large proportion of latent market demand is ‘pushed’ away from the county. This is particularly important for key distribution locations such as DIRFT where significant, sustainable opportunities for future growth remain (Para. 9.11 and 10.119).

• The Study assesses the Rugby Radio Site (Ref D4) as having relatively few constraints (relating to infrastructure and planning only), a timeframe for delivery of 4-6 years, a 4 out 5 score for likelihood of coming forward and a high overall quality score.


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Local Context – West Northamptonshire

West Northamptonshire Employment Land Study (July 2010)

3.80 The West Northamptonshire Employment Land Study (which was commissioned by the West Northamptonshire Joint Planning Unit), provides part of the local evidence base feeding into the Joint Core Strategy. The study builds on the existing evidence (including the Northamptonshire Strategic Employment Land Assessment) and supplements it where required to ensure a sufficiently robust evidence base for West Northamptonshire’s employment land policies.

3.81 The document emphasises that West Northamptonshire is a key part of the wider Milton Keynes South Midlands Growth area and so takes a positive approach to new houses and employment opportunities (paragraph 1.3).

3.82 The Employment Land Study does not suggest local land targets for warehousing and general industrial, arguing that new supply should be market-led: -

“We don’t suggest local level land targets for warehousing and general industrial (which includes smaller scale warehousing); partly because the number of jobs proposed in the sector is quite small but also because (as we will see) there is already a healthy supply of new land completed to our proposed targets. Any new addition to the stock should be market led; we don’t presume to guesstimate today whether such space is better provided in the long term at further DIRFT expansions as opposed to sites around Northampton town.” (paragraph 6.65).

3.83 The Employment Land Study considers that although broadly enough general industrial / warehousing land is identified in West Northamptonshire to last the plan period (DIRFT II which has planning permission is included), this supply is unlikely to meet market demand, which in the past has grossly outstripped any policy derived forecasts. The study identifies market pressure for DIRFT Phase III, demonstrated through the active promotion and general support for the expansion of DIRFT (DIRFT III) onto the Rugby Radio Station site as a very visible expression of demand still driving new sites (paragraph 6.99).

3.84 The Study recognises that although there are clear national policy arguments for supporting a higher target for new warehousing, before promoting a higher target West Northamptonshire needs to consider the carrying capacity of the area (including jobs, land, infrastructure etc) to accommodate additional warehousing. The study concludes that the market demand for new warehousing is unlikely to dissipate anytime soon (paragraph 7.22 and 7.23).


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West Northamptonshire Joint Core Strategy Pre-Submission Version

3.85 The Pre-Submission West Northamptonshire Joint Core Strategy was published for consultation in February-March 2011.

3.86 Policy E4 specifically supports further development at DIRFT, stating that: -

“Further rail connected storage and distribution uses and associated rail and road infrastructure is supported in principle at DIRFT. A high standard of layout, landscaping, building design and materials will be required”.

3.87 The Pre-Submission Joint Core Strategy recognises that DIRFT is a logistics site of national significance which should be distinguished from the wider economic role of West Northamptonshire. This is reflected in paragraph 8.19 of the supporting text for Policy E4, which states that: -

“Further consolidation of the rail freight facility via expansion at DIRFT, will clearly have more than local significance and its labour force catchment area will cross the local authority areas of Daventry, Rugby and Northampton and extend into Harborough and Coventry. As such the JCS recognises that the DIRFT site has a national and regional context rather than only a local significance [¶8.19].’’

3.88 The accompanying text for Policy E4 also refers to the East Midlands Strategic Distribution Study and its target for an additional 30 freight trains per day which will require around an additional 308 hectares of rail connected strategic distribution land to be brought forward in the East Midlands region by 2026 (Paragraph 8.17). In locating strategic distribution, the Core Strategy therefore requires that priority consideration is given to sites that can be served by rail freight and operate an intermodal terminal (Paragraph 8.18).

3.89 Paragraph 8.17 of the West Northamptonshire Joint Core Strategy Pre-Submission Version also confirms that Network Rail is a close consultee on the DIRFT III proposals and is fully supportive of rail connected freight in this location.

3.90 In respect of locally-focussed warehouse development, paragraph 5.48 recognises that the area remains attractive to the warehouse industry and that indications are that it is likely to remain so for the life time of the plan. However, it is emphasised at paragraph 5.49 that “West Northamptonshire already has a large supply of warehouse development with planning consent in the pipeline. No new warehousing sites are allocated in this JCS, and any new warehousing will be accommodated on existing employment sites through the churn of employment land.” This contradicts the Employment Land Study (see above) which provides part of the evidence-base for the Joint Core Strategy. The Employment Land Study concludes that new warehousing supply should be market-led (subject to a consideration of


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the carrying capacity of the area to accommodate additional warehousing).

3.91 Eleven responses were received by the West Northamptonshire Joint Planning Unit in respect of Policy E4 of the Joint Core Strategy Pre-Submission Consultation. All respondents expressed support for the policy approach and no objections were made.

3.92 Proposed Changes to the Pre-Submission Joint Core Strategy were published for consultation in July 2012. No changes are proposed to be made the Policy E4 in advance of formal submission.

Impact of the Increased National Focus on Rail Freight

3.93 The local evidence base documents and policies referred to above establish a specific policy need for the expansion of DIRFT. Although these evidence base documents were written in the context of an environment which was already supportive in principle to the increased use of rail freight, the earlier section in this report on national policy emphasises that the shift towards rail freight at a national level has subsequently further increased (both in terms of government policy and market demand). This shift further emphasises the role which rail freight plays in delivering government objectives for a sustainable distribution system and the requirement for Rail Freight Interchanges to be delivered to enable a move from road to rail freight. Interest by private companies in rail-connected warehousing has also soared in recent years as retailers and logistic operators increasingly recognise and prioritise the sustainability and commercial benefits of rail freight transport, as many businesses set targets to reduce their carbon emissions and increase their sustainability responsibilities under their corporate responsibility agendas for example.

3.94 As a result, it is important to recognise that documents such as PPS4, PPG13, East Midlands Strategic Distribution Study and Regional Freight Strategy were written in an era when businesses were less focussed on rail freight than currently. Therefore, targets such as the Regional Freight Strategy target of an additional 30 freight trains per day (equated by the author of the study to 308 hectares of land) are likely to be an under-estimate of the amount of rail freight related development required. Therefore, targets established by evidence base documents (including the targets established by the East Midlands Strategic Distribution Study, 2006) are to some extent out-dated by an increased focus on rail freight movement and therefore represent minimum targets, not a ceiling. Where opportunities arise to secure an increase in the movement of rail freight which may result in notional targets being exceeded, the economic and social benefits of the development opportunity should be considered positively.


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Proposed Scale of the Development

Provision compared with Need identified by the East Midlands Strategic Distribution Study

3.95 The proposed development will not provide an oversupply of Strategic Logistic Sites (SLSs) in the East Midlands compared to the need identified by the East Midlands Strategic Distribution Study (and reflected in the East Midlands Regional Plan) for an additional 308 hectares of rail connected strategic distribution sites to be brought forward by 2026. A summary of the reasoning for this conclusion being reached is set out below.

3.96 Given the location of DIRFT on the border of the East and West Midlands, it is inevitable that it will serve the rail freight needs of both regions. Here it is noted that the Phase Two Revision (Draft Submission Version dated December 2007) of the West Midlands RS estimated that at least 150 hectares of land could be required on RLS-type locations to serve the West Midlands in the period up to 2021. It specifically stated that there is scope for the expansion of existing RSL within the region at DIRFT; this was in recognition of the role of DIRFT in meeting demand for RLS arising in the West Midlands.

3.97 Prologis has obtained information relating to the destination of HGVs using the DIRFT Rail Port, which identifies the percentage of the total outbound traffic from DIRFT going to the West Midlands as approximately 15%. This can be used as a proxy for understanding the influence of the West Midlands Market on usage and occupancy at DIRFT. It can therefore be assumed that DIRFT III is likely to cater for the needs of the West Midlands and that the proportion of need for DIRFT III arising from the West Midlands will be similar to the existing facility (i.e. 15%).

3.98 The proposed DIRFT facility comprises of 168 ha (net) of rail related distribution land and associated car parking, landscaping etc (i.e net of the Rail Freight Interchange and Lilbourne Meadows). If 25.9 ha (15%) of this site area is assumed to be meeting the needs of the West Midlands, then the remaining 142 ha at DIRFT III is assumed to meeting need arising from the East Midlands.

3.99 The East Midlands Strategic Distribution Study (2006), identified that there was a gross requirement for Strategic Logistic Sites of 410 hectares. The Study identified that two developments were already coming forward (Castle Donington [East Midlands Distribution Centre] and DIRFT II) which account for 102 hectares of ‘pipeline’ development. This left an additional land requirement of 308 hectares for Strategic Logistic Sites to 2026.

3.100 The 2006 Study also identified other schemes in the region which were being promoted by developers at the time the Study was written but not


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taken into account as ‘pipeline’ development when calculating the 308 ha target. These sites are located at Corby and Burnaston Cross and were identified as potentially contributing 135ha towards the 308 ha target. However, the study emphasised that both schemes had not been subject to a planning application, meaning that they had no status in planning terms and their suitability had yet to be tested through the planning process.

3.101 The following text and table provides an update on proposed rail freight interchange sites in the East Midlands, including the two sites identified by the 2006 East Midlands Strategic Distribution Study.

1 The Burnaston Cross site was refused planning permission in 2008 and a subsequent appeal was dismissed. As a result, the site is not included in the current supply of land.

2 Planning permission has been approved for the expansion of Eurohub, Corby and this site is therefore included as current supply in Table 3.1. However, since the grant of permission, development has not progressed. It is now understood that due to concerns regarding the lack of train-path capacity on the railway, the limited rail gauge and the overriding viability of providing rail connection to the site, Prologis is no longer seeking to develop the site as an RFI development and the rail connection to the site is not to be progressed. More details are provided by the Assessment of Site for Rail Freight Development Potential, which concludes that future development of the expansion site at Eurohub is very unlikely to be rail-linked.

3 An additional site at Eggington Common (adjacent to Burnaston Cross) is being promoted for development by Severn Trent, who have prepared a masterplan for the site, to assist with early consultation with key consultees. Severn Trent has confirmed that it is its intention to formally consult on proposals following the selection of a development partner. A planning application has not yet been submitted.

3.102 The table below also takes into account DIRFT III, of which it is assumed 142 ha will meet need arising from the East Midlands.

3.103 Other sites in the East Midlands which we are aware are being promoted for development as Rail Freight Interchanges comprise:

1 Donington, near East Midlands Airport

2 Land at Highgate, Northampton

3.104 More information on these sites is contained within the Assessment of Sites for Rail Freight Development Potential which accompanies this application. However, these sites are not allocated for RFI development and a planning application has not been submitted. They are therefore not considered to be ‘committed’ sites forming part of the pipeline supply.


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3.105 We are not aware of any other proposed Rail Freight Terminal developments within the East Midlands which have come forward since 2006 (when the East Midlands Strategic Distribution Study was prepared).

Table 3.1 Proposed Rail Freight Terminals in the East Midlands

Site Name Description Current Status Area

Requirement identified by Study of 308 ha

Eurohub, Corby

Expansion providing 232,260 sq.m rail-served warehousing.

Consent, April 2007 88 ha

Burnaston Cross

Warehouse facility for 23,496 sq.m on a 41 ha site.

Refused Permission in 2008 and appeal dismissed

55ha – now no longer coming forward and therefore discounted

Eggington Common

Severn Trent indicates that the site has capacity for up to 93,000 sq.m of rail-served warehousing, distribution centres and a combined heat and power plant. Given the size of the site, we consider more may be achievable.

Being promoted by Severn Trent, but no planning application submitted (therefore excluded from pipeline supply – same approach as East Midlands Strategic Distribution Study)

250ha

Daventry International Rail Freight Terminal, (DIRFT III)

Proposal for expansion to DIRFT facility

Application to be submitted to Planning Inspectorate

IPC Spring 2012

168 ha, of which 142 ha meeting East Midlands needs

Identified Supply of 230 ha (therefore 78 ha of 308 ha target remains unidentified)

Source: East Midlands Strategic Distribution Study (November 2006) and NLP Research

3.106 The table above indicates that only a small proportion of the East Midlands requirement has been identified thus far. Even taking into account the proposed 168 ha expansion at DIRFT, an undersupply of Strategic Logistics Site land of 78 ha remains. Thus, DIRFT III will not lead to an oversupply of Strategic Logistic Sites in the East Midlands and capacity will remain for additional provision in the region.

3.107 DIRFT III offers an ideal location and opportunity to meet another 168 ha of the remaining requirement and will not lead to an oversupply in the region. In fact, capacity for another Regional Logistic Site remains and could potentially come forward in the future.

3.108 Furthermore, as detailed above, national policy and market requirements for RFI development have changed significantly since the


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East Midlands Strategic Distribution Study was written in 2006. The shift towards rail freight has gained further momentum in recent years as evidenced by the recently published Strategic Rail Freight Interchange Policy Guidance. Consequently, the need for Strategic Logistic Sites in the East Midlands identified by the East Midlands Distribution Study should not be seen as a maximum ‘cap’.

Scale of Development Appropriate in Association with Land Required to Accommodate the Rail Freight Interchange

3.109 The Design and Access Statement provides a detailed explanation of how the proposals for the DIRFT III development have been formulated. This includes a demonstration of how the physical opportunities and constraints that exist on and around the site have informed the proposed design and access solutions for the project. It is noted that the proposals include the provision of a rail link from the existing terminal through DIRFT II and into the main part of the site to provide access to the new intermodal terminal.

3.110 In order to secure an efficient intermodal operation and meet industry standards, it is crucial that the DIRFT III intermodal area accepts trains without the necessity to break trains down before loading/unloading. The importance of SRFIs having the capacity to accommodate long trains is recognised by the Department for Transport’s Strategic Rail Freight Interchange Policy Guidance. When setting out the characteristics of SRFIs, this guidance identifies that SRFIs should have the capability to handle 775 metre trains with an appropriately configured on-site infrastructure and layout.

3.111 The Design and Access Statement explains that the requirement to accommodate a rail freight interchange that accepts 775m long trains has a limiting effect upon the layout of the development. Given the geometry and height profile of the site, the resultant proposals become a function of these practicalities. Rail access for DIRFT III has to be provided from the south: it is proposed that the rail link from DIRFT II will continue northward, crossing over the A5 and then descending to the relatively flat area of the intermodal terminal in the heart of the site. Here the connecting line will access eight new railway sidings. Engineering constraints which dictate the geometry required for the railway access combines with site constraints including the A5 and M1 (which contain the site), site topography and other factors result in an area of land required to accommodate the rail freight interchange of at least 168ha. The extent of land required to be released to accommodate the rail freight interchange further justifies the scale of the proposed rail 730,000 sq.m of rail served storage and distribution floorspace.


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Conclusions

3.112 This section of the report identifies a clear policy need for additional RFI provision. It also identifies need arising from planning and transport policy and its supporting evidence base for the development of further RFI capacity at DIRFT III. In particular: -

1 The Planning Act 2008 identifies RFIs as nationally significant infrastructure and seeks the delivery of RFIs through submission for DCO consent to the Planning Inspectorate, in recognition of their importance to the national economy and the need for RFI to be provided within a certain timescale, which is more likely as a result of the Inspectorate being the examining authority.

2 National Planning Policy Framework (NPPF): at the heart of NPPF is a presumption in favour of sustainable development. NPPF provides specific and clear support for rail freight interchange development. NPPF also provides significant weight to the need to support economic growth. It is emphasised that the planning system should proactively drive and support sustainable economic development to deliver the infrastructure and business/industrial units that the county needs.

3 National Policy Statement (NPS) for National Networks: The Department for Transport was proposing to publish a draft NPS for national networks in 2011, covering strategic road and rail networks and strategic rail freight interchanges. However, the publication of the draft NPS has been delayed.

1 Department for Transport Guidance: The Department for Transport has provided guidance on logistics and Rail Freight Interchange development in advance of the publication of the draft NPS. These documents are the ‘Strategic Rail Freight Interchange Policy Guidance’ (November 2011) and ‘The Logistics Growth Review – Connecting People with Goods” (November 2011). The Logistics Review identifies a clear need for Government intervention to support investment in SRFIs, including a focus on the importance of removing planning barriers to sustainable logistics development such as SRFIs. The Strategic Rail Freight Interchange Policy Guidance provides a very clear summary of the need for new and improved SRFIs, focusing on factors including forecasted rail freight growth, the increasing requirement by the logistics sector to integrate rail freight into their transport operations, the requirement for a network of SRFIs in order to facilitate a modal freight shift from road to rail (sought for both sustainability and economic reasons), and the economic growth and job creation benefits of rail freight.

2 National transport policy: Documents published by the Department of Transport and former Strategic Rail Authority recognise the role which rail freight plays in delivering a


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sustainable distribution system and emphasise the requirement for Rail Freight Interchanges to be delivered to enable a shift from road to rail freight and associated sustainability benefits.

3 Regional policy: Policy 21 of the East Midlands Regional Strategy identifies the West Northamptonshire Housing Market Area as an area which is a preference for the accommodation of further strategic distribution. Policy PA9 of the West Midlands Regional Strategy identifies that provision should be made for Regional Logistics Sites (RLS). The Draft Submission version of the West Midlands Phase Two Revision (now abandoned) stated that there is scope for the expansion of existing RLS within the region and DIRFT (which adjoins the regional boundary near Rugby). This was in recognition of the role of DIRFT in meeting demand for RLS arising in the West Midlands. The RS Revision 2 Panel identified a need for at least 200-250 hectares of additional Regional Logistics Sites in the region.

4 Regional Evidence base documents: The East Midlands Strategic Distribution Study identifies that, to meet the then estimated Regional Freight strategy target of 30 additional freight trains, 308 hectares (net) of additional land at rail connected strategic logistics sites will need to be brought forward over the period to 2026. An assessment of ‘pipeline’ strategic logistics sites in the East Midlands has identified that a small proportion of the East Midlands requirement has been identified thus far. Even taking into account of DIRFT III, an undersupply of Strategic Logistics Site land will remain. Thus, DIRFT III will not lead to an oversupply of Strategic Logistic Sites in the East Midlands and capacity will remain for additional provision in the region. The scale of development proposed is also justified by the requirement for land-take associated with the technical requirements for the geometry of the Rail Freight Interchange.

5 The East Midlands Strategic Distribution Study includes an ‘Assessment of Sites for Rail Freight Development Potential’ which identifies the South West Northants sub-region (where DIRFT III is located) as the highest scoring sub-region assessed. This high score reflects a combination of market demand, access to markets, rail connection, road access and access to labour, all of which is present in the West Northants sub area and which makes the location favourable for the provision of addition al rail freight terminal capacity.

6 Inter-regional requirements: Overall, it is clear that further development at DIRFT would play a role in meeting a proportion of the requirement for Rail Freight Terminal development identified as needed to serve both the West Midlands and East Midlands. Current/emerging Regional Policy and evidence base documents identify a requirement for 308 ha of additional land at rail


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connected strategic logistics sites in the East Midlands to 2026 and at least 200-250 ha of land to serve the West Midlands to 2021. However, it is important to recognise that as set out above, national policy and market requirements for RFI development have changed significantly since the evidence-base documents relating to regional policy were written. Although national policy has been generally supportive for some time, the shift towards rail freight has increased significantly in recent years. Consequently, these estimates of future rail-related strategic distribution needs and rail freight flow can be seen to be out of date Therefore, these figures should not be seen as maximum ‘caps’ on development because market demand for RFI development is increasing rapidly.

7 Sub-regional and local context: The Northamptonshire Strategic Employment Land Assessment (November 2009) is clear that DIRFT, given its unique role in the Warehousing/Distribution (B8) market should be distinguished from the wider economic role of Daventry district and Daventry town. The role of DIRFT as an internationally significant centre for strategic distribution and the potential for further growth at DIRFT is recognised at a local level by the emerging Local Development Framework and its evidence base. An assessment of potential rail terminal locations in Northamptonshire identified the expansion of DIRFT onto the Rugby Radio Station land as already being promoted for development by developers who have established the feasibility of the site for rail-served uses. The West Northamptonshire Joint Core Strategy Pre-Submission Version (February 2011) supports further rail connected storage and distribution uses and associated rail and road infrastructure at DIRFT (Policy E4). No objections have been received to this policy in the recent consultation and the Proposed Changes to the Joint Core Strategy of July 2012 propose no changes to Policy E4 in advance of formal submission.


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4.0 Need Established by Market Demand for

Rail-Related Warehouse Buildings

Introduction

4.1 This section outlines need established by market demand for rail-related warehouse buildings. Market requirements are explored at the national and regional level before specific demand relating to DIRFT is examined.

4.2 As the largest provider and owner of logistics buildings in the UK, Europe and globally, Prologis has a unique insight into the requirements of and changes taking place within the world distribution market. Prologis has been a strong advocate for sustainable property solutions for a number of years. This manifests itself in increasingly more sustainable, lower carbon buildings and also the use of rail to transport goods.

National Market Need

Introduction to National Market

4.3 Increasing general market demand for rail-linked warehouse buildings reflects the need for logistics warehouses which are well-located and well-linked in relation to the distribution network.

4.4 The logistics market in the UK for major warehouses has remained active throughout the recession. At the larger end of the market, where DIRFT III would be positioned, the current demand and activity is typified by retailers or third party logistics operators (3PL’s) acting for retailers. These parties are generally seeking newer, better specified and located larger units in order to improve the efficiency of their supply chain.

4.5 Prologis has recently reviewed the size range of units it has developed in the UK which shows that unit sizes have grown in the UK by 73% in the periods from 1998-2005 to 2006-2010. The average unit developed by Prologis in the UK region in the period from 2006 to 2010 is 326,000 sq ft.

4.6 Effectively having a smaller number of larger buildings requires increased focus on getting the optimum location. Location is primarily influenced by a combination of reducing the costs of moving goods, availability and cost of labour and availability and cost of suitable buildings


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Regional/Sub-Regional Market Need

4.7 The East Midlands region has traditionally been a primary focus for many National Distribution Centres (NDCs’s) and Regional Distribution Centres (RDC’s) as it satisfies the requirements set out above. It has very good connectivity to the Strategic Road Network, towns with suitable labour and sites have been made available over time to deliver the scale of buildings required by the logistics sector. This is evidenced by the analysis that DIRFT can service 98% of the British population within this 4.5 hour drive time enforced on UK drivers.

4.8 Analysis by Prologis of their buildings in the East Midlands has shown the average unit size in the period from 2006 to 2010 to be 370,000 sq ft; this has grown by 63% compared to the period of 1998 – 2005. It is notable that 3 of the 4 units that Prologis developed prior to the recession and that have remained unlet in the UK are under 150,000 sqft. The demand for larger units, particularly in the East Midlands, remains good.

4.9 As reflected by the growth of DIRFT, occupiers of RFIs are increasingly seeking rail connectivity for their buildings and planning policy prioritises rail-related distribution development over on-rail related schemes.

DIRFT Specific Market Need

Introduction

4.10 This section of the report outlines market demand for the provision of additional rail-related distribution buildings at DIRFT. Thus, it establishes the locationally specific market need for additional RFI development at DIRFT.

Take-up at DIRFT I and II

4.11 Previous take-up at DIRFT is an important indicator of demand for DIRFT III.

4.12 DIRFT I comprises approximately 350,892 sq m of rail-linked and non rail-linked, but rail-related warehouse and distribution buildings. All of the floorspace approved by the outline planning permissions for these phases of the development was occupied between 1997 (when the rail-port opened and therefore buildings on the site could be occupied) and 2005 (when the last building was taken-up). Between 1997 and 2005, annual average take up of the rail-linked and rail-served warehouse buildings at DIRFT I therefore comprised 43,862 sq m.

4.13 Outline planning permission for the expansion of DIRFT (known as DIRFT II) was granted in January 2005 for 180,741 sq.m (1,945,500 sq. ft) of rail-linked warehouse and distribution and manufacturing buildings


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(LPA ref: DA/2002/1365). Reserved Matters Approval for Zone 1 Plot A was subsequently granted in September 2008 (LPA Ref: DA/2007/1328).

4.14 However, between 2006 and 2009 there was no take-up at DIRFT, reflecting the following circumstances: -

• The sale of the land by Severn Trent Property and purchase by Prologis, meaning it was not yet available for development (2006-2007).

• Prologis had to solve a complex land ownership issue to provide the rail connectivity to DIRFT II. Overall, a two-year time period was spent securing land not under the control of Prologis for this purpose.

• The impacts of the global economic down-turn and subsequent recession between 2007-2009. In the context of the recent economic climate, Prologis has been unable to commit to commencing development on a speculative basis, but had to wait until pre-lets have been secured or there is a firm prospect of occupier interest, which has been difficult to achieve during the recession.

4.15 As a result, none of the DIRFT Expansion Site units were developed or occupied during this period.

4.16 A summary of take-up at DIRFT is provided by the table below. It shows that overall take-up across DIRFT between 1997 and 2010 has been 428,961 sqm This equates to an overall annual take-up rate between 1997 and 2010 of 32,997 sqm Excluding the years 2006-2009 during which no land was taken-up for the reasons set out above, this equates to a realistic annual take-up rate of 47,662 sq.m

Table 4.1 Take-up at DIRFT I and II

Total Floorspace Approved (sq/m)

Total Take-up (sq/m)

Time Period Annual Take-up (sq/m)

DIRFT I

350,892 350,892 1997-2005 43,862

DIRFT II

180,741 78,069 2010 78,069

Total DIRFT

531,633 428,961 1997-2010 32,997

531,633 428,961 1997-2005 & 2010 *

47,662

* Excludes 2006-2009 when there was no take-up, see text above for details

4.17 Applying an annual take-up rate of 47,662 sq.m would result in a total take-up over the remaining Development Plan period 2011-2026 (i.e. 15


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years) of 714,930 sqm Applying an annual take-up rate of 32,997 sqm would result in a total take-up over the remaining Development Plan period 2011-2026 (i.e. 15 years) of 494,966 sqm

4.18 Zone 1 Plot A of DIRFT II is fully developed and occupied by Tesco, just 102,672 sq.m of floorspace with planning permission remains available at DIRFT II. Thus, if take-up rates to date (47,662 sq/m pa) were to continue, a further 612,258 sq.m would be required to be provided at DIRFT in the period to 2026 (this is in addition to the floorspace already approved at DIRFT II). Thus, it can be seen that a proposed 714.000 sqm expansion of DIRFT onto the Rugby Radio Station Site, would roughly equate to a continuation of development rates over recent years, not taking into account the likely increase in demand demonstrated by the attraction of the logistics industry to rail-served sites and the trend for substantially larger warehouse buildings.

4.19 There are two remaining plots on DIRFT II. Zone 2 is capable of accommodating a single unit of up to 420,000 sqft. Zone 3 has Reserved Matters approval for two units of 275,000 sqft and 403,000 sqft respectively. A larger single unit of circa 775,000 sqft can be accommodated on Zone 3 and this is attracting significantly more interest than the other arrangements. Prologis currently has ongoing discussions with a number of parties for the remaining plots on DIRFT II with the expectation that a commitment on one of the plots would be made in 2011.

4.20 In summary, this analysis of past take-up rates together with an assessment of market-demand set out below demonstrates the need for further floorspace (above that already approved) to be provided at DIRFT over the emerging Plan period to 2026 at a quantum of development broadly similar to that proposed at DIRFT III.

Recent Take-up

4.21 The prelet of the 840,000 sq.ft. building to Tesco at DIRFT II Plot A, was an unprecedented transaction for late 2009. At this time there were an abundance of vacant buildings on the market which were being offered at terms that were significantly below the market average. This meant that prelet or Build to Suit deals were particularly hard to justify. The fact that Tesco wanted this building rather than a vacant unit was reinforced by their need for rail connectivity, and the unique benefits that DIRFT offers customers.

4.22 The building that has been built for Tesco at DIRFT II Plot A is directly rail connected, it is also within 1km of the private road network that serves the current rail freight terminal. As outlined below, there are significant cost benefits of warehouse buildings being within 1 km of a rail freight terminal. It is proposed that all of the existing buildings at DIRFT and those proposed for DIRFT III will be within 1 km of the private estate roads.


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4.23 With this building being directly rail connected and having its own intermodal terminal, Tesco intends to receive and dispatch up to 6 of their own rail freight trains every day running between a number of locations in the UK and Europe. This practise highlights the shift that logistics operators are seeking to make in order to deliver sustainability benefits.

Sources of Demand at DIRFT

4.24 The continued success of DIRFT is not surprising to Prologis, who believe the site has unrivalled locational benefits being on the freight loop of the West Coast Mainline and Junction 18 of the M1. Customers will continue to be attracted by these attributes as fuel prices continue to rise and emphasis and demand for sustainable solutions increases.

4.25 Prologis estimates that the strongest demand for units at DIRFT III will be for the larger unit sizes. The ability to deliver large footprint (over 250,000 sqft) buildings at a location close to the M1, M6, A14, WCML and providing great labour availability will attract major occupiers wanting to consolidate their supply chain. Prologis expects this demand to be predominately influenced by the retail sector – whether this being high street or e-tailing.

4.26 The change in unit size over time is demonstrated by an original masterplan produced by NLP for Severn Trent prior to development at DIRFT. This showed 6 units on DIRFT Central (part of DIRFT I) which now houses 1 unit of 750,000 sqft for Tesco.

Indicators of Demand

4.27 Prologis continues to experience demand from customers for DIRFT. As explained above, any demand needs to be put in context of the terms available on empty standing buildings. As such, some customers would prefer to occupy an existing building which will not need to be constructed and available on more advantageous terms.

4.28 Currently the strongest demand at DIRFT is for customers either wanting large footprint buildings (over 400,000 sqft) and/or wanting rail connectivity. Prologis expects the interest for smaller units (over 200,000 sqft) to increase as the number of available empty properties in that size range decreases. As sustainability measures such as the Carbon Reduction Commitment begin to take more effect, Prologis expects an increasing number of customers to follow Tesco and M&S. who are both focussing supply chain movements on rail for these reasons.


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Conclusions

4.29 This chapter has identified strong demand for further rail-related warehouse buildings at DIRFT as a result of general trends at a national and regional level together with the unique characteristics of the DIRFT site.

4.30 It has been identified that DIRFT III would serve the expanding market for larger, well specified and well located units sought by occupiers looking to improve the efficiency of their supply chain. The site has clear locational benefits, being close to the West Coast Mainline and Junction 18 of the M1.

4.31 Previous take-up at DIRFT is an important indicator of demand for DIRFT III. An analysis of historic take-up rates at DIRFT I and DIRFT II identifies that a proposed 714.000 sqm expansion of DIRFT onto the Rugby Radio Station Site, would roughly equate to a continuation of development rates over recent years, not taking into account the likely to increase in demand demonstrated by the attraction of the logistics industry to rail-served sites and the trend for substantially larger warehouse buildings.

4.32 The demand for further development at DIRFT is also reflected by the continuing demand which Prologis is continuing to experience for the development. The strongest demand for DIRFT is from customers either wanting large footprint buildings (over 400,000 sqft) and/or wanting rail connectivity. In terms of recent take-up, it is noted that the prelet of the 840,000 sq.ft building to Tesco at DIRFT II, Plot A was an unprecedented transaction for late 2009. The fact that Tesco wanted this building rather than a vacant unit reinforced their need for rail connectivity, and the unique benefits that DIRFT offers customers.


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5.0 Need Established by Rail Freight Demand

Introduction

5.1 This section of the report outlines drivers of need for Regional Freight Interchanges. This need is considered in terms of: -

1 An exploration of the ‘case for’ Rail Freight Interchanges. This focuses on why the development of RFI’s is increasingly being encouraged by national government and sought by companies.

2 Analysis of sources of demand for rail freight and general trends at a national, regional and DIRFT specific level.

3 National forecast of take-up for rail freight.

4 Specific forecast of take-up/demand for the further rail freight facilities proposed (at DIRFT III).

Key Definitions

5.2 Rail freight can broadly be divided into bulk and non-bulk services. Bulk services include the movement of commodities such as coal or petroleum. Non-bulk services cover most other types of commodities, including manufactured goods and retail goods. DIRFT III is intended to serve the non-bulk market.

5.3 There are two ways of moving non-bulk commodities by rail:

• Conventional Wagon Services: using various types of wagons, including vans with sliding doors. Products need to be loaded or unloaded separately, often by using fork lift trucks to lift pallets to or from the wagons.

• Intermodal: for intermodal the goods are carried in large boxes on flat wagons. The boxes are transferred to and from the wagons using cranes or large mobile lifting machines such as reach stackers.

5.4 DIRFT III is planned to accommodate both conventional wagon services and intermodal services. The conventional wagon services will be loaded and unloaded at rail connected warehouses on the site, while the intermodal services will generally be handled at the intermodal terminal.

5.5 There are various types of intermodal unit. All types are commonly referred to as “containers”.

• ISO Containers: are primarily designed to be carried efficiently on ships. They have standard dimensions and are typically 20’, 40’ or 45’ long.


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• Swap Bodies: these are more flexible containers commonly used in Europe for multimodal transport by road and rail. Their dimensions are more variable but are broadly similar in scale to ISO containers.

5.6 A single loaded container, whether 20’ long or longer, is broadly equivalent to a Heavy Goods Vehicle (HGV) load. However, two empty 20’ containers can be carried on one HGV. Generally most containers are 40’ long or more. 20’ or 30’ containers are mainly used to carry heavy or bulk commodities, a sector of the market which is declining relative to lighter manufactured goods.

5.7 There are three potential groups of non-bulk rail freight services that will use DIRFT III:

• Deep Sea: Trains of ISO containers to and from container ports (actually a proportion of this container traffic is carried on short sea and feeder routes, but “Deep Sea” is a commonly used description)

• Domestic: Trains of containers or conventional wagons to and from other terminals inland in Great Britain

• Channel Tunnel: Trains of containers or conventional wagons to or from destinations in continental Europe via the Channel Tunnel.

5.8 These three markets have distinctive characteristics and so need to be considered separately in terms of forecasting rail volumes.

Factors Influencing Demand for Rail Freight Interchanges

5.9 The transfer of freight from road to rail enables an efficient, reliable, cost effective and sustainable distribution of goods, which in turns brings benefits for the environment, operators and consumers. This section focuses on the central components influencing demand for Rail Freight Interchanges, which include the sustainability, economic/cost savings and operational benefits resulting from and driving a shift towards rail freight distribution.

5.10 The economic, sustainability and operational benefits of transferring freight from road to rail are recognised in planning and transport policy and have been explored in depth by previous RFI applications/appeals at other locations. There is a broad consensus on the positive attributes of RFI development.

5.11 Therefore, the general benefits of transferring freight from road to rail are not repeated in detail here, although a summary of some of the key benefits is provided below. It is emphasised that the benefits of transferring freight from road to rail are reflected in: -


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• Long–established Government Policy promoting rail-freight (as summarised by Section 4.0 above)

• The impact which Carbon Reduction Commitments by UK companies is having on the take up of sustainable initiatives, including an active commitment to using rail-freight.

Sustainability Benefits

5.12 Sustainability benefits are a key reason for government support for the transfer of freight from road to rail. The sustainability benefits are also one of the components driving market demand for freight transport, because many businesses set targets to reduce their carbon emissions and increase their sustainability credentials under their corporate responsibility agenda etc.

5.13 The creation of rail served buildings can potentially make a much bigger impact than the carbon emissions reductions that can be achieved through lower operational and embodied carbon from modern warehouse buildings. In the same way that achieving modal shift by employees moving from private to public transport reduces emissions, moving goods via rail (which is a recognised lower carbon solution), will also have significant benefits. Logistics parks that are rail connected will therefore provide the greatest opportunity to capture the full environmental benefit of these carbon emission reductions.

5.14 Energy efficiency is directly related to carbon dioxide emissions, rail being significantly more energy efficient than other modes with the exception of shipping. According to the Case for Rail by Railfuture (2004), per tonne carried, road transport requires between 4 to 7 times more energy than rail.

5.15 The sustainability benefits of rail freight are summarised by the Strategic Rail Authority’s Freight Interchange Policy, which states at paragraph 5.9-5.10 that: -

“Rail freight can be significantly more effective in supporting sustainability principles by virtue of its better energy-efficiency, reduced emissions and its clear ability to reduce road congestion and capacity problems.

Rail freight has a material advantage over road freight in terms of carbon dioxide emissions, which impact on climate change. The average CO2 emission per tonne kilometre of rail freight is 23g whereas, for HGVs, it is 178g”.

5.16 It is also noted that whilst HGVs rely on diesel and the technology to deliver viable electric-operated HGVs being some way off, trains can be operated by electricity, which in turn can be generated by a variety of sustainable and renewable means, not just by the burning of fossil fuels


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5.17 Replacing HGV journeys with freight trains also reduces congestion on the road. According to Network Rail, an average freight train can remove 50 long distance HGV journeys from the roads (Source: Network Rail, Value of Freight, July 2010).

Economic and Operational Benefits

5.18 For rail freight to provide a competitive alternative to moving goods by road, it must satisfy customer requirements in respect of cost, reliability, flexibility, journey time and a range of other criteria. Information on these factors is provided below.

5.19 Road haulage is currently the dominant means of transporting goods in the UK. However, as a result of various factors (such as rising fuel prices, congestion and the European Drive Time Directive), the relative cost of transporting goods by road has been increasing and is expected to continue to increase. The cost of transporting goods by road is expected to further increase over the long-term due to initiatives such as distance based road charging.

5.20 Meanwhile, rail freight is becoming increasingly cost effective relative to road freight for certain logistics requirements. Rail freight also enables services with good reliability including guaranteed delivery times. As a result, distributors are increasingly seeking rail-linked warehousing, with rail-linkage being a key component of their search criteria.

5.21 The recently opened Tesco unit on DIRFT II has demonstrated customer demand for the use of rail to move freight with Tesco wanting to move up to 6 trains a day to and from the new intermodal facility that has been constructed for them as part of the new unit. Other occupiers are actively considering rail freight. M&S will soon take occupation of a new 930,000 sqft unit at East Midlands Distribution Centre with its own dedicated rail freight terminal. As part of M&S Plan A commitment they are actively pursuing initiatives that reduce their CO2 usage.

5.22 The Tesco unit at DIRFT II has prompted interest from a number of other occupiers looking to use rail freight, both in the form of direct enquiries to Prologis, but also through increased focus and attendance at industry events, for example recent workshops that the Rail Freight Group have put on for parties interested in rail freight were predominately attended by potential users.

5.23 One of the factors which enables rail freight to be competitive is the close proximity of customers to a rail terminal, for this reduces transport costs and therefore enhances the viability and competitive attraction of rail over road. Thus, the development of large warehousing in close proximity to the rail terminal facilities is an important economic consideration. The benefits of being within 1km include that unlicensed “tug” vehicles can haul containers received at the terminal. These vehicles are significantly cheaper to run than normal fully road worthy


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HGV’s. Consequently, there are economies of being within 1 km of a private estate road servicing a rail freight terminal.

5.24 The cost of transferring goods between the intermodal terminal and a warehouse within the DIRFT estate will be significantly lower than even a warehouse located a few kilometres away. There are a number of reasons for this, including:

• The vehicles used will avoid use of the public highway (or at least will use highways for less than 1km) and will therefore be able to reduce tax costs for fuel and HGV road fund licence.

• The vehicles will be able to operate on a shuttle basis with very high efficiency, avoiding delays on the road network

• The vehicles will be able to use an internal Terminal Management System, which will call vehicles from the warehouse when the crane is available, eliminating queuing times at the terminal.

5.25 As more customers locate on rail freight interchanges, the opportunities for customers at DIRFT to use rail will increase significantly, because a wider range of customers can be served with the benefit of very low collection and delivery costs at BOTH ends of the journey.

5.26 It is also noted that during recent periods of bad weather, snow significantly reduced the reliability of road freight while rail freight was much less affected.

Market Demand and Trends in Rail Freight Use

National Demand for Rail Freight

Deep Sea

5.27 Container volumes through UK ports have consistently grown for many decades, up to the 2008-2010 recession. This growth was driven by:

• Growth in GDP

• Growth in world trade and the proportion of GDP which is involved in trade, particularly to and from the Far East

• Reduction in the tonnage of goods per container (as manufactured goods replace heavier basic commodities, a tonne of goods takes more volume and so more containers are needed).

5.28 The chart below illustrates the growth of this market over the last two decades.


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Figure 5.1 Container volumes through UK ports. Source: DfT Maritime Statistics 2009

5.29 The downturn in trade following the recent recession is clear. It is worth noting that container volumes through DIRFT were only slightly impacted by the recession. UK container trade continues to be dominated by trade through the ports of Felixstowe and Southampton, although there is a trend for some shippers to use feeder services to ports further north if this is convenient for their customer base. The table below illustrates the importance of the major ports.

Table 5.1 Volume of containers handled at major UK ports. source: DfT Maritime Statistics 2009

5.30 Since the 1970s rail has carried a large share of containers to and from the main ports, all of which have rail terminals for this purpose. The number of containers carried by rail has also increased consistently over time.

5.31 Data showing the number of rail containers transported is not available over this period, however the rail industry does produce data on tonne kilometres of container traffic moved (which therefore records both

Column1 Containers (Thousands) Percentage of All Ports

Felixstowe 1,857 42%

Southampton 840 19%

London 368 8%

Liverpool 358 8%

Medway 255 6%

Forth 139 3%

Belfast 125 3%

Tees and Hartlepool 102 2%

Hull 93 2%

Grimsby & Immingham 76 2%

Bristol 46 1%

Clyde 40 1%


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volume and any changes in average distance travelled). This data is illustrated below.

Figure 5.2 Intermodal Freight Moved By Rail. Source: National Rail Trends 2009-10, Office of Rail Regulation

0

1

2

3

4

5

6

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

Bil

lio

n N

et

To

nn

e K

ilo

me

tre

s

5.32 While data on the number of containers lifted by rail is not available, a study by Dr. Allan Woodburn in 20083 produced a record of the number of deep sea container trains serving each region. This shows interesting variations between regions, so that while the total number of trains has grown by 74% between 1997 and 2006, the number of trains serving the Midlands grew by a remarkable 420% from 15 trains per week in 1997 to 78 trains per week in 2006. (This growth has since continued, with 90 deep sea trains per week serving the Midlands in 2010, at least 15 of which serve DIRFT).

3 Woodburn, Allan G. (2008) Container train operations between ports and their

hinterlands: a UK case study. In: United Nations Economic Commission for Europe

(UNECE) Conference: Hinterland Connections of Seaports, 17 - 18 Sep 2008, Piraeus,

Greece


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Table 5.2 Deep Sea Container - Trains Per Week Jan Each Year

Source: Container Train Operations Between Ports And Their Hinterlands: A Uk Case Study, Dr. Allan

Woodburn, 2008

5.33 The causes of this changed pattern of services are complex and include increased competition from feeder shipping services to the Scottish market and the introduction of rail subsidies targeting medium distance container traffic. (Container movements to DIRFT from Felixstowe or Southampton receive a subsidy, but containers between DIRFT and Scotland do not).

5.34 However, a major factor must also be the development of new rail freight interchanges in the Midlands and the concentration of major distribution warehouses at these terminals. Such terminals include Hams Hall, Birch Coppice, and DIRFT.

Domestic

5.35 The movement of trains of containers between inland rail terminals has grown dramatically in recent years. Previous attempts to develop this business, chiefly by Freightliner in the 1980s, failed because the collection and delivery costs made it hard for rail to compete on price and this lack of competitiveness made it difficult to fill whole trains between any two destinations.

5.36 An alternative approach developed during the 1980s was the Speedlink wagonload network. Rather than containers, this consisted of a series of services which allowed conventional wagons to be transported between any two locations across the country overnight. Wagons from various customers were grouped together at local marshalling yards. Again, most goods had to be transferred to and from the railheads by road, and the network became uneconomic.

5.37 The development of rail freight interchanges which were primarily designed to serve anticipated traffic through the Channel Tunnel during the 1990s saw the introduction of a limited number of domestic intermodal trains, often carrying specialised products such as bulk chemicals.

5.38 There have been two catalysts for the recent development of domestic intermodal services:


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• The development of Strategic Rail Freight Interchanges, notably DIRFT, with major supermarket distribution centres locating at these facilities

• Pressure on and from major retailers to reduce carbon emissions and improve supply chain efficiency

5.39 Supply chain changes have been particularly influential. In the past, retailers generally took responsibility for deliveries from their distribution centres to their stores and supermarkets. Their suppliers were responsible for delivering goods to the distribution centres. As a result, the longer distance movements into the distribution centres were highly fragmented, with large numbers of suppliers having to make deliveries to each distribution centre. This fragmented structure offered few opportunities for consolidation onto rail services.

5.40 Over the last five to ten years, supermarkets have tended to take responsibility for inwards movement of goods to their distribution centres as well as outwards movement. As well as concentrating control, this has lead to an important change in supply chain patterns. A vehicle delivering goods from the distribution centre to a store can more easily be used to collect goods from a supplier and carry these back to the distribution centre. This reduces the number of empty movements. This has resulted in goods being delivered to the nearest distribution centre where the retailer can consolidate loads to be delivered onwards to other distribution centres.

5.41 Rail is now involved in several elements of the supply chains for major retailers:

• Some movements from distribution centres to stores via intermodal services – mainly for difficult to access locations such as the Scottish Highlands

• Movements of imported goods from deep sea ports or the continent to a UK national distribution centre

• Movement of goods between distribution centres

5.42 It is the third category which has grown most rapidly, although volume was initially limited by the relative lack of rail-accessible distribution centres. The main flows are on the Midlands to Scotland route, dominated by trade to and from DIRFT.

5.43 While the pressure may have been to reduce carbon emissions, it would not be true to say that this has been achieved at the expense of higher cost or lower service quality for the retailers and shippers. Several retailers and logistics companies have reported that prices by rail are very competitive and that reliability generally exceeds that obtainable by road transport.

5.44 The present domestic service from DIRFT on a typical week day is as follows:


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• 02:41 to Barking (shared with deep Sea to Tilbury)

• 12:17 to Mossend, Scotland

• 18:37 to Mossend, Scotland

• 18:55 to Coatbridge, Scotland

• 21:56 to Grangemouth

5.45 All of these domestic trains are hauled by freight operator DRS. The Mossend and Grangemouth trains are operated on behalf of WH Malcolm, the Coatbridge train is operated on behalf of JG Russell. Russell and Malcolm are major Scottish distribution companies, traditionally focussed on road haulage, who have made strategic decisions to enter the rail freight business. Their trains carry a wide variety of general goods, particularly whisky southbound. A large proportion of the Malcolm train consists of containers for ASDA who have a large presence at Magna Park, Lutterworth some 15kms north of DIRFT.

5.46 Until recently, there was an 06:15 Rugby to Mossend service operated by Stobart Rail which carries goods for Tesco. This has now been transferred to DIRFT II. A large percentage of goods on this train is transferred to the Tesco distribution centres at DIRFT.

5.47 As an example of how these services operate, Asda, Britain’s second largest supermarket chain, has been using rail in partnership with the Malcolm Group and Direct Rail Services since 2001 for what is now a daily service which connects the Asda National Distribution centre at Magna Park Lutterworth to its RDC in Grangemouth a distance of 550 kilometres. Magna Park is 15 kms away from the Daventry International Rail Freight Terminal and the Grangemouth RDC is about 600 metres from the WH Malcolm’s terminal.

5.48 The annual road travel savings, allowing for movements from the rail terminals to the distribution centres is 9,718,800 vehicle kms and a savings of 6,376 tonnes CO2 emissions. W H Malcolms was able to find custom to justify the southbound deliveries as Asda was not needing a full train on this return sector.

5.49 Pepsi, Britvic, Robinsons, Tango, J2O & Fruit Shoot produced from sites in East Anglia, Yorks and Humber are delivered by road to DIRFT for onward travel by W H Malcolms to Grangemouth and Mossend in Scotland. Quakers oats have recently started using rail from Scotland to Lutterworth.

5.50 In 2009, Wincanton and Malcolm Logistics announced a joint-venture domestic rail freight operation for soft drinks shipper Britvic. A rail service replaced 50 daily road journeys and moves around 1m bottles of drinks from the Midlands to Scotland. Product from sites in Norwich, Beckton, Rugby, Widford, Leeds and Huddersfield are also consolidated at DIRFT.


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5.51 In December 2010 Marks and Spencer joined Asda and Tesco by introducing new services from DIRFT. M&S will switch more than 300,000 general merchandise (clothing and home) products a week from road to rail distribution, which it said would cut 1.2 million road km and save over 800 tonnes of CO2 a year. It is the first time M&S will distribute hanging clothing (clothing not distributed in boxes) by rail. The bespoke service was developed by M&S and DHL, which allows hanging clothing to be transported safely and efficiently in containers, 25 of which will be transported by DHL on M&S’ behalf each week.

5.52 The involvement of Tesco, Asda, Marks and Spencer, Wincanton, DHL, Stobart, Malcolm, and Russell in domestic rail freight services from DIRFT provides a roll call of the major players in the UK logistics industry, all of which have taken major steps to increase their use of rail over the past two or three years.

5.53 It is difficult to obtain data on the volumes of goods involved. However, assuming that each train can carry 26 units but on average only carries 80% of this potential, an average of 15T per load would mean that just under 900,000 Tonnes of goods would be travelling by rail between the Daventry area and Scotland. DfT Road Freight Statistics suggest that less than 4 million tonnes per annum of goods travel between the Midlands and Scotland by road. This would suggest that rail has a market share of around 20% on this corridor.

5.54 Tesco has located a number of its regional distribution centres to locations near to rail terminals, and has publically suggested that their use of rail at DIRFT could increase to 6 trains per day each way.

Channel Tunnel

5.55 The volume of rail freight movements through the Channel Tunnel has been more varied. The logistics theory is clear: rail should be able to compete strongly for freight movements over long distances. As a result, before the Channel Tunnel opened British Rail geared up to handle a forecast 6-10 million tonnes of rail freight traffic per annum, or up to 35 trains per day each way through the tunnel.

5.56 However, train volumes through the Channel Tunnel never rose above 12-13 daily trains each way which was achieved early on in 1997/8. In 2001 to 2003 Channel Tunnel rail services were seriously impacted by the numbers of immigrants illegally using trains to access the UK. Among other things, the level of fines imposed began to match the revenue from the services. As a result the number of trains fell to nearly zero.

5.57 Demand picked back up to reach 8 trains per weekday, but protracted negotiations on the charge to use the Channel Tunnel saw this fall to 3-4 trains per day in early 2008. Once the usage charge issue was resolved


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services began to pick up again, but are still only at 5 or 6 trains per day in 2010.

5.58 While the big issues of illegal immigrants and the Channel Tunnel usage charge had major impacts, these arguably obscured other structural issues with the rail freight service, including the complexity of arranging international train services and the increasing competitiveness of road haulage based international freight transport. The 2009/10 recession has also had a major impact on volumes.

5.59 However, during 2008 a series of important changes occurred:

• Financial restructuring of Eurotunnel: new corporate focus on growing commercial revenue from cross-Channel rail freight

• New ‘operator-neutral’ Eurotunnel rail freight access regime from October 2007. More competitive and transparent structure for many flows; allows choice of operator or self-supply of services.

• Implementation of basic EU Rail Liberalisation legislation in key EU Member States; freight users have choice of train operators and gain through real competition on price and service performance (e.g. EWS in France and Spain; SNCF in Belgium and UK soon; Veolia in France and Germany)

5.60 It has taken a little time for the impacts of these changes to be felt. But there were several important developments during 2010 that provide evidence that the changes will have a significant impact on rail freight volumes through the Channel Tunnel. These included:

• The development of new international rail freight train operators either through amalgamation of national operators or through the development on new “open access” rail freight train operators.

• Eurotunnel’s creation of its own rail freight train operator, Europorte, which subsequently purchased UK freight operator GB Railfreight.

• In 2009 Stobart introduced a radical new intermodal service linking Valencia to Dagenham. Key features include the use of refrigerated containers (for fresh food importers), the use of a single operator throughout (DB Schenker and its partner companies), and a fast journey time of only 53 hours.

• On 11th January 2011 DFDS signed a contract with Europorte to haul a new service between DIRFT and Novarro in Italy, initially 3 times per week but this has now increased to 5 trains per week. Using GBRF trains in the UK and Europorte trains on the continent makes this service a good example of new style international freight services.

5.61 It is anticipated that retailers will use the new rail freight services to bring products direct to National Distribution Centres (NDCs) by rail where these are located at or near rail freight interchanges.


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Rail Freight Demand for DIRFT

5.62 Previous sections have demonstrated a national and regional need for enhanced access to intermodal freight facilities and a large volume of high quality distribution space. It has also been demonstrated that the DIRFT III site is an attractive location for a variety of reasons including its excellent access to the motorway network and existing access to the rail network.

5.63 This section considers the potential for occupiers of DIRFT and other locations in the area to make use of the proposed rail freight facilities proposed at DIRFT III. This is achieved by examining the current rail freight services using DIRFT, looking at the key trends in the relevant rail sectors, considering national and regional forecasts for rail freight, and then developing a forecast for rail movements through DIRFT.

5.64 DIRFT is a successful Rail Port carrying high volumes of rail traffic. It is notable that all of the trains currently serving DIRFT link with either a deep sea port or a terminal in Scotland. Rail can compete over shorter distances for deep sea ports because the ports all contain rail terminals – effectively there is no cost for road transfer at the port end of the journey. This means that shippers can afford to pay for a road transfer to or from DIRFT and still have a competitive price compared to road haulage throughout.

Sources of Demand

5.65 Uniquely among proposals for Rail Freight Interchanges of this scale, DIRFT III builds upon an existing successful freight interchange on the same site. This is known as DIRFT – but for the sake of clarity is referred to as DIRFT I in this chapter.

5.66 The DIRFT I Rail Port was opened in 1997, the most notable example of the new generation of freight interchanges designed primarily to serve Channel Tunnel rail freight business. It included an intermodal rail terminal and two rail connected warehouses and was part of a development of over 4 million square feet of distribution space.

5.67 Ever since opening, demand for intermodal services through DIRFT I has grown consistently, except in 2010 when volumes were reduced by the transfer of one train per day from DIRFT I to a small intermodal facility at Rugby, which has since transferred to DIRFT. Although originally conceived as a Channel Tunnel terminal, volumes of Channel Tunnel have been inconsistent since the opening of the Rail Port in 1997. However, there are now form grounds for believing that Channel Tunnel freight volumes will increase in future.

5.68 Figure 6.3 below illustrates the growth in the number of container lifts at DIRFT I. The graph includes lifts of containers onto trains, off trains, or into store. To provide context, the 106,000 lifts in 2010 included 71,531


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lifts onto or off trains. The remaining lifts would have been movements to and from the container store.

Figure 5.3 DIRFT Throughput (Source: Malcolm Logistics)

5.69 In addition to containers, DIRFT I handles conventional wagon trains which go directly to rail connected warehouses on the site. In 2010/11 there is a conventional wagon service which operates 4 times per week from France, mainly carrying water, with empty pallets being carried in the return direction. Each train of water has, on average, 21 wagons each of which carries 83 Tonnes of water. Assuming that a lorry or container can carry a full payload of 26 Tonnes, this train therefore carries the equivalent of 67 fully laden lorries or 40’ containers.

5.70 If 20% of these return loaded with empty pallets, this train alone accounts for the equivalent of 16,700 container movements per annum, an additional 23% above the 2010 container volume of 71,531 lifts.

5.71 The present pattern of train services to and from DIRFT is illustrated below. Each line represents a pair of trains (i.e. one outbound and one inbound train).

5.72 Of the two trains destined for East London one is a train of containers to Tilbury while the other is partly containers for Tilbury and partly containers for the local domestic market, handled at Barking.

5.73 One of the two trains which travel via the Channel Tunnel is the conventional van train carrying water. The other train is an intermodal service to Italy which started in January 2011.

5.74 In addition to the four trains per day between DIRFT and Scotland in early 2011, a fifth daily intermodal train linked Rugby with Scotland. This train carried containers for Tesco, most of which start or finish their


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journey from one of the Tesco distribution centres on DIRFT and it has now transferred to a new facility on DIRFT II.

5.75 While operators try to run full trains of containers, variations in demand mean that often there are empty spaces on container trains. Assuming that the Tesco train is 80% loaded with containers in both directions, then it is carrying an estimated 10,400 movements per year. Therefore the current volume of rail freight using DIRFT I or Rugby is as follows:

• 71,531 intermodal movements through DIRFT I (inbound plus outbound)

• 16,733 (equivalent) lorry movements via the Channel Tunnel water train (mainly inbound but 20% outbound carrying empty pallets)

• 10,400 intermodal movements using the Rugby terminal (inbound plus outbound)

• A total of 98,664 movements per annum (inbound plus outbound).

What Is the Catchment Area of DIRFT I?

5.76 A survey of HGVs entering and leaving the DIRFT rail facility over a week in February 2010 found that 31% of vehicles were starting from or destined for other locations within the DIRFT estate. This illustrates a strong link between businesses on the estate and the rail facility.


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Table 5.3 Results of February 2010 Interview Survey. The survey identified the origin of lorries entering the intermodal terminal or the destination of lorries leaving

5.77 Furthermore, all of the water train movements are transferred direct to and from a facility in DIRFT, while an estimated 70% of the Tesco train’s containers are to or from locations within DIRFT.

5.78 As illustrated in the pie chart below (covering outbound lorries as an example), a large proportion of the remaining HGVs in the survey were travelling the relatively short distances to or from either Magna Park or Northampton and Milton Keynes.

Figure 5.4 Summary of destinations of lorries leaving DIRFT. February 2010 Survey

5.79 The survey illustrates the role that DIRFT plays in serving the UK cluster of large National Distribution Centres around Northamptonshire, DIRFT itself, and Magna Park.


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Summary of Rail Freight Demand for DIRFT

5.80 In summary, DIRFT I is playing a central role in each of the three key service sectors that DIRFT III will be targeting:

• DIRFT I is a major location for handling deep sea containers to and from the Midlands

• DIRFT I is the central player in the domestic intermodal market

• DIRFT I is the chosen terminal for one of the new generation of international intermodal services via the Channel Tunnel.

5.81 The key drivers of demand in these three sectors has been:

• Deep Sea: growth in trade and container volumes; development of distribution centres at well located inland freight interchanges

• Domestic: Changes in supply chain management; green agenda; development of distribution centres at Rail Freight Interchanges

• Channel Tunnel: A degree of suppressed demand due to historic problems; reduced prices and open access for rail haulage; the development of distribution centres at Rail Freight Interchanges.

Forecast Demand for Freight Transport

Introduction

5.82 Before considering specific demand forecasts for rail, it is worthwhile looking at the limited range of forecasts available for freight as a whole. Good quality forecasts are available for international traffic, whereas domestic freight forecasts are more problematic as road traffic forecasts already take into account forecast growth of rail freight.

5.83 In line with the trends summarised in section 5.81, Deep Sea volumes are forecast to grow strongly for the foreseeable future. In July 2007, DfT issued an Update of UK Port Demand Forecasts to 2030, which predicted growth in the number of containers of 3.8% per annum from 2005 to 2030. However, from 2010 to 2030 the growth rate was forecast to be 3.3% per annum. In fact 2009 volumes were little higher than 2005 volumes due to the impact of the global recession. Nonetheless, annual growth of between 3.3% and 3.8% can be expected in the long term as global trade growth is expected to return to trend levels.

5.84 The same forecasts predicted RoRo freight volume to grow by 2.8% throughout the period 2005 to 2030. This figure is relevant for Channel Tunnel rail freight demand because the Channel Tunnel rail freight business competes for goods which would otherwise tend to move across the Channel on RoRo ferries.


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National Forecast Demand for Freight Transport by Rail

5.85 The rail industry has worked closely with the DfT and the Freight Transport Association (FTA) to produce a set of agreed demand forecasts covering 2015 and 2030. These forecasts were produced in 2009 as an update to similar 2007 forecasts which only covered the period to 2015.

5.86 The forecasting approach was a combination of “bottom up” forecasts based on known changes in demand (such as new port capacity or the closure of sources of freight), plus “top down” forecasts based on economic changes modelled through the GB Freight Model (GBFM).

5.87 The 2015 forecasts have been used to inform Network Rail’s Freight Route Utilisation Strategy (Freight RUS), while the subsequent update has been used to inform the DfT’s Delivering a Sustainable Transport System (DaSTS) and Strategic Freight Network strategies.

5.88 A key factor underlining the strong forecast of growth for rail freight is an assumption in the FTA / Rail Industry forecasts for rail freight to 2030 that “active plans for developers to build 9m m² of rail connected warehouses nationally” by 2030 are delivered, accounting for some 40% of total new build warehousing.

5.89 DIRFT is well placed to benefit from this. Currently most domestic traffic to and from DIRFT is to Scotland, because rail is competitive over this long distance despite the need to deliver goods from the terminals in Scotland to off-site supermarket distribution centres. It is expected that rail will also be able to capture a high share of movements to other regions once a network of rail freight interchanges has become established.

5.90 The headline forecasts are shown in the table below:

Table 5.4 Rail Forecasts - MDS Transmodal 2009 for RFG / FTA

2006 2015 2030

Rail tonnes (millions)* 123.7 130.3 197.8

Rail tonne km (billions) 23.5 31 50.4

Domestic Non bulk tonnes

(millions) 2.2 8.9 31.9

Port Non bulk tonnes (millions) 12.8 25 55.9

Trains (‘000s) 409 434 634

5.91 As the table shows, an increasing share of the growing rail volume is forecast to be domestic non-bulk or port non-bulk.

5.92 These forecasts have been broken down by origin and destination regions, and the results for the East Midlands and West Midlands are illustrated below.


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Table 5.5 Rail Industry Forecasts - Million Tonnes

5.93 These figures imply a growing share of the market for rail non bulk services to and from the Midlands. Rail volumes are forecast to grow faster than the volume of freight as a whole.

5.94 The same set of forecasts predicts a resurgence in Channel Tunnel rail freight, with 9.9 million tonnes of imports per annum and 1.6 million tonnes of exports per annum by 2030, growth rates of 11% and 7% per annum respectively.

DIRFT III Forecasts

5.95 In 2010 the DIRFT Rail Port handled 71,531 containers to or from rail. In addition the equivalent of 16,733 units was handled in conventional wagons and an estimated 10,400 units were handled at Rugby but mainly destined for DIRFT (and has since transferred to DIRFT in any event). Therefore, the total rail freight volume associated with DIRFT in 2010 was the equivalent of 98,664 containers or units. This includes movements of containers in both directions, i.e. inbound plus outbound.

5.96 The table below breaks down the rail volumes estimated to have been handled through the DIRFT Rail Port in 2010 according to the various types of train using DIRFT I and then adds estimated volume using the “water” and “Rugby” trains.

5.97 The right hand side of the table provides an estimate of how much of the rail volume is “internal”, i.e. to or from locations within DIRFT. This is based on the traffic survey plus a direct allocation of the water traffic, and an estimated allocation for the Rugby train.

Table 5.6 DIRFT Rail Port Volume of Units

5.98 The forecast for DIRFT III is based primarily on growing this “internal” rail traffic – the movement of containers by rail to and from locations within the DIRFT estate, starting at 45,472 units in 2010.

Domestic Non Bulk Origins

Domestic Non Bulk

Destinations Port Non Bulk Origins Port Non Bulk Destinations

2006 2015 2030 2006 2015 2030 2006 2015 2030 2006 2015 2030

E. Midlands 0.6 0.8 3.1 0.4 0.8 2.4 0.1 0.2 1.7 0.4 1.6 6.7

West Midlands 0.4 1.4 0.4 1.6 1.1 1.2 2.4 1.7 2.3 4.6

E. Midlands Cumulative Annual Growth Rate 7% 8% 13% 12%


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5.99 As a minimum, the number of containers handled to or from DIRFT locations by rail could be expected to grow in line with the growth in the area of warehousing available. If the present 390,645 square metres on DIRFT grows to an eventual 1,285,386 square metres following completion of DIRFT III, that represents growth of 329% or 5.3% per annum from the time the terminal opens to 2033. If the internal rail traffic grows by the same amount, the forecast at completion of DIRFT III would be about 150,000 units per annum of “internal” rail traffic – containers transported to or from locations within the DIRFT estate.

5.100 However, as has been shown in preceding sections, the movement of freight by rail in the markets that DIRFT III serves is expected to grow faster than the growth in volume available: the rail market share is expected to increase. One way to forecast this impact would be to apply the faster growth rates forecast by the rail industry to the internal traffic for the DIRFT Base Year.

5.101 As set out in Table 6.7 The compound average growth rate in the rail industry forecasts from 2006 to 2030 are as follows:

• Deep Sea (port) to the East Midlands: 12.5% (Inbound)

• Domestic non bulk: 7.8% (Inbound, as reported in 7.69)

• Channel Tunnel: 8.3% (Average, as reported in 5.94)

5.102 Applying these growth rates to the volume of internal traffic at DIRFT in the Base Year (45,472 units) results in the following forecast volume for 2033, the predicted year of completion of DIRFT III:

• Deep Sea: 132,321 units

• Domestic: 101,504 units

• Channel Tunnel: 114,774 units

• Total = 348,559

5.103 This provides a forecast for the potential rail traffic generated by businesses on the DIRFT estate in 2033. Spare capacity at the new DIRFT III intermodal terminal would be available for use by other businesses in the surrounding area, and this “external” traffic is also forecast to increase as DIRFT will continue to play an important role in serving local concentrations of warehousing, particularly Magna Park and Northampton and locations in the West Midlands. However, it is prudent not to forecast this traffic growing as fast as the internal traffic for the following reasons:

• The other businesses will not benefit from the low collection and delivery costs of businesses on the DIRFT estate

• It is expected that other terminals will be developed which will capture demand from further afield, for instance the Three Cities area of the East Midlands or locations in the West Midlands


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5.104 As a result, “external” traffic is forecast to grow at half the rate of internal traffic, or around 4.3% per annum. Applying this growth rate to the external traffic results in the following overall forecast for DIRFT III.

Table 5.7 Forecasts for External and Internal Units (Units per annum, both directions combined)

Base Year 2010 Forecast: 2033

Internal External Total Internal External Total

Deep Sea 8,759 20,437 29,196 132,321 82,681 215,002

Channel Tunnel 18,485 4,087 22,572 114,774 10,371 125,145

Domestic 18,229 28,667 46,895 101,504 68,739 170,242

Total 45,472 53,192 98,664 348,599 161,791 510,390

5.105 Thus by 2033, DIRFT III is forecast to be handling 510,000 units per annum, a mixture of Deep Sea, Channel Tunnel, and Domestic traffic. While DIRFT III will provide an extensive area of rail connected warehousing, the present market indicates a strong preference for intermodal services. For the purpose of this forecast it has been assumed that 10% of the volume would be handled in conventional wagons, which would produce 2-3 trains per day compared to 1 train per day today.

5.106 The remaining 90% of units is divided between Deep Sea, Channel Tunnel, and domestic intermodal. Forecasts are based on existing train lengths, i.e. generally around 550m per train. In the future trains as long as 775m may operate. The forecast uses 550m trains as this represents a worst case for the terminal and its associated infrastructure, as it would generate more train movements than longer trains.

5.107 By 2033 it is forecast that the terminal would be handling:

• 8 Deep Sea trains each way of 30 wagons per train

• 8 Channel Tunnel trains each way of 30 wagons per train

• 13 Domestic trains each way of 25 wagons per train

• 3 Conventional trains per day of various capacities

• = a total of 32 trains per day each way = 64 trains per day in total

Conclusions

5.108 This section of the report outlines drivers of need for Rail Freight Interchanges. It has been identified that: -

1 A key driver of market demand and government support for Rail Freight Interchanges arises from the sustainability benefits of rail freight, which offers better energy-efficiency, reduced emissions and reduces road congestion. These sustainability benefits of rail freight align with business corporate responsibility targets to reduce the businesses’ carbon emissions and increase their sustainability credentials.


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2 Secondly, the economic and operational benefits of rail freight in respect of factors such as cost, reliability, flexibility and journey time enable rail freight to offer a competitive alternative to road freight. These benefits are becoming increasingly clear to businesses.

3 In terms of sources of demand for rail freight, it has been demonstrated that DIRFT I is already playing a central role in each of the three key service sectors that DIRFT III will be targeting:

i DIRFT I is a major location for handling deep sea containers to and from the Midlands. Container volumes through UK ports have consistently grown for many decades and the growth in trade and container volumes is continuing to drive demand for this market. As a result, there is demand for the development of distribution centres at well located inland freight interchanges.

ii DIRFT I is the central player in the domestic intermodal market. The movement of trains of containers between inland rail terminal has grown dramatically in recent years. Key drivers of demand for this market relate to changes in supply chain management (for example of supermarkets), the green agenda and are reflected in demand for the development of distribution centres at Rail Freight Interchanges.

iii DIRFT I is the chosen terminal for one of the new generation of international intermodal services via the Channel Tunnel. It is recognised that there is a degree of suppressed demand due to historic problems resulting in a varied volume of rail freight movements through the Channel Tunnel. Evidence suggests that recent changes will have a significant impact on rail freight volumes through the Channel Tunnel, resulting in demand for the development of distribution centres at Rail Freight Interchanges.

4 The movement of freight by rail in the markets that DIRFT III services is expected to grow faster than the growth in volume available. Demand for rail freight at DIRFT is forecast to increase substantially in the period to 2033. As a result of projected increases, it is forecast that by 2033, the DIRFT terminal would be handling a total of 32 trains per day each way (64 trains per day in total).


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6.0 Existing DIRFT Intermodal Terminal

Limitations

Introduction

6.1 This section of the report identifies need established by specification considerations. As well as considering general specification considerations for the development of new/expanded RFIs, the section focuses on the strengths and weaknesses of the existing intermodal infrastructure at DIRFT and how requirements to improve this infrastructure would be most appropriately met through expansion at the DIRFT III site.

DIRFT Specification Considerations

6.2 This section demonstrates that infrastructure requirements provide a key requirement in respect of the existing DIRFT facility which can be most appropriately met by the development proposed at DIRFT III. In doing this, the following is outlined: -

1 How requirements to upgrade existing infrastructure at DIRFT are a key driver of expansion.

2 How expansion of the existing DIRFT provides significant benefits in terms of rail connectivity compared to the alternative of new provision elsewhere.

Existing DIRFT Infrastructure

6.3 The current DIRFT Rail Port was designed in the mid 1990’s and opened in 1997. It is regarded as being a good example of intermodal terminal design and operation. The terminal has proved flexible enough to perform a different role to that it was designed for: handling Channel Tunnel intermodal traffic.

6.4 However, the Rail Port is reaching its effective capacity. After 13 years of heavy use, there are serious problems with wear and tear. Operationally, the Rail Port has several serious constraints:

1 While the reception yard was designed for full length 750m long trains, the 4 loading sidings are each only 300m long. This means that even 550m long trains must be split and shunted in to the terminal in two sections, reducing capacity and adding cost and time.

2 The area for storing containers in stacks is only 2.4 Hectares. Furthermore, this cannot be used efficiently because of the shape of the storage area.


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3 The Rail Port currently operates 4 reach stackers in order to load and unload trains efficiently. It would be difficult to increase the number of reach stackers as the size and shape of the terminal would mean that reach stackers would increasingly be blocking each other in.

4 There are serious problems with the concrete paving in the handling area, as described below.

6.5 Since the opening of the Rail Port, containers have been lifted and stacked by reach stackers. These are large lifting tractors that can lift a 45 tonne container from the second rail track. At this point of lifting the load through the front wheels can be up to 120 tonnes. In addition, the reach stacker turns using its rear wheels and therefore the front wheels subject a significant twisting moment through to the slab beneath. These forces have caused major wear to the concrete slab. This wear has required regular maintenance which is becoming worse at an increasing cost.

6.6 The following table identifies the costs incurred repairing the Rail Port since September 2008. Some of the repairs made since 2008 have failed. Prologis currently has the liability to repair the slab as terminal operators were reluctant to take on that liability. This is mainly due to the unforeseen and non-budgetable level of repair works and costs.

6.7 The slab repairs are not only costly, but difficult to programme quickly. Unfortunately Prologis has experienced a Health and Safety accident due to the condition of the slab. Prologis also has to programme the works with the Rail Port operator to ensure there is minimal impact on business.

Table 6.1 DIRFT Concrete Repair Works

Date Name Description Value

19 Sep 08

DIRFT Concrete repairs

Concrete and drainage repairs £90,947.12

05 May 09

DIRFT Phase 2 Concrete and drainage repairs and grout injection

£80,685.75

20 Nov 09

DIRFT Phase 3 Concrete and drainage repairs £79,924.29

31 Mar 10

DIRFT Phase 3 – additional areas

Concrete and drainage repairs £32,758,18

16 Aug 10

DIRFT Phase 4 Concrete and drainage repairs £84,986.00

Total £369,301.34

Options for Resolving DIRFT Infrastructure Problems

6.8 While throughput has grown steadily since the terminal was opened in 1997, these increasing costs will eventually out strip the rent generated


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by the Rail Port creating a liability rather than an investment. The only real solution to remedy this problem is to re-lay the entire slab, or ideally stop using reach stackers in favour of gantry cranes. Gantry cranes move backwards and forwards along the train lines, stacking containers parallel to the tracks. They do not subject the slab to the same type of forces that reach stackers do, but introducing gantry cranes would require a complete rebuild of the Rail Port particularly because of the shape of the current facility.

6.9 The costs of relaying the slab are considerable. Coupled with the operational problems that occur with the use of reach stackers and the approaching capacity and throughput considerations, it would be illogical and unviable to rebuild the existing facility and it may become unviable in due course to repair it.

DIRFT III as preferred solution

6.10 The proposals for the new rail freight terminal at DIRFT III are for an intermodal terminal and associated rail infrastructure that can receive 750m long freight trains without having to break the trains down. The terminal will use rail mounted gantry cranes to unload and load the trains, load and unload road going vehicles and lift to a stack under the gantry crane. It is believed that this will remove future operational issues that the current Rail Port is suffering from.

6.11 In effect, the intermodal terminal will be two parallel intermodal terminals, allowing construction to be phased to meet demand.

6.12 The capacity of the new intermodal terminal is to receive as many as 32 trains a day. Prologis has built contingency into the working practices and as freight trains get longer the new facility will be able to handle more containers without an increase in train paths.

Wider Rail Freight Benefits of Developing DIRFT III Rail Infrastructure

6.13 This section outlines how expansion of the existing DIRFT provides significant benefits in rail connectivity compared to the provision of a new RFI facility elsewhere. A summary of the operational and cost benefits of expansion at DIRFT is provided below, a more detailed analysis is provided in the Rail Operations Report: -

1 The current DIRFT Rail Port already has connection in both (north and south) directions to the Northampton Loop line of the West Coast Mainline. The proposals for DIRFT III do not require any additional connections to the mainline, but utilize those already in place. When compared to other proposals that require new rail connections this is a major cost and operational benefit.

2 From the start, the intermodal terminal will be able to handle long trains (up to 775 metres overall length), trains formed of


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conventional wagons as well as intermodal trains, and trains hauled by electric traction as well as diesels.

3 The WCML is electrified on the 25kv AC overhead line system and it has been cleared to the W10 loading gauge, currently the most generous gauge on the national network.

4 DIRFT is located on the W10 gauge network. Trains from DIRFT can access Southampton, Felixstowe, Tilbury, and Liverpool on W10 cleared routes, allowing deep sea containers to be carried very efficiently.

5 Trains from DIRFT reach a variety of locations including the Channel Tunnel and mainland Europe and the deep sea container ports at Felixstowe, Tilbury and Southampton. All of these routes are regularly used by freight trains and are part of the Strategic Freight Network (see section 4).

Conclusions

6.14 After 13 years of heavy use, improvements to the existing infrastructure provision at DIRFT are required. The current terminal facing several serious constraints which reduce the capacity and efficiency of the terminal and result in increasingly expensive repairs being required. As it would be illogical and unviable to rebuild the existing facility, the most appropriate solution is the development proposed at DIRFT III.


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7.0 Conclusions

7.1 This Report has evaluated and assessed the need specific to the expansion of Daventry International Rail Freight Terminal (DIRFT) on land at the Rugby Radio Station site in Daventry District (DIRFT III) with part in Rugby Borough. The capacity of the existing DIRFT Rail Port, its physical infrastructure deficiencies and the growing demand for additional RFI provision in the area within which DIRFT is located results in an urgent need to expand the existing level of intermodal and strategic distribution development at the DIRFT site. There is a compelling need to further expand the DIRFT facility at the DIRFT site itself.

7.2 Notwithstanding the compelling case for the further expansion of DIRFT at the current location, this report has demonstrated: -

1 The need for the development established by planning policy and planning evidence base documents at a national, regional, sub-regional and local level. Here it is demonstrated that a very clear policy need is established as documented in the National Planning Policy Framework, Department for Transport Guidance on logistics and Rail Freight Interchange development, East Midlands and West Midlands Regional Strategies, East Midlands Strategic Distribution Study, Northamptonshire Strategic Employment Land Assessment, West Northamptonshire Joint Core Strategy Pre-Submission Version and other documents. A need has also been demonstrated for the scale of the proposed development which will not lead to an over-supply compared to the need identified by evidence base documents.

2 The strong market demand for further rail-related warehouse buildings, both generally at a national/regional level and specifically at DIRFT as a result of the unique characteristics of the DIRFT site. The site has clear locational benefits, being close to the West Coast Mainline and Junction 18 of the M1. The locally specific assessment of market demand includes an analysis of the past take up of rail-related warehousing development at DIRFT and a review of current and projected market demand for rail related distribution buildings in this locality. These indicators demonstrate strong market demand at DIRFT.

3 The clear and well established sustainability, economic and operational benefits of increased rail freight, which are key drivers of demand for RFI development. An analysis of the sources of demand for rail freight at a national, regional and local level has identified that DIRFT is already playing a central role in each of the three key service sectors that DIRFT III will be targeting (the domestic intermodal market; and international intermodal services via the channel tunnel). An analysis of forecast demand has


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identified that the movement of freight by rail in the markets that DIRFT III will service is expected to grow faster than the growth in volume available and that demand for rail freight at DIRFT is forecast to increase substantially in the period to 2033.

7.3 Thus, the report has set out a very compelling policy need for Rail Freight Interchange development at DIRFT. However, it is emphasised that the demonstration of ‘need’ for the development is not an IPC requirement or a requirement of any other policy regime. The need case for the development for which Development Consent is sought at DIRFT III has been prepared due to the current absence of a National Policy Statement on National Networks. Although the NPS relating to national networks has not yet been published, it is anticipated that it will set out a clear need for further rail freight developments. It is envisaged that the NPS may have a similar approach to the NSIP’s which have been published in respect of Energy, which state that the IPC should assess all applications for development consent for energy developments on the basis that the Government has demonstrated that there is an urgent need as set out in the relevant NSIP.