Supporting Modal Shift
Client: Newell & Wright (NWT Group)
Linked Services:
Commercialisation
Operations Capability
Rail Industry Navigation
Executive Industry Guidance
Newell & Wright Transport (NWT), an established freight company, identified that they could benefit from taking greater ownership of the rail am of their transportation.
Winning Government subsidy for risk-taking freight operator
Newell & Wright Transport (NWT), an established transport and logistics company with a range of services throughout the industry, identified that they could benefit from taking greater ownership of the rail arm of their transportation.
NWT are a Sheffield-based company with 50 years’ experience of providing haulage to a wide range of customers. With origins in road haulage, their initial venture into rail freight was dependent on established rail freight operators, and therefore relied on bought freight services. Once embedded in rail transportation, NWT saw their business grow significantly. However, they were still highly dependent on much larger third-party companies, who were navigating their own issues in relation to wider market conditions and macro-economic factors in the global supply chain.
After conducting a practical review of the business strategy and long-term planning, NWT decided to test the market, seeking a business that had experience and expertise in the rail logistics sector. They sought support to achieve their key goal of controlling the factors they already had within their give, such as optimising market position, but, crucially, guidance on influencing the factors which were currently out of their control. To achieve this, NWT partnered with InnoRail UK Limited, who began the support by conducting a strategic review of the rail operations activity and the methods of buying services and delivering for the end customers. This identified an area of risk which was currently out of NWT control, but was entirely in NWT’s scope of operations to control; the UK Government’s ‘Modal Shift Revenue Support’. This subsidy seeks to support the uplift in cost for transferring to rail transportation as compared to road, making it, in many cases, a more affordable transition for freight businesses, when taken in concert with the environment benefit such a model shift can bring to support NWT in its environment impact goals as well as those of its clients.
Today, NWT continue to buy in rail services from established rail freight operators but are now more connected to government policy on model shift programming, and enjoy a much clearer and cleaner relationship with the risks present in the market, and associated with making the shift to rail.
Fundamental to the success of this piece of work was facilitating the access to the Department for Transport, to whom the applications are made and who allocate the funding to operators. Developing an understanding of the impact that the grant could have on the business led to this step-change in operation, contributing to a 100% expansion in deep sea shipping container operations by rail in the past 5 years.
In addition to supporting with the strategy to manage risk and exercise control over rail activities, NWT have also expanded in to Rail Freight Terminal operations with an investment of more that £25m which InnoRail UK has been instrumental in supporting, utilising a wide range of knowledge and experienced practitioners to assist in advisory services as diverse as railway land leases, to rail track maintenance and Rail Freight Terminal design.
InnoRail’s industry knowledge and support provided NWT with the contacts and confidence to navigate the application, the outcome of which was substantial in enabling them to deliver rail services, with more confidence.
NWT’s consistent, long-held business success can be attributed to being agile, responding positively to challenges and taking risks. This shift towards greater operational independence supported NWT in their ambitions to diversify the business, exercise greater control over both this and their resultant carbon footprint, and position them for continued success in the future.