Blog Post

Freight in Great Britain : Decoupling of freight demand from economic growth

  • By Chris Rowland
  • 05 Dec, 2019

There has been a gradual de-coupling of freight moved or lifted from GDP growth since the early 1980s due to the decline of heavy industry and manufacturing generally and a shift to a service-based economy that is more reliant on imports of consumer goods. This trend accelerated following the Great Recession in 2008-09.   

While freight transport in terms of tonne kilometres closely followed the trend in GDP up to the end of the 1970s, it gradually diverged up to 2008 and then fell more rapidly during and after the Great Recession due to the downturn in economic activity. This decline in freight activity since 2008-09 is also explained by the impact of Government energy policy, which has led to the closure of coal-fired power stations and lower demand for rail freight services to transport imported steam coal from UK ports to inland power stations.

Since 1953 the average length of haul of freight has increased from 72km in 1953 to 98km in 1980 and 107km by 2015. This gradual trend was due to lighter and increasingly imported manufactured goods being moved over longer distances, whereas the decline in domestic manufacturing after 1980 led to lower volumes of intermediate goods being moved between factories.

Without a more interventionist state supporting manufacturing industry following the UK’s departure from the EU, it is difficult to see any significant change in this trend as economic growth is driven by the services sector.  

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