Evaluation of the Marginal Cost and Revenue Impacts of Transferring Freight from Road to Rail

Evaluation of the Marginal Cost and Revenue Impacts of Transferring Freight from Road to Rail


C Gilliam and E Humphreys, Arup; C Hughes, Strategic Rail Authority, UK



This paper will report the outcome of a project for the Strategic Rail Authority, to evaluate the marginal cost and revenue impacts of transferring freight from road to rail, and recommend revised values for the?Sensitive Lorry Miles? (SLM) that are applied to assess the level of Freight Facilities Grant or Track Access Grant arising from a grant application. This work is fundamental to the Government?s policy of achieving an 80% increase in rail freight tonne-km over the period of its 10 Year Plan, since much of this increase will depend on SRA grants assessed partly on the basis of SLM values. The value of road freight transfers to rail is also an important input to the rail freight appraisal methodology being developed by SRA for application to rail network investment.

The focus of the study was a re-evaluation of the marginal social benefits of removing freight from the road network; however, the marginal cost impacts of transferring freight onto the rail network were alsotaken into account. Following a review of recent relevant research, it was decided to apply results obtained by NERA, AEA Technology Environment & TRL (Lorry Track and Environmental Costs; 2000) and by ITS University of Leeds & AEA Technology Environment (Surface Transport Costs & Charges: Great Britain 1998; 2001). However, the marginal external congestion costs on motorways were not available in a suitable disaggregate form, so these were evaluated from first principles, using automatic traffic count data provided by the Highways Agency and DTLR.

It was recommended that the SLM values should take into account the marginal cost savings to both society and (road and rail) infrastructure operators. The recommended values were disaggregated into seven categories, involving combinations of road types, area types and congestion levels. Areas of uncertainty requiring further research were also identified.


Association for European Transport