This latest funding injection forms part of a broader £7 million Freight Innovation Fund Accelerator, a government initiative aimed at driving innovation and sustainability across the freight industry.
Unveiling the third round of funding on 1 May, Roads Minister Guy Opperman said: “The freight and logistics sectors are part of our economy’s backbone, ensuring supermarket shelves are stocked, hospitals receive crucial medical supplies and important deliveries are made.
“That’s why, as part of the government’s plan to grow the economy, the Freight Innovation Fund is supporting businesses to innovate and back skilled UK jobs.”
In this latest round of funding, up to 12 SMEs within the freight industry will vie for up to £1.8 million in funding to integrate advanced AI technology and automation into their operations, aiming to optimise the transportation of parcels and goods via trains, lorries, vans, and ships.
During first two years of the fund nearly £3 million was allocated to several SMEs, enabling collaborations with industry leaders to enhance the cleanliness and efficiency of British supply chains. Noteworthy outcomes of these partnerships include FedEx's trials of eCargo bikes for fast parcel delivery in congested urban areas, contributing to emissions reduction efforts.
Success stories from previous funding rounds are significant, with winners reporting a combined £97 million in commercial investment, underscoring the potential for decarbonisation and job creation within the sector.
Speaking to Freight Industry Times at the launch, Opperman said this was an “amazing return” and hopes to extend the scheme although he could not commit to further funding beyond the next general election.
“I've met some of the companies today who received some of the previous funding and they are game changing companies who will create a lot of jobs in this country, solve a lot of our problems and also potentially be exporters and therefore bring us in revenue from abroad."
Opperman explained how the initiative might be extended: "I think there are two ways of doing this. So, the first is you look at the individual businesses who have had success in applying for the grants and growing their businesses on the back of that. Secondly, you look at a particular sector and you invite people to solve particular problems in that sector."
He explained further: “Take a traditional business, for example in ports, logistics, haulage, and apply modern technology to that business. And it's how that modern technology can then help save those businesses money, make them work better, and genuinely achieve a better outcome on a long-term basis."
Examples of groundbreaking ideas that have become reality thanks to support from the fund include Royal Mail working with Skyports to deliver mail by drones across the islands in Orkney. This is the first time mail is being delivered by drones in the UK, allowing Royal Mail to deliver 24 hours faster than using vans or ferries.
Alex Brown, Director at Skyports Drone Services, said: “The Freight Innovation Fund Accelerator, alongside the work with Royal Mail, was a key proof point we could speak to during our capital raise process to demonstrate the progress we were making with our drone delivery business.
“Importantly the work with Royal Mail in the Orkney Islands is still ongoing, demonstrating how a catalyst like the Freight Innovation Fund Accelerator can result in lasting products and services.
The Freight Innovation Fund Year 3 follows £200 million to roll out hundreds of zero-emission trucks and lorries as well as freight charging infrastructure. The fund was originally launched in 2022 as part of the government’s Future of Freight plan, the first plan for government and industry to work closely together to deliver a world-class, seamless flow of freight across the UK’s roads, railways, seas, skies and canals.
Previous technologies supported in other funds include:
Hypermile – introduced an artificial intelligence programme that offers real-time feedback to help lorry drivers save fuel
Fishbone Solutions – launched a programme that uses vibrational data from rail freight wagons and artificial intelligence analysis to determine whether the wagons are working correctly
CGA Simulation – developed a tool that simulates urban environments to predict the best place where to build new infrastructure and improve logistics
Connected Places Catapult will administer the Freight Innovation Fund, providing technical and business support to SMEs. Additionally, the government has earmarked £31 million, in collaboration with industry partners, to enhance truckstops and working conditions for lorry drivers, including more parking spaces, improved welfare facilities, and safer rest areas.
Responding to the launch of the latest round of funding available from the Freight Innovation Fund, Logistics UK, Deputy Director Policy, Michelle Gardner says:
“Logistics UK welcomes the launch of the Freight Innovation Fund’s latest cohort of accelerator funding. It presents an exciting opportunity for SMEs to bid for a share of £1.8 million to develop and trial their creative solutions in real-world environments and help solve pressing challenges within the freight sector.
“The logistics sector is already making great progress on its decarbonisation journey. However, there is still much to be confirmed around the supporting infrastructure to smooth the journey to net-zero, not least a robust and comprehensive refuelling and recharging network, but initiatives such as the Freight Innovation Fund will help ensure that innovation and technology is part of the solution.”
For more information about the Freight Innovation Fund Accelerator, click here: