Government releases £1.8m of funding to help SMEs use AI to decarbonise freight

The £1.8m fund aims to support SMEs to deploy cutting-edge AI technology and automation to improve the way trains, lorries, vans, and ships carry parcels and goods.

The first two years of the fund saw nearly £3m allocated to several SMEs. Examples of ideas supported by the fund include Royal Mail and Skyports’ roll out of mail drones across the Orkney islands for the first time, which saw Royal Mail delivering 24 hours faster than using vans or ferries.

The fund has also supported FedEx in trialling new eCargo bikes to deliver parcels quickly in traffic-heavy city centres, helping decarbonise deliveries.

Previous funding winners have reported a collective £97m in commercial investment from the £1.2m Government Year 1 fund, decarbonising supply chains and supporting jobs.

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.”

The Freight Innovation Fund Year 3 follows £200m of funding used to roll out hundreds of zero emission trucks, as well as freight charging infrastructure, to help set road freight on the path towards net zero.

The fund was originally launched in 2022 as part of the Government’s Future of Freight Plan, which the DfT said is the first-ever 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.

This fund builds on previous government initiatives designed to support increased research and development in the freight industry. 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

Delivered by Connected Places Catapult, which is the UK’s innovation accelerator, the Freight Innovation Fund will give SMEs access to technical and business support from the organisation.

Connected Places Catapult’s chief executive officer, Erika Lewis said: “The UK’s freight sector plays a major contribution to our economy, but there are many opportunities worth exploring to improve efficiencies and environmental performance associated with the movement of goods.

“I am excited to see what new ideas and technologies companies taking part in the Freight Innovation Fund Accelerator come up with, and I encourage SMEs to come forward.”

Other measures to help bolster the UK’s haulage and freight sectors include £31m in joint government and industry investment to improve truckstops and working conditions for lorry drivers by providing more parking spaces, better welfare facilities and safer rest areas.

 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.”