Pioneering British electric express logistics operator Varamis Rail has temporarily halted services amid rising costs and industry pressures.
Industry observers and insiders have variously speculated about the fate of the company. None appear to have spoken directly with the company. Speculation ranges from electricity costs to technical issues. Varamis Rail, however, refutes claims made online that the company had encountered regulatory issues.
The company runs a unique service, utilising repurposed passenger units, refitted to carry parcel trolleys, between Birmingham and Glasgow. Claims that Varamis Rail has been suspended by the UK regulators have been refuted by the company and the regulator. Varamis Rail has told WorldCargoNews that, despite much online speculation, no notice had been served by the Office of Rail and Road (ORR). For its part, the UK regulator has since confirmed as much in statements to the UK press. For now, though, Varamis Rail trains remain off the tracks.
Operations paused amid mounting cost pressures
Varamis Rail has privately briefed WCN, saying that operations have been temporarily suspended. The company is reviewing the financial viability of its service. Press reports say this is due to rising electricity prices. This follows a report in The Telegraph newspaper (25 July) that suggested the operator would remain dormant until at least September 2025.
The open-access operator has faced significant challenges in balancing its sustainable logistics model against operational realities. Energy costs have surged in recent months, undermining the case for an all-electric high-speed freight solution without broader industry or policy support. It’s an issue that has affected other freight operators too. The UK rail sector is on the cusp of a nationalisation programme which, although concentrated on the passenger sector, has unclear implications for this unique independent operator.
The Varamis story from day one
Since its inception, our sister service RailFreight.com has tracked the development of Varamis Rail. Pioneered by lifelong railway professional Phil Read, the gestation finally resulted in its licensing in 2022. Thereafter, Varamis launched its overnight Birmingham–Glasgow service. It has since run demonstration trains into Liverpool Street in London and plans to expand into the capital’s market. The company made headlines for converting former Class 321 passenger EMUs into express logistics trains and promoting a zero-emissions alternative to road-based freight.
The operator received early support through a UK Government “first-of-a-kind” innovation grant and developed a partnership with Carousel Logistics for the launch of its Birmingham–Glasgow service. That route, running five nights per week, offered a sub-four-hour transit time, directly challenging traditional road and even rail offerings. That timing made Varamis the fastest rail service between the two cities.
Infrastructure charges and network access friction
Among other long-standing hurdles has been the cost of terminal access, most notably at the former Royal Mail terminal at Mossend on the outskirts of Glasgow in Scotland. Founder and managing director Phil Read previously described facility charges there as “extortionate”, warning in an interview that such costs could jeopardise the service’s long-term viability.
Varamis had called for greater flexibility and innovation from the infrastructure sector to enable agile, scalable express services to flourish. Its early experience demonstrated the challenges new entrants face when attempting to secure access at commercially sustainable rates. The company has been, if nothing else, persistently resilient.
Regulatory status confirmed
Amid unsubstantiated speculation online, claims emerged that Varamis Rail may have been subject to enforcement by the Office of Rail and Road. However, the ORR has publicly stated that no prohibition notice or similar enforcement action has been issued. WorldCargo News has, however, confirmed with ministerial sources that the UK Government is aware of the situation facing the company.
Varamis Rail reiterated this. The company confirmed that there is no regulatory barrier to operations. Any service suspension is being made voluntarily, as a strategic response to commercial pressures rather than legal requirements.
Rolling stock constraints remain a bottleneck
Beyond infrastructure and electricity costs, the operator continues to face challenges related to its rolling stock. While it secured additional Class 321 units for conversion, delays in refurbishment have slowed progress toward service expansion. These most notably have held up a proposed London–Midlands route into Liverpool Street, originally targeted for launch in May 2025. Reference to that service has, however, been withdrawn from the Varamis homepage.
Eversholt Rail’s decision to abandon its broader “Swift Express” Class 321 programme left Varamis with the responsibility to determine if it could complete additional conversions in-house or through third parties. Progress has been slow, and units remain out of service.
Industry reception mixed for new entrant
Phil Read has previously spoken candidly about resistance within the rail industry. He has publicly suggested that a small group of insiders sought to obstruct the company’s efforts. “Probably a dozen people tried to stop what we are doing,” he told the UK’s Rail Magazine, citing institutional inertia and a reluctance to embrace new operational models.
Nevertheless, the concept of high-speed electric logistics by rail continues to attract interest. Other operators, including Freightliner, have publicly considered similar express initiatives, and Varamis remains a trailblazer in what is still an emerging market segment. While other operators have entered the market, Varamis remains the only operator to have used its own dedicated trains.
Uncertain but not abandoned
While services are currently paused, Varamis Rail has not withdrawn from the sector. The company maintains its licence and continues to explore opportunities for resumption later in 2025. Its commitment to low-carbon logistics by rail remains undiminished.
For now, the Varamis experience highlights both the innovation possible in the UK rail freight sector and the barriers that persist—cost, access, and integration foremost among them. Whether or not Varamis Rail returns to the tracks this autumn, its initiative has already reshaped perceptions of what rail freight can deliver in the age of just-in-time, low-emission logistics.