ASSOCIATED British Ports (ABP), the owner and operator of Southampton docks, is to invest £1m on upgrading the rail operation that moves containers from the city's quayside to the West Midlands.

The money will expand current facilities at the Hams Hall Railfreight Terminal on the outskirts of Birmingham after the port group's division ABP Connect secured a new two-year agreement with rail-logistic specialist Freightliner.

Although this comes just days after the government turned down ABP's plans to develop Dibden Bay on Southampton Water, the port is determined to fight to maintain it present position as a major container port.

Every year thousands of containers will be transported from Southampton to Hams Hall, which will now accommodate the increased throughput the new daily service generates.

Freightliner has introduced the service from Southampton to the West Midlands rail hub in response to increased customer demand.

Joanne Turner, Freightliner's Southampton commercial general manager, said: "We are delighted with this new service.

"It has received tremendous support since its launch, especially from customers moving their traffic from road to rail. Most of this service is already pre-sold contract space, which is good news for everyone as it removes heavy-goods vehicles from the road.

"It is also good news for the rail industry as these type of agreements ensure that our wagons will always run fully laden and use the rail network efficiently."

Since ABP Connect assumed operational and managerial control of Hams Hall in 2002, the terminal's weekly throughput has increased following the completion of an expansion programme in June 2003 that doubled operational capacity.

ABP Connect is now investing £1m to purchase a fifth reachstacker for the site and to construct 11,800 sq m of additional container-storage space.

Chris Geldard, ABP Connect's head of rail development, said: "Hams Hall has a strong and long-standing relationship with Freightliner, so we were delighted to assist them with the creation of a sister service to their Felixstowe operation.

"Through providing Freightliner with the necessary support, they have launched a service that we are both confident will be a success.''