The Anglo-French group has nine freight shuttles and is buying another seven, which will have more carriages than those in its existing fleet, as part of a pounds 250m investment programme. Frequencies will also rise from between three and four trains an hour at peak times to seven times an hour once all the extra shuttles are in operation in 2003.
The demise of duty-free from 1 July will deprive Eurotunnel of the bulk of its retail income. Last year it made pounds 195m from the retail outlets at its Folkestone and Calais terminals - most of which came from duty- free sales.
Eurotunnel accounts for 38 per cent of lorries carried on short-sea crossings of the Channel - a percentage which is set to rise sharply as more capacity is added.
The tunnel has recovered from the freight-shuttle fire in November 1996, and last year carried more than 700,000 lorries. In the first three months of this year, freight traffic was up by 17 per cent on the same period last year with 186,000 lorries carried.
The new shuttles will contain four more carriages than the existing ones, which have 28. This will necessitate modifications at the two terminals and the building of new tracks to accommodate the longer trains.
Once the investment is complete, Eurotunnel will have 16 freight shuttles in operation. It also has nine passenger shuttles, and a spokeswoman said that there were no plans at present to increase this number.
Other initiatives being introduced to offset the loss of duty-free income include an expansion of retail outlets at the two terminals which are under the management of BAA, the airport operator.
Eurotunnel also said it was putting more effort into marketing the destinations that could be reached through the tunnel in an attempt to increase passenger revenues.
Last year the heavily-indebted group made its first profit before tax and interest of pounds 64m on turnover of pounds 618m.