Examination of witnesses
(Questions 340 - 359)
WEDNESDAY 9 DECEMBER
MR JAMES
HOOKHAM, MR
LAWRENCE CHRISTENSEN
and MR GEOFF
DOSSETTER
340. The European Union at the moment is
proposing target CO2 emission reductions from vehicles—cars—of
about one-third. I cannot imagine that the things you are proposing
are going to more than scratch the surface in that particular
direction. Should you not be addressing yourself to more serious
measures to effect the change?
(Mr Hookham) I think we are looking at the extent
of the practicalities. Maybe I could ask Lawrence Christensen
to give an example from his company. In terms of what our members
can actually do now to respond to the challenge the Government
is setting, to clear their concerns as well about environmental
measures, we come down to what may appear to be very practical
issues but are the things which are within the hands of our members
actually to do, and that is to spend money on getting their drivers
trained to take their foot off the gas and drive their vehicles
efficiently.
Chairman
341. Mr Christensen, do you have some contribution
to make to this argument?
(Mr Christensen) Yes. There is an assumption in
the tax that our industry is already operating at a highly inefficient
level, and that by imposing a tax companies will be more efficient
in their operations, but there is such a high level of competitiveness
out there in industry at the moment that we are all operating,
and constantly seeking for ways to operate, more efficiently,
without any incentive or disincentive from the Government as far
as taxes are concerned. James is absolutely right, the way forward
is by using alternative technologies. In my company we have pioneered
the use of railways. We have also pioneered the use of compressed
natural gas vehicles and also the use of technology in managing
transport. It is giving companies the incentive to move in that
direction that is the way forward, in my opinion, not by taxing
them so that they cannot afford to go in that direction. If I
can give you some examples in terms of the technology we have
invested in, there is a huge range in performance of kilometres
per litre (which is how we measure the performance of our vehicles)
between one driver and another driver in the same vehicle, which
we can now identify precisely, and we can identify precisely why
that is happening in terms of when he is changing gear, how much
he is over-revving the engine, etcetera. We then select those
drivers for further training. Smaller companies cannot do that
if they are already being heavily penalised on tax. If you take
the issue of compressed natural gas, we are delighted with the
performance of the ten vehicles which we now run into Central
London on compressed natural gas. I cannot find anyone else who
will build the vehicles for me, other than the company which now
makes the engine. We had to go to Canada to get the compressed
natural gas engine. It is about the Government getting behind
initiatives like that. I want to be delivering to Glasgow and
to Edinburgh with compressed natural gas, not diesel lorries.
The issue there—this is my personal view, so it might not
jive altogether—is that I think there are two kinds of environment. There is the environment where we are not trying to put CO2
into the atmosphere, and there is the other environment where
we are not trying to push particles down the throats of pedestrians
and cyclists in our cities. Whereas the compressed natural gas
engine is broadly comparable with the diesel engine in terms of
the environment in that sense, in terms of people it is a lot
cleaner.
Dr Whitehead
342. Would you be prepared to share fuelling
depots with other companies, were you to expand the use of CNG?
(Mr Christensen) It is certainly something we
would be prepared to look at, yes.
Mr Olner
343. You mentioned efficiency, but in actual
fact the industry really for the last ten years has not reduced
the proportion of empty-running lorries, estimated at 30 per cent,
has it?
(Mr Christensen) I would beg to differ there,
with respect. There are certain lorries which you cannot have
a return load on, like petrol tankers, milk tankers, etcetera,
and they are all rolled into this calculation. We get people coming
from all over the world. I am pretty passionate about this, as
you have probably already gathered.
344. If it is not 30 per cent, then what
is it?
(Mr Christensen) I can only speak for my own company.
We operate at about 83 to 85 per cent and are constantly looking
for ways to improve that.
345. That is 15 per cent empty-running?
(Mr Christensen) Yes. We do that by bringing product
back from supply. Previously, when I first started in this industry
25 years ago, we used to deliver to a store and then come back
empty and take the next load out. It is not like that anymore.
If you see a Safeway lorry on the road, it is performing a useful
function, it is either bringing recyclable material—cardboard,
plastic bottles, aluminium tins, whatever—back to the distribution
centre for recycling, or it is bringing product back from the
manufacturer's factory into the distribution centre for re-delivery
back out to the stores.
Chairman
346. Mr Christensen, since you came into
the industry has there been a drop in the average distance travelled
between the depot and the stores?
(Mr Christensen) I would say that there has, because
the number of stores which there are has significantly reduced
across the country. When I first came into the industry, 26 per
cent of product which went onto the shelf in the supermarket was
delivered through central distribution and 74 per cent was delivered
by direct deliveries. When we ourselves, Sainsbury, Tesco and
everyone else invested millions and millions of pounds in central
distribution—a large distribution centre costs about £40
million—then we took literally hundreds of lorries off the
road by going through central distribution. The supply chains
in this country, you have to understand, are the most efficient
in the world. I get people coming from America and Australia.
347. What I am asking you is, are they also
the most elongated?
(Mr Christensen) No.
348. You are sure of that?
(Mr Christensen) Yes, I am sure of that.
Mr O'Brien
349. Can I change the subject slightly and
refer to the policy of the FTA to the carrying of freight on rail.
You are on record as supporting the carrying of freight on rail,
are you not?
(Mr Christensen) Absolutely.
350. Also the `piggy- back' procedure is
one which is high in the frame, is it not?
(Mr Christensen) Yes.
351. The rail companies are frowning on
that, though, particularly Railtrack. What is your view as to
the future of `piggy-back' and transporting of freight, not just
in the United Kingdom but into Europe?
(Mr Hookham) We are naturally disappointed that
the final analysis is beginning to suggest that this might not
be a cost-effective means of delivering goods. That is for the
railways to establish. I do not think we want decisions to be
made unless they are going to be durable and work properly. We
do not want these decisions to be fudged. What we are looking
for is capacity in the railway network. The railway network suffers
many similar problems to the road network, it needs a lot of investment,
there are a lot of bottlenecks and there are issues of competing
for track space. So whether it goes by enhancement of the `piggy-back'
gauge routes or by development of other routes, what we need to
see is new freight capacity in there, new paths for trains such
that they do not compete with passenger trains and that freight
is given the priority which it deserves, given its essential nature
in the economy. Whether that is achieved by enhancing the gauge
on the West Coast Main Line or by developments of other freight
route strategies as Railtrack have indicated, that is for them
to present to their customers and potential customers as an offer
which hopefully will interest us.
352. Has the FTA done any research as to
the `big box' container which rail companies and Railtrack are
pushing? They are saying that it is less expensive than making
the changes for the `piggy-back' procedures. Have you done any
research as to the effect of not continuing with `piggy-back'
with our trade into Europe?
(Mr Hookham) I think that clearly if it is possible
to be able simply to lift a trailer off the road and put it on
a railway vehicle, that has great attractions, because it does
not require unduly complicated extra equipment, and that was one
of the great attractions of `piggy-back'. However, we do recognise
that there is investment here and that needs to be deployed to
maximum effect. Whether that money is from Railtrack, from private
investment or indeed support from Government, that needs to be
spent in a way which maximises capacity, and it could well be
that that is `piggy-back'.
353. What is the relationship between our
freight service and Europe? There has to be a blend. We have to
have a system where our freight can go straight into Europe without
any problems.
(Mr Hookham) I absolutely agree with that, and
the most persistent interest that we hear from our members in
respect of rail freight is on the international front. The scope
to aggregate traffic, bringing it into the country and indeed
exporting it by rail, is now under active consideration in a number
of sectors, including the retail sector. Mr Christensen has first-hand
experience of that. Whether that is achieved by the `piggy-back'
method or whether by perhaps more conventional intermodal technologies,
that is really for the railways to sort out.
354. What does the FTA feel about this question?
If we moved away from `piggy-back', do you think that would be
detrimental to the scheme, or are you satisfied that the `big
box' container unit will meet the demands of certain people in
our country going into Europe?
(Mr Hookham) I think there is a lot of experience
of moving `big boxes' into Europe. The `piggy-back' technology
has not been available before, so I suppose the short answer is
that we do not know, we would have to guess at that. What is certainly
clear is that the greatest potential does exist on the international
routes, and that traditionally has been the swap bodies.
Mr Donohue
355. In your submission you indicate that
you represent some 50 per cent of the operators of the road and
90 per cent of the rail operation as far as freight is concerned,
do you not?
(Mr Hookham) Yes.
356. What proportion of your business, Mr
Christensen, is based on rail?
(Mr Christensen) A very small percentage at this
time, but that is not because we do not want to pursue it. In
fact, you have probably read in the press last week that we have
just had a grant from the Scottish office to deliver, in the manner
that has been described by Mr O'Brien, a large box operation up
to the north of Scotland from Glasgow, for onward delivery to
our stores in the north of Scotland. I am very proud that we are
leading the way in that. Again I would come back to the point
that all my experience over the years is that the more flexible
you can be, the more chance you have of succeeding. So I do accept
the point which was raised by Mr O'Brien that `piggy back' plus
`big boxes' would perhaps be the best way forward, but then you
have to make the necessary gauge changes, etcetera, to achieve
it. The big opportunity for rail freight in this country, in my
opinion, is trans-European rail freight. We are already looking
at bringing produce in from the south of Spain, wine from Italy,
wine from France, and using the railways, but the equipment in
terms of temperature control is not there at the minute, and you
need temperature control. Therefore, the `big box' scenario, with
temperature control equipment, etcetera, on it, is the only way
forward at the moment, because we cannot `piggy back'.
357. So you are of the opinion that as an
organisation you will still be more likely to embrace the road
truck rather than the rail?
(Mr Christensen) Yes.
358. I heard you earlier talking about drivers,
and not once did anybody mention anything to do with the efficiencies
which there are to the emissions if you were to travel by train
by comparison with any form of road transport.
(Mr Christensen) I totally accept that, but there
are certain things which you cannot deliver by rail. For example,
you cannot deliver to a petrol station by rail, you cannot deliver
to most supermarkets by rail. Where those opportunities are there,
they will be exploited. As I keep saying to everyone, I am President
of the Freight Transport Association not the lorry transport association,
and I am Logistics Director of Safeway not the lorry director
of Safeway. My job is to find the most efficient way of transporting
things. So I am interested, and passionately interested, in all
means of transport and cleaning the environment.
Chairman: You are
warmly welcome here, Mr Christensen. You must be very unique in
your industry.
Mr Donohue
359. Has your Association estimated the
efficiency savings which would be gained if there were to be general
introduction of the 44-tonne truck?
(Mr Hookham) Yes, we have. Our figures suggested,
at the time we did the calculations, that some 9,000 vehicles
could be saved, with consequent savings in mileage and emissions
in that way. That simply follows from the fact that you could
stroke the owners to put more payload onto the back of existing
lorries within existing dimensions and therefore reduce the number
of journeys to be made to deliver a given payload and a given
quantity.
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