Select Committee on Environment, Transport and Regional Affairs Minutes of Evidence

Examination of witnesses (Questions 340 - 359)



  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.


  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.


  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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