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

Examination of witnesses (Questions 380 - 393)



  380.  So you would be prepared then maybe to move your ground slightly?
  (Mr Hookham)  Absolutely, in a structured context. Where I think we start from is that it is simply not credible to believe that you can price this traffic off the road. It is an essential traffic within the towns and cities, and one which presumably local authorities are looking to encourage to bring trade back into the centres of those towns and cities and make them more efficient. So it is finding routes in which you can make investments to achieve your gains. We do not start from the principle that this traffic can somehow be priced off the roads.

  381.  Can you tell us how much it is costing industry, let alone the rest of us in the environment, for HGV vehicles being in congested areas?
  (Mr Hookham)  As I say, the figure which we use is £20 billion.

  382.  That is a significant amount of money, is it not?
  (Mr Hookham)  Yes.

  383.  How much of that do you think you could save by coming in with everyone else, should we introduce road charging policies so that we can maintain traffic flow?
  (Mr Hookham)  I think the key thing is not so much whether the cost savings directly accrue, it is whether the efficiencies which the activities of the lorries are trying to achieve come through.

Chairman:  I think we are clear about the problems. I want to move on to Mr Randall.

Mr Randall

  384.  Perhaps I can address this to Mr Christensen particularly. Bearing in mind the nature of the trade you are in, I would have said that there is a conflict—Mr Hookham just mentioned this—that because of the nature of the trading of food outlets, having them in the centre of town, if you wanted to have rail to take freight, that is going to be very difficult where rail does not exist; whereas there may be a presumption, therefore, that it might be more advantageous to do it out of town where you might be able to put it alongside an existing rail link. What impact would you yourself, as a Logistics Director, have on planning of new stores first of all?
  (Mr Christensen)  I have none personally, but part of my technical team is part of the store planning team, so that is part of it. If I give the example of Scotland, just to show you that I am very pro-rail where we are able to use it, whilst the railway does not actually run into our stores in the north of Scotland, we found a cluster of stores in the north of Scotland, as an initial kickoff, which are close to a railhead. We have a railhead in remote Scotland, and at Mosshead in Glasgow or near Glasgow we have that railhead running into our distribution centre there, so we send the loads up to the north of Scotland, cutting out lorry journeys and everything running through the central belt, etcetera, then lorries take the boxes off the railway at the railhead and deliver to the stores. So it is those kinds of opportunities we are talking about, not actually getting the railway alongside the stores.

  385.  So there is always going to be a conflict, particularly if the Government—and I think most people would agree with this—are trying to get people back into town centres and city centres, that from a logistical point of view, from the point of view of your membership, it is going to be very difficult to get a lot of that freight to be delivered by rail, however much you might want it to be more efficient?
  (Mr Christensen)  Yes.

  386.  It is going to be difficult, is it not?
  (Mr Christensen)  Yes.
  (Mr Hookham)  It will always be part of a multi-modal journey. Where loads can be brought together to make up viable trainloads, that is something on which the FTA are certainly insisting its members try to make use of those opportunities. For the reasons you identify, there will need to be very good connections into the final road distribution, because that is the mode around which most stores have been built.

  387.  Finally, then, it would not be true to say that in an effort to get more freight onto the railway, there would be an effort by your company or your membership to advocate more out-of-town centres?
  (Mr Hookham)  No, I do not think so. I think they are very expensive. There is a presumption against those, as we know, in current government planning policy. To take on this point about what is the role for the railways, I think the real challenge for the railways in an integrated transport context is for them to work alongside existing supply chains which, for reasons which I think are clear, are built around road transport. There is a big appetite to look at use of rail where it is viable, but our original maxim holds that it has to be one which delivers improvements to the supply chain or at least does not damage it, in order to work efficiently and durably as part of logistics services in this country. The railway companies need to work alongside and within supply chains, rather than attempt to substitute for them.

Mr Stevenson

  388.  I would like a bit of clarification on rail freight targets, please. In your submission you refer to "The ambition to `transfer more freight from road to rail' needs to be translated into a formal strategic plan." Could you briefly indicate what are the main elements which should be in that plan to achieve those objectives?
  (Mr Hookham)  Yes, of course. We see this as being a very important task for the Strategic Rail Authority, now that more detail has emerged on how that body might work, since we wrote our original evidence. Of course, if that Strategic Rail Authority is to introduce the freight argument and attempt to achieve some recognition of the need for freight and its priority, then it needs to be clear about what we are trying to achieve. I think we need now to move on from simple multiples of existing traffic and try to identify—obviously with the operators—where they think that growth in traffic is going to come from. That will help them to send signals to the market as to where they are going to invest technology in the market. We heard about technology being important in retail. So there are very clear signals to our members as to what to do and as to where rail is going to be.

  389.  So your formal plan would be a series of signals?
  (Mr Hookham)  Absolutely.

  390.  The last question I want to ask is, in the same paragraph you say that "Any assumed rates of increase in road freight costs in order to achieve these targets should be established." As I read that, I assume that you accept that increase in road freight costs has a role to play in establishing those objectives?
  (Mr Hookham)  No, not at all.

  391.  You say, "Any assumed rates of increase in road freight costs in order to achieve these targets should be established." That is what it says.
  (Mr Hookham)  Yes indeed, and what we are very concerned about is that our ambitions in terms of the growth of road rather than rail are not because of being anti-rail, and I do not want the Committee to get that impression. That simply imposes more costs on business which will continue to use road transport as its dominant means of distribution, as we have already described, but even with the railways at full capacity, that dominance is still going to continue. It will simply load more costing onto them. We believe that a lot of the growth of rail freight can be brought about by the railways working more closely with customers, getting them to understand their logistics and so on, rather than attempting to substitute for them, as appears to be the tactic at the moment.


  392.  Mr Hookham, are you aware of the EU targets on the reduction of CO2?
  (Mr Hookham)  Yes, of course, Chairman.

  393.  Are you convinced that your Association has any role to play in achieving those targets?
  (Mr Hookham)  Absolutely, in very practical terms which we have described in our written evidence and which I have mentioned already.

Chairman:  Thank you very much, we are very grateful to you.

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