Examination of witnesses
(Questions 380 - 393)
WEDNESDAY 9 DECEMBER
MR JAMES
HOOKHAM, MR
LAWRENCE CHRISTENSEN
and MR GEOFF
DOSSETTER
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.
Chairman
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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