Select Committee on Environment, Transport and Regional Affairs Fifteenth Report


FIFTEENTH REPORT

The Environment, Transport and Regional Affairs Committee has agreed to the following Report:—

THE ROAD HAULAGE INDUSTRY

1. The road haulage industry has rarely received as much attention as it has during the past year. For a number of months after the 1999 Budget, hauliers mounted a vigorous campaign against what they perceived as unfair levels of taxation, particularly on fuel and Vehicle Excise Duty,[9] which included attempts to disrupt the flow of traffic in cities and towns, and on motorways.[10] At the same time, trades unions have waged a high-profile campaign to reduce the hours worked by bus and lorry drivers.[11] In addition, public concern about the impact of heavy lorries on the environment, particularly their passage through residential areas and through rural communities has continued to increase.[12]

2. It was against this backdrop that the Transport Sub-committee decided, at the beginning of January 2000, to undertake a wide-ranging and thorough inquiry into the road haulage industry. We resolved "to examine (a) the role of the road haulage industry, the way in which it operates, its contribution to the economy of the United Kingdom, and its impact on the environment; (b) the impact on the industry of current and past rates of vehicle excise duty and levels of duty on fuel; (c) the regulations which govern the industry, and their impact on the safety record and profitability of the industry; and (d) what changes to Government policies affecting the road haulage industry are needed to benefit the economy and the environment".[13] We agreed to do so particularly in the context of comparisons with other European Union States.

3. In all, we received written memoranda from forty-nine organisations, including groups which represent hauliers, such as the Road Haulage Association, the Shadow Road Haulage Forum[14] and the Freight Transport Association, individual haulage companies, those campaigning for the development of rail freight, trades unions, professional bodies, and the Government. We took oral evidence on four occasions between 8 March and 29 March, during which we examined witnesses from fourteen different organisations. We are most grateful to all those who submitted evidence or otherwise assisted us during our inquiry.

THE ROLE OF THE ROAD HAULAGE INDUSTRY

4. In a developed economy like that of the United Kingdom, an efficient means of distributing freight is essential: as the Department of the Environment, Transport and the Regions has said, "this country needs an efficient, cost-effective system of goods distribution so that it can compete successfully in an international market and deliver a good standard of living at home".[15] Without an efficient means by which to transport raw materials to factories, to manage materials within the plant, to deliver manufactured products to warehouses and other distribution centres, and finally to distribute goods to the point of sale, and on to the consumer, no economy can properly function. In the United Kingdom we are fortunate to have what the Freight Transport Association claimed is "the most efficient national logistics operations in the world",[16] which is, the Government told us, "a world leader in logistics supply chain management".[17]

5. As well as making a vital contribution to the economy as a whole, the distribution, or logistics, industry makes up a sizeable sector of the economy in its own right. By itself the logistics sector accounts for almost 4 per cent of gross output in the United Kingdom, valued at approximately £55 billion each year.[18] The number of people employed in the industry is a matter of some debate: the Government says that more than a million people, or three-and-a-half per cent of the total workforce, are employed in the sector,[19] whereas the Road Haulage Association claimed that "road transport, vehicle manufacturing and related industries employ well over 2,000,000 people; 3.8 per cent of the total population and more than 8 per cent of all employed people",[20] and the Lex Transfleet Report on Freight Transport 2000 states that "the British freight industry employs around 1 million people, part of the 7.5 million people involved in the whole of the distribution industry (28 per cent of all employment)".[21]

6. During the past few decades there have been widespread changes in the United Kingdom's economy. From being dominated by heavy manufacturing industries, mining and agriculture, which required a logistics sector to cope with the transportation in bulk of raw materials and finished goods, the economy is now focussed on the service and high technology manufacturing sectors, and thus transport is required for much lighter, higher-value goods. Consumers enjoy a vastly expanded range of goods, the supply of which must be organised to a much more geographically dispersed market.[22] Companies now prefer to have much smaller stockholdings, and require frequent deliveries to be made at the time when new products and raw materials are required.[23] In short, there is a demand for flexibility which suits the road haulage industry and which other transport modes, such as rail, are less able to meet. Moreover, it is a truism that every "product which is moved by rail starts and finishes [its journey] by truck".[24] In the future, demand for road haulage looks set to be bolstered by the growth of 'e-commerce', which will increasingly require frequent, rapid deliveries of lightweight goods to a wide range of locations, including of course homes.[25]

7. Road haulage has become the dominant mode of freight transport. In 1953, only 36 per cent of tonne kilometres of freight were transported by road, whereas it now carries approximately 65 per cent of the total number of tonne kilometres covered by all modes of transport.[26] Moreover, road haulage has taken a much larger share of a market which has itself grown steadily: since the early 1950s the total number of tonne kilometres transported has increased by 276 per cent, to almost 250 billion tonne kilometres.[27] Thus approximately 160 billion tonne kilometres of freight are carried by road each year.[28] By contrast the rail freight industry experienced "forty years of decline"[29] from the early 1950s. In 1952, 42 per cent of total freight tonne kilometres were carried by rail,[30] whereas by 1994-95 rail accounted for only 6 per cent of total freight movements, or 13 billion tonne kilometres. Since then the rail freight industry has grown somewhat,[31] so that in 1998-99 it carried 17.4 billion tonne kilometres.[32] Even so, less than 7 per cent of all freight tonne kilometres carried in the United Kingdom are transported by rail.[33] It is generally accepted that one of the primary reasons for the decline of rail freight is the result of "its inability to respond to or compete with the flexibility, prices and competition from road haulage".[34]

8. The road haulage industry is made up of a large number of small companies, and individual self-employed drivers, and a very small number of large operators. There are 108,000 licensed heavy goods vehicle (HGV)[35] operators in the United Kingdom, 90 per cent of whom have fleets of five or fewer vehicles, and 50 per cent of whom operate only one vehicle.[36] In 1998 there were in this country 419,000 licensed heavy goods vehicles in total, and two million light vans.[37] Sixty per cent of the activity of heavy goods vehicles is the carriage of goods for hire or reward, whilst the remainder is 'own-account', the carriage of goods by the in-house fleets of lorries of major companies such as Tesco or BP-Amoco.[38]

9. The number of heavy goods vehicles has remained approximately the same since the end of the Second World War.[39] The rise in total tonnage transported is accounted for by the fact that vehicles now carry much heavier loads: the Lex Transfleet Report on Freight Transport 2000 points out that the "standard workhorse for road freight transport in Britain and Europe" is now the 38- or 40-tonne articulated lorry.[40] Not only are lorries heavier, they are used very intensively: the typical distance covered by a truck during a year is between 40,000 and 70,000 miles.[41] Moreover, it is anticipated that the amount of lorry traffic will rise steadily during the next ten to fifteen years. If there is no change in Government policies, the number of vehicle kilometres travelled by lorries is expected to rise by 16 per cent between 1996 and 2006, and van traffic will rise by 29 per cent over the same period. By 2011, lorry traffic will have risen by 25 per cent, and van traffic by 44 per cent, compared to 1996 levels.[42]

10. Hence the importance and the scale of the road haulage industry is clear. As the Road Haulage Association told us, the "road haulage industry plays a pivotal role in the United Kingdom's economy".[43] An advanced economy must have an efficient and effective means of transporting raw materials and goods, and, unlike other modes of transport, road haulage offers the flexibility required by a modern economy. The importance of the industry's role is demonstrated by the close correlation between the number of freight tonne kilometres covered each year and the level of the country's gross domestic product: the success or otherwise of the economy can be measured in the degree of demand that exists for road haulage.[44]

THE EFFECT OF THE ROAD HAULAGE INDUSTRY ON THE ENVIRONMENT

11. The road haulage industry makes a significant contribution to pollution. Heavy goods vehicles make up less than two per cent of all vehicles,[45] but because they are more heavily used than most vehicles they account for 7 per cent of all vehicle kilometres travelled in the United Kingdom. Nevertheless, they are responsible for 32 per cent of all emissions of nitrous oxides from vehicles and 42 per cent of emissions of PM10 fine particulate matter.[46] They also account for 24 per cent of the total amount of carbon dioxide generated by road transport.[47] Moreover, the environmental record of road haulage compares poorly to that of rail freight: it has been claimed that, per tonne kilometre, rail produces less than 25 per cent of the carbon dioxide produced by road transport, and one third the amount of nitrous oxide.[48]

12. As well as generating pollution, lorries affect the environment in other ways. For example, as the Government pointed out, "noise from heavy goods vehicles can be intrusive, especially at night or in sensitive urban areas".[49] In rural areas there is concern about 'rat-running' by large lorries along roads not suited to such vehicles, which can "damage road surfaces, disturb the tranquillity of the countryside and intimidate vulnerable groups, such as pedestrians and cyclists".[50] Large, slow-moving lorries also cause congestion in towns and cities, particularly when manoeuvring through narrow streets.

13. It is generally accepted that the road haulage industry does pollute and cause nuisance. Nevertheless, several of our witnesses drew attention to the steps taken by the industry and the Government, particularly in recent years, to improve the situation. The Lex Transfleet Report on Freight Transport 2000 says that "while it is true that road freight activity does generate pollution, standards have been raised over time and goods vehicles emissions are now at much lower levels than in the past ... Much of this change has been brought about by technology, driven by competition, but also by a series of increasingly exacting rules and regulations brought in throughout Europe".[51] It cites evidence that the total emissions of nitrous oxides and PM10 particulates from goods vehicles peaked in 1990, and have fallen by more than half since then.[52] The Freight Transport Association told us that "the environmental impact of goods vehicles continues to fall due to the introduction of newer less polluting vehicles and more efficient distribution systems which optimise vehicle usage".[53]

14. A number of policies are responsible for reducing the environmental impact of heavy goods vehicles. From April 1991, new limits on pollution in the United Kingdom required the manufacturers of diesel-powered heavy goods vehicles to fit emission control equipment to cut emissions of carbon monoxide and nitrous oxides by 20 per cent below the level then generally being met by the haulage fleet, and emissions of hydrocarbons by 30 per cent.[54] In October 1993 standards set by the European Union, known as 'Euro I', came into force, which aimed to reduce the permitted level of carbon monoxide emissions by 60 per cent, hydrocarbons by 50 per cent, and nitrous oxides by 45 per cent.[55] The 'Euro II' standards, introduced in October 1996, cut the particulate limit by more than a half, and required further reductions in nitrous oxide emissions. The Government says that the "industry responded to these challenges by increasing the use of turbocharged, charge-cooled, electronically controlled systems".[56] These changes to the limits for emissions have been coupled with active enforcement measures by the Vehicles Inspectorate.

15. The Government claims that "progressive tightening of emission standards, together with improvements in fuel quality, is leading to a significant reduction in pollution from heavy diesels as the existing heavy goods vehicle fleet is renewed. By 2005, emissions of particulates will have been cut by two thirds and nitrous oxides by half compared to 1995 levels".[57] However, as we have pointed out, the use of heavy goods vehicles is expected to grow sharply during the same period. Consequently European Union member states have adopted new emission limits. From October 2001, new 'Euro III' limits will come into force, which aim to reduce emissions by a further 30 per cent.[58] Additional reductions beyond 'Euro III' have already been agreed.[59]

16. Improvements in engine technology have been supported by attempts to reduce pollution through improving the quality of fuels used by heavy goods vehicles. For example, after the 1998 Budget the duty levied on a litre of ultra-low sulphur diesel was two pence less than for conventional diesel,[60] a decision intended to "ensure that this fuel [ultra-low sulphur diesel] continues to offer significant improvements in urban air quality".[61] The effort to encourage the use of ultra-low sulphur diesel has proved successful: in the 1999 Budget, the Chancellor was able to report that "by the end of the year, almost all producers will have switched to this cleaner fuel [ultra-low sulphur diesel]. This alone will cut their emissions by 20 per cent".[62] Moreover, the European Union has established strict controls on the quality of diesel which came into effect on 1 January 2000.[63]

17. Operators themselves, with the encouragement of the Government, have taken a number of practical measures to reduce the pollution and nuisance caused by lorries. The Cleaner Vehicles Task Force, which is chaired by the Minister for Transport, and which includes representatives of vehicle manufacturers, fuel suppliers and trades unions,[64] is intended to "promote environmentally friendly vehicles that people and businesses will want to buy and to use ... vehicles which are cleaner, quieter, more fuel efficient and less resource intensive; improve the environmental performance of the existing vehicle stock; and in addition encourage the use of cleaner fuels; and promote more environmentally friendly driving styles".[65] The Task Force has recommended a number of measures to improve the environmental performance of the existing fleet of vehicles, including better maintenance and the retro-fitting of devices such as particulate traps.[66] The Government has also supported an advisory group on 'body rattle' to try to reduce the level of noise generated by heavy goods vehicles;[67] in addition, new restrictions have been placed on the noise generated by engines, brakes, and by the interaction between tyres and the road surface.[68]

18. As well as seeking to reduce emissions and limiting noise and other nuisances, steps have been taken to improve the efficient use of diesel and other fuels by lorries, and thus cut carbon dioxide emissions, conserve finite fossil fuel stocks, cut costs, and allow operators to be more competitive. Efforts have also been made to ensure that vehicles are used as efficiently as possible by, for example, ensuring that outward loads make optimum use of a lorry's capacity, and by encouraging hauliers to find loads for their lorries on return journeys, once a delivery has been made, thereby minimising 'empty-running'. Now, according to the Lex Transfleet Report on Freight Transport 2000, 80 per cent of lorry fleets use between 71 per cent and 100 per cent of each lorry's capacity on its outward journey, and 36 per cent of the fleets surveyed used all of their capacity.[69] However, although 78 per cent of vehicles return with a load of some sort, only 39 per cent of trucks use more than half of their capacity, and fewer than one in six is fully loaded.[70] Thus, although the Freight Transport Association told us that the road haulage industry had introduced "more efficient distribution systems which optimise vehicle usage",[71] it is clear that some progress might still be made.

19. In short, considerable steps have already been taken to reduce the impact of lorries on the environment. The Road Haulage Association told us that "trucks are more fuel efficient, emit 80 per cent fewer emissions, [and] do less damage to buildings as a result of improved suspension systems".[72] The Freight Transport Association assured us that "the environmental impact of goods vehicles continues to fall".[73] Moreover, changes in legislation, particularly in Europe, will force the industry to become even cleaner in future. Nevertheless, problems remain: for example, road haulage is a significant, and growing, source of carbon dioxide, the most common 'greenhouse gas'.[74] Thus although welcome steps have been taken to reduce the pollution and nuisance caused by the road haulage industry, the industry continues to be a significant source of pollution, and should continue to improve its environmental record: in particular it should develop policies to reverse the current upward trend in its contribution to carbon dioxide emissions.


9   See Truckers fury at Budget fuel hike, Road Haulage Association Press Notice, 9 March 1999. Back

10   See, for example, Angry truckers snarl up cities, The Guardian, 13 April 1999, and Truckers cause traffic chaos, The Guardian, 18 May 1999. Back

11   See T&G lobby of Commons speaks with one voice to say "cut drivers' hours", Transport and General Workers Union Press Notice PR0138, 1 March 2000, which can be viewed at http://www.tgwu.org.uk/communications/. Back

12   See, for example, 44-tonne lorries may thunder through the countryside, Council for the Protection of Rural England Press Notice, 6 March 2000, which can be viewed at http://www.greenchannel.com/cpre/; see also Sustainable Distribution: A strategy, Department of the Environment, Transport and the Regions, March 1999, para.6.49, which can be viewed at http://www.detr.gov.uk/itwp/susdist/index.htm. Back

13   See Environment, Transport and Regional Affairs Committee Press Notice 08/1999-2000, 14 January 2000, which can be viewed at http://www.parliament.uk/commons/selcom/etrpnt8.htm. Back

14   A group set up at the instigation of the Conservative Party in September 1999 to allow haulage companies, rather than representative bodies such as the Road Haulage Association, to put across the views and concerns of hauliers (RH38). Back

15   Sustainable Distribution: A strategy. Back

16   RH26, p.2. Back

17   RH48, para.9. Back

18   Sustainable Distribution: A strategy, para.25. Back

19   Sustainable Distribution: A strategy, para.25. Back

20   RH22, p.1. Back

21   The Lex Transfleet Report on Freight Transport 2000, February 2000, p.9. Back

22   See Sustainable Distribution: A strategy, para.2.15. Back

23   So-called 'just in time' deliveries. Back

24   Q.2. Back

25   See Sustainable Distribution: A strategy, para.5.52 ff. Back

26   See the comments of the Road Haulage Industry in RH22, p.1; The Lex Transfleet Report on Freight Transport 2000, February 2000, p.9 (Chart 1.2); and Sustainable Distribution: A strategy, p.17. Back

27   Or 155 billion tonne miles; The Lex Transfleet Report on Freight Transport 2000, February 2000, p.9 (Chart 1.1). Back

28   See the comments of the Road Haulage Industry in RH22, p.1; The Lex Transfleet Report on Freight Transport 2000, February 2000, p.9 (Chart 1.2); and Sustainable Distribution: A strategy, p.17. Back

29   HC (1997-98) 286-II, p.184 (Q.761); see also p.180. Back

30   See Bulletin of Rail Statistics: Quarter 3 1999 Data, Government Statistical Service, March 2000, p.15 (Chart 6). Back

31   See Ensuring that Railtrack maintain and renew the railway network, National Audit Office, 12 April 2000, HC (1999-2000) 397, para.9. Back

32   See Bulletin of Rail Statistics: Quarter 3 1999 Data, Government Statistical Service, March 2000, p.14 (Table 6). Back

33   See HC (1997-98) 286-I, para.91. Back

34   HC (1997-98) 286-II, p.180. Back

35   Goods vehicles which weigh more than 3.5 tonnes; see RH48, para.7. Back

36   See RH48, para.7. Back

37   See RH48, para.7. Back

38   See RH48, para.7. Back

39   The Government told us that it had "remained in the 4-600,000 range" (RH48, para.7). Back

40   The Lex Transfleet Report on Freight Transport 2000, February 2000, p.13, note to Chart 2.2. Back

41   See The Lex Transfleet Report on Freight Transport 2000, February 2000, p.62. Back

42   See Sustainable Distribution: A strategy, para.3.7. Back

43   RH22, p.1. Back

44   See Transport of goods by road in Great Britain 1998, p.2, Chart A. Back

45   See Sustainable Distribution: A strategy, para.3.6, and RH48, para.7. Back

46   See Sustainable Distribution: A strategy, para.3.7. Back

47   7.4 million tonnes of carbon out of a total of 33.4 million tonnes of carbon in 1999; see Sustainable Distribution: A strategy, para.3.8. Back

48   See the page entitled Rail's Green Credentials, on the website of English Welsh and Scottish Railway, at www.ews-railway.co.uk/site/about/environmenti.html; the figures quoted are those of J.S. Dodgson, of the Department of Economics and Accounting, Liverpool University (1994); these figures are also given in The Lex Transfleet Report on Freight Transport 2000, February 2000, p.27. Back

49   RH48, para.13. Back

50   Sustainable Distribution: A strategy, para.3.6, and RH48, para.6.49. Back

51   The Lex Transfleet Report on Freight Transport 2000, February 2000, p.26. Back

52   See The Lex Transfleet Report on Freight Transport 2000, February 2000, p.26. Back

53   RH26, p.4. Back

54   See Sustainable Distribution: A strategy, para.6.61. Back

55   See Sustainable Distribution: A strategy, para.6.61. Back

56   Sustainable Distribution: A strategy, para.6.61. Back

57   Sustainable Distribution: A strategy, para.6.63. Back

58   Sustainable Distribution: A strategy, para.6.64. Back

59   From October 2006, 'Euro IV' limits will come into force, cutting carbon monoxide and hydrocarbon limits by a further 30 per cent, and particulates by 80 per cent, an objective likely to be achieved through the fitting of particulate traps. A further 60 per cent staged cut in nitrous oxide limits by 2008 is envisaged under 'Euro IV+'. Back

60   See HC Deb, 17 March 1998, col.1110. Back

61   See Fuel duties increased to improve urban air quality and reduce greenhouse gas emissions, HM Customs and Excise Press Notice No.17 (17 March 1998). Back

62   HC Deb, 9 March 1999, col.181. Back

63   In Directive 98/70/EC of the European Parliament and of the Council of 13 October 1998 relating to the quality of petrol and diesel fuels and amending Council Directive 93/12/EEC; this can be viewed on the website of the European Union at http://europa.eu.int/eur­lex/en/lif/dat/1998/en_398L0070.html. Back

64   A full membership can be found at http://www.roads.detr.gov.uk/cvtf/driving/4.htm. Back

65   Extract from Driving the Agenda, the First Report of the Cleaner Vehicles Task Force, Annex A: Mission Statement. A 'more environmentally-friendly driving style' might include slowing down to improve fuel consumption; driving more smoothly to avoid sudden braking and sharp acceleration, which reduces fuel consumption and emissions and also cuts down on tyre wear; switching off engines when stuck in traffic; ensuring tyres are at the correct pressure, improving the vehicles performance is optimised; and using gears properly to lower fuel consumption: see Driving the Agenda, para.1.6, which can be seen at http://www.roads.detr.gov.uk/cvtf/driving/1.htm#1. Back

66   See Driving the Agenda, para.1.6 ff, and para.1.31 ff. Back

67   See Sustainable Distribution: A strategy, para.6.48. Back

68   See Sustainable Distribution: A strategy, para.6.44 ff. Back

69   The Lex Transfleet Report on Freight Transport 2000, February 2000, p.40. Back

70   The Lex Transfleet Report on Freight Transport 2000, February 2000, p.40. Back

71   RH26, p.4. Back

72   Q.41. Back

73   RH26, p.4. Back

74   See RH48, para.14. Back


 
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