Memorandum by the Transport and General
Workers Union (RH 14)
THE ROAD HAULAGE INDUSTRY
INTRODUCTION
The Transport and General Workers' Union (TGWU) is
the largest trade union in the UK representing workers in the
road haulage industry. Our members in the industry are mainly
drivers of large goods vehicles (LGVs) working for a wide range
of employers including Exel Logistics, UPS, Swifts, Wincanton,
Pickfords, TNT, White Arrow and Parceline as well as smaller hauliers
in the hire and reward sector. A number of members are employed
in oil distribution working for companies such as BP, Mobil and
Shell or their contractors.
The TGWU believes that the lorry will, for the
foreseeable future, remain an integral part of any transport policy.
However we do believe that there is a case for reducing any adverse
impact of road haulage as much as possible. We believe that this
can only be achieved through tighter regulation of the road haulage
industry.
Regulation of the Industry
There are significant environmental costs associated
with the illegal operation of haulage vehicles and the abuse of
regulations generally. In France, it has been noted that if all
legal obligations were observed by haulage operators, road haulage
prices would be a third higher than they are now.
Therefore, the T&G would put forward the
argument that more effective enforcement of the regulations governing
the industry would achieve the aim of ensuring that road freight
process did reflect true costs, including environmental costs.
The T&G would like to see more effective sanctions applied
to those who disregard regulations, including impounding of vehicles
and jail sentences where appropriate.
Haulage Rates
It is clear to the T&G that haulage rates
are at present too low to meet the full costs incurred, including
environmental costs. In recent years, reputable haulage firms
have had to face the threat of undercutting by other less scrupulous
operators, fuelled by the demands of customers such as large retailers
and manufacturers looking for small savings in their transport
costs. This has led to a downwards pressure on haulage rates,
and a knock on effect of the wages and conditions of drivers.
Low pay means drivers have to work longer and
longer hours in order to take home a living wage, and thus driver
fatigue has become a major problem in the industry.
The intensification of work in road haulage
Feelings are running high among all lorry drivers,
that they are being exploited and coerced into too long hours
at work—too few hours away from work to spend with their
families—and the risks they are being put under through
excessive pressures and long hours. Part of the explanation for
this lies in the pressure to achieve high levels of productivity,
which emerges as speeding, skipping meal breaks, skimping on rest
periods and working excessive hours to make up pay.
"Just in Time" type delivery contracts
involve such tight deadlines that drivers are often forced to
cut corners to meet them, especially when road congestion causes
delay. Longer hours and/or greater speeding is the result.
Incentive pay schemes are common in road haulage,
with rates being applied on a mileage basis, or on the number
of trips, or on a percentage of the vehicle's net earnings. Inevitably,
these drivers who will take risks can earn more. The existence
of low basic rates which can be doubled if the driver can halve
the allotted time, so as to run an extra trip, can only be detrimental
to good road safety. Annual earnings, hovering around £10,000
or £200 a week before tax, are thus boosted to a more realistic
level for such a responsible and important job.
DRIVERS' HOURS
Appendix A contains a brief summary of the current
regulations governing drivers' hours. TGWU has long campaigned
for the working day of a professional driver to be limited to
a maximum of 10 hours duty time and a maximum of 8 hours behind
the wheel.
Recent studies have proved that fatigue affects
the ability to drive more so than the consumption of alcohol.
These reports show that moderate levels of fatigue produce higher
levels of impairment than the proscribed and legal limits of alcohol
intoxication. After 17 hours of sustained wakefulness the performance
of someone driving was equivalent of having 0.05 blood alcohol
concentration. This is the limit in most western countries. However
these studies were based in laboratories and so the stress involved
in the driving a lorry to strict timetable can only make the ability
to concentrate and drive safely even worse.
Around a quarter of all accidents on motorways
are thought to be caused by driver fatigue. The Department of
the Environment, Transport and the Regions advises private motorists
not to drive for more than a couple of hours before taking a break.
Yet, for professional drivers, very different limits apply. Under
present regulations, a driver can quite legally drive for nine
hours a day—equating to a working day of 13 hours.
In 90 per cent of all cases in which an LGV
accident is caused by driver error, the problem is related to
fatigue. LGVs account for less than one and a half per cent of
the 28 million vehicles on Britain's roads. Yet, almost 30 per
cent of all road traffic accident deaths have commercial vehicle
involvement. Two people die each and every day in accidents involving
commercial vehicles, equivalent in two weeks to the single most
tragic railway accident for almost 50 years, that at Ladbroke
Grove.
A quarter of all traffic fatalities in 1995
involved haulage vehicles with 126 LGV drivers being killed. Yet
LGV drivers are amongst the best on the road. They are required
to pass a more stringent test than most road users and the livelihood
of drivers employed by sizeable firms depends on maintaining excellent
driving skills and good roadcraft behaviour.
The only inherent weakness of professional drivers
lies in medical circumstances. Because of the sporadic nature
of their rest periods and sometimes poor quality of cab comfort
drivers suffer Sleep Apnoea making them seven times more likely
to have an accident. The more a driver skimps on sleep, the more
vulnerable he becomes. It is invariably smaller operators and
owner drivers who are guilty of driving misdemeanours, albeit
a small minority of these. What are the factors which underlie
this problem?
Only about a half of LGVs display high intensity
rear fog lamps and many vehicles are so dirty—reflecting
the cost cutting refusal of many small operators—that they
are obscured. Cut-throat competition, leading to tiny profit margins,
provides the explanation for casualness in the light of danger.
Improved fleet risk management procedures and regular defensive
driving training are critical to improving the industry's safety
record. Yet cuts in Vehicle Inspectorate funding have reduced
the chances of being caught breaching regulations. There is evidence
of wholesale defrauding of the tachograph rules. It is not unheard
of for drivers to "change" names three times a day to
falsify their vehicle's tachograph records.
An example of the unacceptable pressure of work
being imposed upon UK lorry drivers is illustrated in the June
1999 issue of the trade journal—"TRUCK". The article
highlights a company which has carried out research into the impact
the Working Time Directive will have on the business of the company
and concludes their hub-and-spoke service would be threatened
by its introduction.
Currently, the company operates 226 vehicles
on current levels of work, and to maintain the service provided,
the company would require a fleet totalling 594 vehicles if their
drivers were limited to a 48 hour working week. An increase of
368 more vehicles. What is to be deducted from these statistics?
Their drivers would work 28,512 hours per six day week (549 x
48 = 28,512).
Does the current fleet of 226 vehicles produce,
either by hours worked or hours generated by incentive bonus schemes,
28,512 hours work? Each vehicle/driver is either actually physically
working 21 hours per day on a six day working week, which would
total 126 hours per week—(totally impossible of course,
since there are only 168 hours in a week). Or those drivers and
vehicles are generating 21 hours productivity daily—every
day—every week. Therein lies the awful danger-laden, the
health-sapping risk and threat which jeopardises the health and
safety of everyone concerned.
The industry should be looking at methods of
getting most out of the vehicle to off-set the extra costs of
reducing the hours of individual drivers. Double-shifting each
vehicle would go some way. What about introducing into the industry
a four day week on 12 hours per day? What about exploiting the
15 and a bit hour day? 3 x 15 and a quarter hours = 46 and three
quarter hours. That would require two drivers' wages.
The issue of drivers' hours cannot be considered
in isolation as it is related to the low pay characteristic of
the road haulage industry. It is our view that ultimately salary
structure will have to replace today's payment systems. We believe
that employers could devise new systems of work to fit the 48
hour week envisaged by the Working Time Directive.
Such systems would make a mockery of the above
quoted company's statement that is will need to acquire some 368
extra vehicles to service their current levels of need. Indeed,
that company would not need to acquire even a fifth of these extra
vehicles.
The Working Time Directive
The TGWU is most supportive of the Working Time
Directive and looks forward to its application to transport workers,
including lorry drivers. The Directive will act to curb the extent
to which transport workers, including lorry drivers exceed 48
hours of work in a week, therefore reducing the risk to their
health. There is a substantial body of scientific evidence going
back many years linking ill health and long working hours, and
suggesting that working over 48 hours a week doubles the risk
of coronary heart disease.
Reducing the ill health associated with long
working hours will also have benefits to the general community
in the form of reduced health costs. It will also reduce employers'
costs, for example in relation to medical severance and early
retirement due to ill health. The application of the Directive
to transport workers will also improve road safety, which will
be of benefit to the general community as well as to employers,
due to a reduction in costs related to road traffic accidents.
All groups in society will benefit in the long term from the application
of the Directive to transport.
Another reason why the Directive is important
in the context of this inquiry is that is will act to promote
fair competition in the road haulage sector. The sector, both
in this country and in other Member States is characterised by
its highly fragmented nature and a history of illegal operation.
Unfair competition, often based on a disregard of safety regulations,
has been and continues to be a major problem. The Directive will
help create a level playing field across the sector therefore
avoiding possible distortions in competitions and discouraging
further fragmentation of the sector into smaller individual units.
The TGWU urges the Select Committee to recommend
to the Government that the proposal to extend the Working Time
Directive to transport workers should be supported at a European
level.
Fuel excise duty
The UK has by far the highest diesel duty rate
in the whole of the EU and concerns exist as to whether a level
playing field exists, given that since July 1998 there are no
longer any restrictions on cabotage operations within the EU.
It has been argued by some in the industry that
a rebate should be accorded to "essential users", defined
as licensed operators. The difficulty with this approach is that
it will be seen by the Treasury as a blank cheque. Failing to
locate a Haulage Fuel Duty Rebate (HFDR) within the wider context
of the Government's Integrated Transport Strategy, or the general
case for providing a level playing field within the sector, is
likely to make the demand doomed to fail.
Haulage is underpriced and subject to far too
much unfair competition within the sector. This is the first problem
to overcome. If HFDR were applied to addressing this problem,
then a serious political case can be made for special treatment.
There will be little value, in the eyes of the Government, in
merely lowering the costs of the industry if this results in more
lorry miles for the same, or more, quantity of freight carried.
Far too many hauliers are operating at a low level of productivity,
with many vehicles running only partly laden.
To say the HFDR can be verified through tachograph
scrutiny will not address this problem. Essential users need to
be defined by a different mechanism which allows for economic
and environmentally sound haulage. Such a mechanism would need
to be handled through the Traffic Commissioners. If only because
sanctions concerning the existing Bus FDR (BFDR) are presently
administered by them. (Up to 25 per cent of FDR can be lost by
order of the Traffic Commissioners as a penal measure in certain
circumstances).
Such a new mechanism for HFDR could however,
only by verified nationally, requiring some sort of coordinated
role for the Commissioners. This is so because hauliers frequently
move across Commission boundaries.
HFDR, in these circumstances, would be claimable
because a demonstrable case has been made that no economically
or environmentally competitive alternative to the loads being
carried exists. An obligation would be on hauliers to manage their
logistics in a way which is compatible with the aims of the Integrated
Transport Policy. The key question is one of journey efficiency
compared to operating costs.
It has been claimed that such a rebate would
save 26,000 haulage jobs by 2002, out of the one million total
workforce. Notwithstanding that there needs to be a serious tri-partite
analysis, between Government, employers and unions, on the nature
and scope of this claim.
There is a proposal for an electronic tachograph
from the EU Commission. Doubts still exist whether this can be
relied upon to be more effective in "policing" infringements
of the driving hours rule. Nonetheless, the EU Commission is confident
these problems can be resolved and it is likely that the Member
States will move towards its adoption. The technology involved
could certainly make the operation of a HFDR more manageable on
a national basis, since drivers would frequently download the
computerised information at base.
This raises the question of the main purpose
of both the chronometer and electronic tachograph—the application
of the drivers hours regulations. The debate about the EU Road
Transport Working Time Directive cannot be divorced from this
question. If working time were reduced and if the driver-vehicle
ratio were more productively applied, then the worries about major
job losses need not apply.
Lorry drivers commonly work a 60 hour week.
A ten per cent reduction in these hours would not only benefit
their health and welfare, but would also be a positive road safety
measure. Such a reduction would surely be job creating in character,
26,000 jobs at risk from high FDR out of one million could surely
be swallowed up by this? We propose, therefore, that essential
users able to claim HFDR also be checked by electronic means that
they are observing existing Hours Rules as a condition of receipt
of the rebate.
But this concept cannot be even entertained
until the impasse concerning the Working Time Directive is resolved.
Employers in the industry must face up to the fact that they will
not get something for nothing. Linking a more enlightened view
on working time to HFDR is, in our view, the answer.
If the concept of HFDR is seen as politically
acceptable in the light of the foregoing, what should the rebate
be calculated at? Saying that it should be equivalent to the difference
between the UK and the European average of fuel excise duty is
simply unachievable.
How then to calculate HFDR? The current Bus
FDR begins as a single sum allowed for by Government. Presumably,
a similar approach would be adopted by the Government in respect
of our proposed HFDR.
There is therefore a need to introduce an element
of quality into licensing as a quid pro quo for alleviation of
fuel excise duty. We propose that economic models be developed
which quantify the optimum mileage rate at which a sound, logistically
motivated and regulation-following operator can be expected to
function. A single, national mileage rate consistent with good
economic and environment principles is needed. The fair cost of
haulage, allowing for competition in services, reliability and
quality, could then be related to the new HFDR. Operators providing
haulage rates below this fair mileage cost would not be allowed
HFDR, whether this is on the basis of hire and reward or own account.
It could be possible for the Treasury approved
HFDR level to also be subject to levies. It is not acceptable
that some unscrupulous operators are not involved in spending
money on their own training programmes but rely on poaching from
others. Moreover, there is a serious shortage of skilled labour
in the industry. A proportion of HFDR should be siphoned off to
create an effective national training regime in the sector.
One effective way to obviate high labour turnover
situations is to introduce decent pensions provisions, with quality
early retirement and medical severance provisions. The haulage
industry is not generally good at this. In Australia, we are aware
of a single, national occupation pension scheme, a multi-employer
scheme, for all haulage drivers. HFDR could also be levied to
provide a common employer contribution from all recipients of
the rebate to such a scheme for the UK, with appropriate employee
contributions. Hauliers with a comparable, or better, scheme,
could either be provided with exemption certificates or, alternatively,
transfer arrangements could be facilitated.
Simply demanding tax rebates for hauliers because
they are feeling the pinch is no substitute for a reasoned and
coherent solution to the many problems in the industry. The T&G
has set out here a range of inter-related ideas and proposals
to address these problems, in the spirit of debate.
February 2000
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