Memorandum by the Freight Transport Association
(EU 07)
FREIGHT TRANSPORT
ASSOCIATION
Freight Transport Association represents the
freight transport interests of UK industry. Its membership includes
large blue chip multinationals, major third party logistics providers,
own account operators which carry their own goods and small hauliers.
FTA has in excess of 10,000 members which operate over half of
the 430,000 hgv fleet in the UK. In addition members consign 90%
of all rail freight in the UK and are responsible for 60% of the
nation's visible trade.
THE CONTRIBUTION
OF LOGISTICS
TO THE
EUROPEAN UNION
The free movement of goods is a founding principle
of the Treaty of Rome. It also matters a great deal to businesses
that produce and carry them. The costs of storing, distributing
and transporting goods are important factors in the competitive
balance of the European Union. The EU spends about 12% of its
economic output on logistics. This compares with about 10% in
the USA and 13% in Asia.[22]
The European Commission has a crucial role to
play in ensuring common safety and environmental standards, the
removal of market distortions and the development and maintenance
of harmonised trading conditions across the single market. The
Commission has traditionally seen itself as the regulator of transport
and much of its work on freight transport issues has been related
to the establishment of a harmonised legislative framework for
the construction and operation of goods vehicles, mainly during
the 1980s. More recently, and in the wake of the 1992 Transport
White Paper, the Commission has brought about the liberalisation
of the transport market. This work has helped establish a pan-European
road haulage market which has supported the development of the
single market over the last 10 years.
In the future, the Commission should become
the custodian of the efficient operation and unhindered use of
Europe's transport infrastructure, the regulator of open and competitive
transport markets and the champion of the contribution logistics
makes to the competitiveness of the European trading bloc.
THE COMMON
TRANSPORT POLICY
However, that goal is far from being realised.
FTA is dismayed and concerned at the paralysis that has gripped
EU transport policy development in the past five years. The European
Union is about to increase its membership by 10 new member states.
This will increase the size of its population by 75 million and
its economic output by 30%. The realisation of this economic growth
will depend on efficient goods movements to and from these new
member states and on keeping infrastructure in the existing member
states operating.
Yet the common transport policy, as expressed
in the Commission's 2001 White Paper, seems oblivious to these
challenges. Instead it is obsessed with actions to correct what
is seen as the excessive growth of road transport, the need to
rebalance modal share, the internalising of transport's external
costs and the imposition of new social costs and controls. FTA
does not believe this a responsible approach to Europe's growing
transport problems and that rather than stifle transport growth
the Commission should be acting to ensure that the EU's transport
capabilities match the demand for services that will follow from
the expansion of the EU and the expected economic growth within
its existing members.
Not only is there an apparent absence of long-term
planning but many of the recent legislative actions initiated
by the Commission have been stalled or reversed during the co-decision
process. Some of these expose wider issues that the Commission
needs to confront in its future role in developing a common transport
policy.
DIGITAL TACHOGRAPHS:
THE CHALLENGE
OF STAYING
AHEAD OF
TECHNOLOGY
The replacement of analogue tachographs by an
electronic model to record drivers' hours has been a Commission
project since the end of the 1980s. The specification for the
so-called `Type 1B' tachograph was finally published in the Official
Journal on 5 August 2002. The accompanying regulation requires
that all new vehicles over 3.5 tonnes gvw first registered after
5 August 2004 be fitted with an approved Type 1B tachograph and
that the operator and driver use this equipment to record and
monitor compliance with the drivers' hours rules.
The regulation also specified dates by when
prospective suppliers of these tachographs needed to submit prototype
models for testing and type approval. Although this deadline passed
in August last year no models have even been submitted. However,
the regulatory deadline for the fitting of tachographs in new
vehicles is still extant—the Commission resolutely refuses
to issue a revised deadline fearing that far wider amendments
will be sought by the Council and the Parliament during the passage
of the amending regulation through the co-decision procedure.
Thus vehicle operators face the prospect in August 2004 of breaching
an EU regulation requiring the use of equipment that almost certainly
will not exist in an approved form. Many UK operators have said
they will defer the purchase of new vehicles in the summer rather
than operate them in an uncertain legal environment.
FTA is astounded at the fiasco of the non existent
digital tachographs and there are serious issues that the Committee
should note. Clearly the digital tachograph will not be the last
piece of statutory electronic equipment that will need to be specified
for fitment in the cabs of goods vehicles. The next such item
will be a road user charging unit. Whilst the development of a
common EU standard for such equipment is essential the Commission
needs to establish a quicker way of specifying this equipment
with a greater range of sanctions available where equipment suppliers
choose not, or are unable, to meet statutory deadlines.
A further issue is that the basic design of
the tachograph is based on technology extant in the mid 1990s.
It is unlikely that approved digital tachographs will be able
to interact with other, more recent electronic equipment fitted
to the goods vehicle.
The Committee should conclude that the Commission
needs urgently to find a shorter, more flexible means for the
development and approval of statutory electronic devices for fitment
in goods vehicles that allows for incorporation of new technological
developments.
AMENDMENTS TO
THE DRIVERS'
HOURS REGULATION:
THE RESULTS
OF EXPOSING
THE FINE
DETAIL TO
AMENDMENT
The EU regulation on drivers' hours and rest
periods was adopted in 1985 and is one of the principal pieces
of safety legislation in the road freight industry. Although complex,
the regulations incorporate vital flexibility that allows drivers
to optimise their rest and break periods whilst preserving protection
against unsafe periods at the wheel. In 2001 the Commission proposed
a revision to a number of the provisions of the regulation, ostensibly
to harmonise interpretation and allegedly to make it easier to
programme the digital tachograph. Once published the list of changes
quickly escalated and became virtually unmanageable following
amendments made by the European Parliament. These were of great
consequence to logistics operations and were made without consultation
with industry representatives. As a result of these changes, the
amending regulation is now stalled in the Transport Council awaiting
the initiative of a future Presidency.
In the UK technical amendments of this detail
would be made through statutory instruments and subject to detailed
consultation and review with industry and other stakeholders.
A comparable system is required at European level so as to avoid
future delays and frustrations in the revision of detailed technical
legislation.
The Committee should conclude that the Commission
needs to institute revised procedures for the amendment of detailed
technical legislation giving access to industry and other stakeholders
to inform and influence the amendments at an early stage.
HARMONISATION OF
WEEKEND BANS:
THE NEED
FOR 24/7 TRANSPORT
INFRASTRUCTURE
The prohibition of heavy goods vehicles in many
EU countries at weekends and on public holidays is a long-standing
irritant to the UK international haulier. It causes unnecessary
peaks in journeys and is at odds with economies that operate on
a 24 hours a day/seven days a week basis. Following an attempt
to extend an existing ban discriminatorily to foreign vehicles
by the French Government in 1998 the European Commission proposed
a directive harmonising the criteria by which future bans could
be set and requiring their pre-notification. Member states with
existing bans in place proved reluctant to accept this and the
directive has stalled in the Transport Council. Making the best
use of the existing infrastructure will become a more pressing
policy approach as road congestion grows in the future. A key
role for the Commission should be to monitor congestion at an
EU level and discourage restrictions on the main European routes
(E routes).
The Commission should highlight the need for
continuous access to the road network as part of its promotion
of the importance of logistics to European economic growth.
The Committee should conclude that access to the
main European road network should be available at all times to
maximise the use of existing infrastructure and should encourage
the Commission to attempt again a harmonisation and curtailment
of weekend bans on heavy goods vehicle movements.
ACTION IN
THE EVENT
OF BLOCKADES:
KEEPING INTERNATIONAL
TRADE ARTERIES
OPEN
Disruption to the free movement of road vehicles,
trains, ferries and aircraft is a common tactic employed by dissatisfied
groups, particularly in France. The extensive and lengthy blockades
of parts of the French road and rail network by striking hauliers
in 1998 caused particular hardship for British drivers and was
highly disruptive for many British businesses. Despite repeated
requests for the Commission to enforce the rights for the free
movement of goods in another member state the Commission proved
reluctant to act decisively. At the time FTA called on the Commission
to designate the network of E routes as immune from this form
of disruption, given the high proportion of international traffic
that use them and their importance to provision of efficient logistics
in the European Union.
The Committee should conclude that the Commission
should defend robustly this founding principle of the European
Treaty and take rapid and decisive action against member states
who fail to keep vital infrastructure open for international traffic.
HARMONISATION OF
FUEL DUTIES:
ENSURING A
CONSISTENT AND
EVEN-HANDED
APPROACH TO
TAXATION
The existence of wide disparities in the level
of diesel duty taxation across the EU has created an unstable
UK logistics market in which UK-based road transport operators
must compete with foreign operators who have a significantly lower
cost base by virtue of the lower fuel duty they pay. The annual
cost of fuel for a 40 tonne articulated vehicle in the UK in October
2003 was £28,221. This compares to £18,758 in the Netherlands,
£18,716 in France and £17,000 in Spain. The high price
of diesel in the UK is the main factor contributing to overall
vehicle operating costs which are 20% higher than in France and
4% higher than in the Netherlands, according to the most recent
FTA survey of EU operating costs.
The Commission's 2002 proposals for a gradual
harmonisation of diesel duty rates for commercial vehicles recognised
the competitive distortions created by member states such as the
UK setting diesel duty rates in isolation from levels applied
elsewhere in the EU. The rejection of these proposals was a major
set back for the UK freight transport industry and leaves businesses
exposed to predatory pricing from lower cost foreign operators.
The introduction of lorry road user charging
in the UK and the development of a charging framework by the Commission
offers the possibility of a new way to tackle the competitive
distortion of high fuel duty faced by UK hauliers. However, a
more equitable tax regime will be achieved only if UK diesel duty
is reduced to levels paid by operators elsewhere in the EU.
Even if the Government can meet its 2006 target
date, lorry road user charging could be up to three years away.
In the meantime the UK logistics industry continues to steadily
lose market share on its domestic and international routes. In
the last three years there has been a fourfold increase in the
number of foreign lorries undertaking domestic work in the UK
and the market share of foreign lorries on UK accompanied international
work has risen from 65% to 73%.[23]
The Committee should conclude that the Commission
should set a framework for road freight taxation which ensures
a consistent approach to setting duty rates and charge throughout
the EU in which levels of taxes and charges converge over time.
FUTURE PLANNING
The European Commission has a unique role of
the as initiator of legislation and collator of member states'
actions. FTA believes that there are five areas where the European
Commission can, and should, exercise its powers of law making
and enforcement and information gathering to assist the development
of efficient logistics services in an expanded European market.
Identifying the trends in manufacturing location
and future origins and destinations of goods
Over the next 10 years, trends should be identified
in manufacturing location and future origins and destinations
of goods so as to inform long term planning and investment decisions
by industry, logistics providers, rail freight undertakings and
infrastructure owners. Demand for freight transport services is
a direct result of the need to transport goods from origin to
consumer. The Commission is uniquely placed to collate this information
and develop a high quality planning resource for use by all parties
involved.
Assessing the costs and impact of congested infrastructure
and journey time on the efficiency of the single market and identifying
investment priorities
The cost of congestion will become more significant
in the next 10 years. The Commission can uniquely identify and
target resources towards tackling chronic bottlenecks, particularly
in transit countries.
The Commission must be the champion of sustaining
modal choice for freight operators and consignors. However, this
need not be at the expense of supply chain efficiency. After two
years of lacklustre growth in 2002 and 2003, the Euro area economy
is expected to grow at an average annual rate of 2.7% between
2004 and 2010, with trade increasing at 6% per year.[24]
Industry will need to make best use of all transport modes if
it is to effectively service this growth in activity. The logistics
sector will naturally gravitate towards a spread of modal use
which achieves the best blend of cost and journey time reliability.
To do this it must be able to assess the performance of each mode
using common standards and be able to move freight seamlessly
between modes to achieve the optimal supply chain configuration.
Removing barriers to the movement of labour into
transport jobs
Transport generally is suffering a chronic shortage
of skilled labour and productivity of many employees will be dramatically
reduced by the introduction of working time controls to all modes
of transport. The Commission needs to ensure that licensing legislation
does not unduly inhibit the movement of labour into transport,
provided safety standards are observed.
Liberalising restrictive markets and residual
cartelised practices
The Commission needs to complete the work of
creating a single market for goods transport in all modes. The
railways, deep sea container shipping and air cargo continue to
suffer from residual protectionist measures which inhibit their
efficiency. In nearly all cases work is already under-way but
the task of completion is urgent and must maintain a high priority
in the Competition Directorate's work programme.
Timely and effective use of technology to improve
safety and environmental performance and operating efficiency
As demonstrated by the digital tachograph, and
possibly by the development of common road user charging technology,
the Commission urgently needs to establish a process for the timely
adoption of new technologies in transport. It is crucial that
where possible the Commission avoids technical prescription in
its regulation and concentrates its effort on producing objective-focused
legislation in the form of frameworks and targets that allow industry
to decide how best to meet the requirements.
Where highly detailed specifications are required,
the Commission needs to protect this from arbitrary scrutiny and
amendment whilst protecting transparency and accountability.
CONCLUSION
The role of the European Commission in developing
beneficial and economically efficient transport policies is central
to the success of the European market. The slow progress recently
made and the challenges ahead, in particular from rising congestion
in all modes, demand a new and revitalised approach. The Commission
should accept and understand the vital contribution that logistics
makes to the functioning of the single market and direct its efforts
towards maximising operational and economic efficiency within
harmonised standards for safety and environmental performance.
January 2004
22 9th Annual State of Logistics Report-CASS-1998. Back
23
Department for Transport, Roads Goods Vehicles Travelling to
Mainland Europe: Q3 2003. Back
24
National Institute Economic Review, October 2003. Back
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