House of Commons - Environment, Food and Rural Affairs

Select Committee on Environment, Food and Rural Affairs Seventh Report

8 POTENTIAL FOR GROWTH IN FREIGHT USE OF THE WATERWAYS NETWORK

84. The canal network was primarily constructed for carrying goods. Today, however, less than 1% of domestic freight in England and Wales is transported via the waterway network, despite the significant environmental benefits of transferring freight from road (coastal and inland shipping emits 80% less carbon dioxide tonnes per kilometre than road haulage).[145]British Waterways (BW) has had some high-profile success in this field recently with the decision to build a new lock and water control structure on Prescott Channel in Bow, to enable the delivery of up to 7,000 tonnes of construction materials a day to the future Olympic site by water, which would allow approximately 140,000 lorry journeys to be taken off the road.[146] Beyond the Olympic project, however, BW has attracted criticism for its general lack of commitment to expanding freight use on the waterway, and it recently closed its central freight department.[147]

How much potential?

85. Witnesses had mixed views about how much potential existed to increase freight use on the waterways network. The Inland Waterways Association told us that freight carriage on the waterways was "under-utilised and under-appreciated".[148] The Institution of Civil Engineers said opportunities to expand freight transportation existed on certain waterways, such as the Sharpness, and on the rivers Lee and Thames.[149] We note that, in July 2007, Sainsbury's held a successful trial to transport food to some of its stores by barge on the river Thames (although this is on waters owned by the Port of London Authority).[150] Some hoped the Olympics could be a catalyst for more general increase in freight transportation on the waterways.[151] Others, however, were less optimistic. Sir Adrian Stott said that most UK waterways were "simply too small to be economic" and that it was "unrealistic" to expect freight to return to being a major traffic, or source of revenue.[152] Ashby Canal Trust also noted that freight use would be limited to the larger waterways.[153]Some stressed that freight transportation would only be possible on the waterways when no double-handling was involved during the journey.[154]

BW's commitment to freight

86. Waterways for Tomorrow stated the Government's aim to encourage the transfer of freight from roads to water-borne transport, where practical.[155] In 2000, British Waterways made a commitment to double the amount of freight carried on water by 2010. Since that year, however, freight transportation on the waterways has, in fact, reduced from 4.3 million tonnes to 3.4 million tonnes in 2005.[156] Witnesses with interests in the freight sector were disappointed by BW's commitment to increasing freight transportation on its waterways. Sea & Water said that BW suffered from "conflicting priorities," with freight not considered as important as leisure and property. Sea & Water said this had worsened since the recent grant reductions, and that BW needed to "reaffirm its commitment to freight".[157] Similarly, the Commercial Boat Operators' Association (CBOA) was "not convinced that British Waterways has done enough to attract new freight to the waterways", despite earlier promises by the organisation.[158] Both criticised BW's decision to disband its central freight department; Sea & Water believed this would further "de-prioritise" freight within British Waterways.[159]

87. We questioned BW about its general commitment to increasing freight use. BW said two main problems existed in increasing freight use on the waterways. First, freight did not generate much revenue for BW: in fact, it "imposes costs … over and above our current day to day operations" because of additional costs for dredging and manning locks. BW estimated that associated additional costs were well in excess of £1 million per annum, compared to income received of £700,000.[160] Second, BW believed a more pertinent reason for the lack of freight transportation was because it remained uneconomic for companies to make the move onto water. BW said companies required further financial incentives to transfer freight onto the waterways, despite the availability of Freight Facilities Grants:

161

Other witnesses supported the idea of further financial incentives for companies. IWA believed "green taxes" should be used to encourage companies to make the switch onto water.[162]

88. BW has commissioned a study with economic consultants Oxera, expected to report in autumn 2007, which is intended to provide "the opportunity for a full and realistic public debate on the future of waterway freight and British Waterways' role".[163] Although Sea & Water and CBOA were involved in the consultation for the study, neither organisation was optimistic it would change anything.[164] Sea & Water said that some participants, including BW, believed the study's outcome was "predetermined".[165]

Is British Waterways the most appropriate organisation for inland waterways freight responsibilities?

89. Some witnesses did not believe BW was the most appropriate organisation to be responsible for freight transportation issues. CBOA was "not satisfied" that the complete responsibility for British Waterways—"certainly for any transport function"—should rest with Defra.[166] Sea & Water said that "a shared 'water transport unit'" to cover inland waterways and coastal shipping could be set up by Defra, the Department for Transport (DfT) and the Department for Communities and Local Government, so that BW would be "better placed to achieve a balance between all of its priorities, including freight".[167]

90. The Transport Select Committee recently recommended in its Report on The Ports Industry in England and Wales that the DfT should take over responsibility for commercial inland waterways network.[168]

Our views

91. There are significant environmental benefits to be gained from moving freight from roads onto the waterways, particularly in terms of carbon dioxide emission reduction. However, freight is neither one of BW's nor Defra's main areas of responsibility. We also note that BW's commercial status discourages it from investing in expanding freight use because it does not make good business sense to do so. This creates a paradox for BW in that, on the one hand, it is being tasked by Government to become more financially self-sufficient and to generate more of its own income whilst, on the other hand, it is expected by Government to promote freight use on its waterways, in general an unprofitable activity.

92. If the Government is serious about transferring more freight onto the waterways, companies themselves require further financial incentives to make this move, in addition to the existing Freight Facilities Grant. We recommend that the Government conduct a review to examine the possibility of introducing a carbon credit scheme to encourage more businesses to move onto the waterways.

93. Given the potential carbon savings to be derived from an increase in freight transportation on the waterways, we recommend that Defra form a joint industry/Government body fully to evaluate the opportunities that exist for freight and make recommendations as to where the responsibility for promoting the uptake of these opportunities should rest.

145 Ev 340, para 8.1 [Natural England]; Q 209 [Sea & Water]. Back

146 "New Life for East End Rivers", 28 February 2007, www.britishwaterways.co.uk/newsroom; Q 212 [Sea & Water]. Back

147 Ev 270 [Louis Jankel]; Ev 56 [Sea & Water]. Back

148 Ev 1, Executive Summary Back

149 Q 106 Back

150 "Back to the future as Sainsbury's trials food deliveries on the Thames", J Sainsbury Plc press release, 10 July 2007. Back

151 Q 211 [Commercial Boat Operators' Association] Back

152 Ev 125 Back