Select Committee on Transport Eighth Report


1  The Government's approach to freight transport


1.  Freight and logistics—the flow of goods into, out of and around the country—play an important part in meeting all four of the Department for Transport's strategic objectives—to sustain economic growth through efficient transport networks, to improve transport's environmental performance, to strengthen the safety and security of transport, and to enhance access to jobs, services and social networks. The Government recognises this but believes that primary responsibility for the provision of freight services rests with the private sector. There are, however, a limited number of circumstances in which the Government says it would normally consider intervening:

  • where the Government has responsibilities for provision of funding or network infrastructure;
  • if there is a demonstrable need for a long-term strategic planning framework; or
  • if the market fails to capture its own externalities—such as adverse impacts on the environment, safety or congestion—and Government action can contribute to the achievement of the Department's strategic objectives.[1]

2.  The Department sees its role in relation to freight transport as ensuring that goods can be moved freely, reliably and efficiently by the industry, while minimising the negative impacts (including congestion, accidents, emissions and noise) of doing so.[2] The five main elements of its freight strategy are

  • investing in network and IT infrastructure required to support effective freight services where it is affordable and good value for money;
  • regulating proportionately, to minimise administrative and other burdens on industry;
  • increasing compliance with regulations;
  • ensuring a long-term planning framework that recognises the needs and aspirations of both industry and the overall public interest; and
  • promoting, incentivising and/or funding behavioural change where it is affordable and good value for money.[3]

3.  An increasing amount of freight is transported within the UK and to and from the UK internationally:

  • Domestic freight moved increased overall by 44% between 1980 and 2006, from 175 to 252 billion tonne kilometres. The majority of the increase is due to goods moved by road, which increased by 79% and in 2006 accounted for 66% of all goods moved. The average length of haul for road freight has increased since 1980, by 29% to 86 km in 2006.
  • Goods moved by rail declined from 1988 to 1994 but has since risen to reach 22 billion tonne kilometres. Between 1994 and 2006 goods moved by rail increased by 70% and in 2006 accounted for 9% of all goods moved. Since the early 1990s the length of haul by rail has risen from around 120 km to over 200 km at present.
  • Domestic waterborne freight includes non-seagoing as well as seagoing traffic, although the non-seagoing traffic is a very small proportion of the total. As more freight has been moved by road, water's share has reduced, from 31% to 21% between 1980 and 2006. Goods moved by water have the longest average length of haul—410 km in 2006.
  • A relatively small amount of domestic freight is moved by air but it is of a disproportionately high value.
  • Since 1980 UK international freight tonnage has increased by over 80%, from 251 million tonnes to 458 million tonnes in 2006. Waterborne freight dominates UK international trade and in 2006 96% of tonnage lifted was by sea, 4% by the Channel Tunnel and less than 0.5% by air.[4]

    Figure 1: Domestic freight moved by mode: 1980 to 2006

Source: Department for Transport

4.  The Government has established that there should be greater coherence to its freight strategy and logistics as one of its "key cross-cutting themes".[5] The Minister described the Department's ongoing work to develop "a much clearer recognition of freight's role —across modes—in transport strategy."[6]

5.  Others argue that the Government should take a more interventionist approach to freight transport. Professor McKinnon, Director of the Logistics Research Centre at Heriot-Watt University, told us:

There is no doubt in my mind that we should not be adopting a laissez-faire approach to freight. I think that there is a strong need for strong government intervention.[7]

6.  He argued that public intervention in the freight sector was essential—to invest in infrastructure and to incentivise best practice and the use of more sustainable modes—and that the Government has available a number of "policy levers". It is, he says, pulling most of them, "some more effectively than others."[8]

An integrated freight strategy

7.  The Department published Sustainable Distribution: a strategy in 1999 and described it as "a comprehensive, integrated strategy for the sustainable distribution of goods and services in the UK".[9] The overall policy context in which the Department operates has changed significantly since then: congestion on the roads and railways has worsened, climate change has become a much more pressing concern, Railtrack and the Strategic Rail Authority have been replaced, there has been an Aviation White Paper, a Ports Policy Review and a Rail White Paper. The Eddington Study (on transport's role in sustaining the UK's productivity and competitiveness) and the Stern Review (on the economics of climate change) have had a fundamental effect on how we think about transport policy. Our Report on The Ports Industry in England and Wales, published in January 2007, recommended that the Government publish an updated, integrated freight plan:

The Government has a fundamental responsibility to the transport infrastructure of the UK: its major roads, railways and rivers and canals. Its responsibility lies not only in the renewal and, where required, the expansion of this infrastructure, but also in ensuring that the freight that moves on it can do so easily, quickly and sustainably. To this end, the Government should develop an integrated freight plan as a matter of urgency.[10]

8.  Our witnesses were generally supportive of the call for a renewed freight strategy. Freightliner, for instance, believed that it could facilitate sound investment decisions where there were choices between major road and rail upgrades. Network Rail suggested that the Government had arrived at an idea of its priorities relating to freight transport—primarily to enable the growth of rail freight in order to realise productivity and environmental gains—but there was still a need to "set out what that would mean over a period of quite a number of years".[11] British Waterways and Sea and Water considered that a freight strategy exploring ways in which the various freight modes can interact, with measures to achieve increased freight on domestic waterways, would give operators the certainty they needed to make significant investments in infrastructure.[12]

9.  Some representatives of the ports industry, however, expressed concern at the prospect of Government "second guessing the market", although the British Ports Association (BPA) did recognise the importance of considering the freight industry as a whole.[13] It would like to see a freight policy rather than a freight plan, which would enable "targeted investment with careful thought given to transport projects which can have the maximum effect on freight efficiency".[14] The Association of International Couriers and Express Services was sceptical of the value of adopting an integrated freight strategy saying that it could result in "more bureaucracy and regulation being imposed on top of existing arrangements with no measurable improvement in the operation of freight transport".[15]

10.  The Government did not accept the Committee's recommendation for a freight plan in 2007[16] and the incumbent Minister still does not believe that it would be appropriate for the Department to produce a freight strategy, although he is committed to addressing freight in wider strategic work. He did concede that the Government should be able to "explain much more clearly" how its strategy meets the needs of freight users and how different freight modes interact. We were told that the Department intends to publish a statement on freight transport, pulling together its recent work and resulting conclusions, as part of a wider transport green paper this summer.[17]

11.  The transport of freight has wide-ranging effects on individual businesses, the national economy, the transport network, and the environment. We are not persuaded that the Department for Transport's "hands-off" approach is the right one. There are significant economic and transport benefits that could be gained from a more active Government freight strategy. The Government must not shirk this responsibility.

12.  We have previously recommended that the Department should produce a national freight plan, which would be valuable in setting out the Government's vision for the future of the freight transport sector. Important choices involving trade-offs between interested parties need to be made by the Government; its approach to such choices, as well as a description of the kind of freight transport industry that the Government would like to see in the future, should be brought together in a strategy document which should reflect regional and national needs. We recommend that the Government set out its aspirations for freight transport, including its potential contribution to reductions in congestion and transport emissions, likely requirements for and location of freight infrastructure and jobs, and the kinds of technology of which the freight sector might make use in the future. This information would also increase the confidence of those considering investing in freight infrastructure.


1   Ev 73 Back

2   DfT, Department for Transport Annual Report 2007, 2007, para 9.1 Back

3   Ev 73 Back

4   DfT, Transport Trends: 2007 edition, 6 December 2007, pp. 66, 68 and 75 Back

5   Ev 74 Back

6   Q 478 Back

7   Q 10 Back

8   Qq 2 & 7 Back

9   DfT, Sustainable Distribution: a strategy, March 1999 Back

10   Transport Committee, The Ports Industry of England and Wales, HC 61, Session 2006-07, para 62 Back

11   Q 249 Back

12   Ev 179 and Q 284 Back

13   Ev 125 Back

14   Ev 207 Back

15   Ev 147 Back

16   Transport Committee, The Ports Industry in England and Wales: Government Response to the Committee's Second Report of Session 2006-07, 24 July 2007 Back

17   Q 478 Back


 
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