Select Committee on Transport Written Evidence

Memorandum from Professor Alan McKinnon (FT 35)

Is the Department's investment in logistics programmes—including the Sustainable Distribution Fund—good value for money and meeting the objectives?

  The Department for Transport should be commended for its pioneering work in the field of sustainable logistics. Its Freight Best Practice (FBP) programme is particularly innovative and few other countries have initiatives of comparable breadth and scale. Judging its cost-effectiveness is difficult, however. The estimates that have been made of the economic and environmental benefits accruing from driver training and company-specific advice, especially in the area of fuel efficiency, seem reasonably robust. The impact of FBP literature and benchmarking schemes is much harder to quantify as assumptions have to be made about the related level of behavioural change over different time-scales.

  Truck simulators have been used, on an experimental basis, to train drivers in safe and fuel efficient driving techniques in both England and Scotland. Given the high cost of acquiring and maintaining these simulators, this form of training appears to offer a poor return by comparison with on-the-road driver training schemes, such as SAFED.

  This question also raises wider issues about the availability and quality of statistics on the cost and environmental impact of logistics operations. It is now over 10 years since the last general survey was conducted of companies' logistics costs in the UK, comprising estimates of expenditure on warehousing, inventory and goods handling as well as freight transport. Lorry operating cost tables published by the major trade associations and in the trade press provide an indication of transport expenditure, but this gives only a partial view by transport mode and logistical activity. In managing their logistics companies trade-off transport costs against inventory and warehousing costs as, for example, in the application of the just-in-time principle. The cost effectiveness of the government's sustainable logistics programme might be more accurately measured if up-to-date survey data were available on the level and composition of companies' logistics expenditure.

  A recent project undertaken for the Commission for Integrated Transport has revealed significant discrepancies in official estimates of CO2 emissions from road and rail freight operations in the UK.[49] This reflects differences in the methodologies used and underlying assumptions. Given the importance now attached to carbon mitigation, particularly in the government's sustainable distribution strategy, it is important that a single agreed set of emission factors be compiled which accurately measure the carbon footprints of different types of freight transport operation.

How successfully has the Government influenced European negotiations regarding freight operations? How could the Government help to ensure a level playing field between the UK and overseas freight companies?

  British road freight operators continue to pay much more for their fuel than their counterparts on the European mainland, entirely as a result of the higher fuel duty imposed in the UK. In an attached paper,[50] I discuss the extent to which this fuel price differential has distorted the market for road haulage services in the UK. If this anomaly is to be corrected at an EU level, it would be preferable in environmental terms for the rate of fuel duty in other member states to be levelled up to the UK rate. Research by the European Environment Agency and by our research centre at Heriot-Watt University indicates that the taxes imposed on road haulage operations come much closer to internalising total environmental costs in the UK than in other EU countries. Attempts by the European Commission to harmonise diesel fuel duty across the EU have been relatively ineffective. Even if its plans to raise the minimum level of duty on diesel fuel over the next seven years were fully implemented, it would still only represent just over half the current duty rate in the UK.

  In earlier written and oral evidence to the Transport Committee, I outlined a system of road user charging for lorries which could be used to "level the playing field" between UK and foreign-registered hauliers, in addition to meeting other transport policy objectives. This would be much simpler and cheaper than the LRUC scheme which the government decided to abandon in July 2005 and, unlike some of the time-based vignette systems that have been considered over the past two years, would have the advantage of relating the charge to the distances that lorries travel.

October 2007

49   McKinnon, A C. "CO2 Emissions from Freight Transport in the UK" Commission for Integrated Transport ( Back

50   McKinnon, A C. "Increasing Fuel Prices and Market Distortion in a Domestic Road Haulage Market: the Case of the UK" European Transport, issue no. 35, April 2007 ( Back

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