6. Freight Transport

Introduction

Remit

6.1 Because of the importance of transport to sustainable development, three of the initial projects undertaken by the Round Table are in this field. One of these is a study of freight transport.

6.2 The Royal Commission on Environmental Pollution (RCEP) published its Eighteenth Report, Transport and the Environment, in October 1994. The report, which made a number of recommendations addressing the problem of traffic growth, is being considered by Government. The Round Table's freight transport study did not aim to be comprehensive, and was concerned primarily with measures that could be taken in the near future to reduce the impact of freight transport, rather than attempting to control traffic growth itself. The Round Table believes that the measures it is now recommending, although the effects in themselves are not large could, taken together, have a significant effect in reducing the environmental damage from the transport of freight.

6.3 Initial work was undertaken by a subgroup. The membership of that group, which included several people who are not members of the Round Table, is listed at Annex C. This report, however, reflects the views of the Round Table itself.

Trends and forecasts

6.4 Over the last 30 years the total tonnage of goods carried in Britain has varied within a comparatively narrow range, averaging just under 2 billion tonnes a year. The trend in tonne kilometres (the weighted total of the distances travelled by each vehicle load of goods) has been rather different: after slower growth in the 1950s this has risen rather more rapidly to 212 billion tonne kilometres in 1993, an increase of 141% on 1952. The primary cause of this growth, which has parallelled the growth in GDP, is an increase in the average length of freight trips by road, from about 37km in 1952 to 84km in 1993.

6.5 Road is the predominant form of freight transport, accounting for 63% of tonne-kilometres in 1993, although substantial quantities of freight (mostly oil, petroleum products and coal) are carried by water, largely by coastal shipping (25% of tonne-kilometres), and smaller proportions are carried by rail (6.5%) and pipeline (5.5%).

6.6 The main reasons for the predominance of road transport are flexibility and cost. New patterns of freight transport have emerged, such as long hauls from a small number of distribution depots serving the whole of Britain, and "just-in-time" (JIT) logistics, which involve precise planning of deliveries to match production or sales needs. Companies' increased transport costs as a result of JIT are more than offset by the need to hold fewer stocks, and their reduced infrastructure and labour costs. These trends are not exclusive to the United Kingdom: the increase in freight traffic measured by tonne kilometres over the past decade - 34% - is exactly the average increase for the same period for all 15 countries in the European Union.

6.7 The 1989 National Road Traffic Forecasts foresaw light goods vehicle traffic rising in line with GDP to 2025 and heavy goods vehicle traffic growing more slowly, but, under the higher forecasts, growing by 140% by 2025. These forecasts assume that there will be a further increase in the proportion of freight transported by road.

Costs and taxes

6.8 Government policy is that taxes paid by road users should at least cover the full economic costs of road provision and road use. These taxes are vehicle excise duty (VED) and fuel duty. The Department of Transport is considering the possibility of regarding the road system as a capital asset, which would mean that revenue from road taxes would have to cover depreciation and yield a rate of return on the asset. No allowance at present is made for environmental costs.

6.9 A key principle of the UK's strategy for sustainable development is that the full environmental costs should be reflected in the price people pay for transport. It is difficult to quantify the environmental costs of road transport, and estimates vary considerably according to how they are evaluated. The RCEP estimated these at between £11bn and £20.5bn a year. Other estimates have ranged between ,£10bn and £50bn a year. The environmental disbenefits of road freight (air pollution, need for infrastructure, congestion, noise, visual disturbance, accidents) are generally greater than for other transport methods.

6.10 For road vehicles as a whole, tax revenue exceeds the combined total of costs at the lower end of the estimates but falls short at the upper end of the range. For heavy goods vehicles, estimates suggest that tax revenue falls short of the combined total of costs, even at the lower end of the range.

Emissions

6.11 The internal combustion engine is still being developed and improved, particularly with regard to reductions in the emissions of airborne pollutants and noise, and the improvement of fuel efficiency. It is not only the design of a road vehicle that determines its environmental effects; factors such as maintenance, fuel quality and driving style are also important.

6.12 When fuel is burned completely, the results are carbon dioxide and water vapour. But engines are never 100% efficient - they produce by-products and pollutants from incomplete combustion. The pollutants are nitrogen oxides (NO and NO₂), sulphur dioxide (SO₂), particulates (also called black smoke), volatile organic compounds (VOCs), carbon monoxide (CO), and lead. The contribution of freight transport to airborne pollution varies. In the case of particulates, about three quarters of the total transport emissions are estimated to come from heavy lorries.

6.13 Controls over emissions from heavy goods and passenger vehicles are being progressively tightened under EU legislation which came into force in 1993. New limits for light goods vehicles came into effect on 1 October 1994. Stage II limits which come into effect in October 1996 are broadly as stringent as the 1994 US standards. The EU has committed itself to more stringent stage III limits to take effect by 1999.

6.14 Over the next few years, these tighter standards should reduce most road freight emissions. That is not the case, however, for carbon dioxide. It is estimated that in Europe heavy lorries are responsible for around 4% of the CO₂ released into the atmosphere by human activity. According to current forecasts the growth of road freight transport will increase CO₂ emissions from lorries by approximately 30% by 2000 and by 60% by 2010 relative to 1990.

6.15 The chemical composition of fuels has an important effect on emissions. Cleaner forms of diesel, such as city diesel, are being developed. A number of alternative fuels have been advocated for use in road vehicles on the grounds that they are less polluting than petrol or diesel. Among the alternatives are liquid petroleum gas (LPG), compressed natural gas, biofuels such as biethanol, and electric propulsion.

Noise

6.16 The noise produced by vehicles comes from several sources: the combustion process, the mechanical parts in the engine and transmission, air intake, the exhaust, the displacement of air at high speeds and the contact between tyres and the road. Modifications which reduce noise may also have other environmental benefits, for example improved aerodynamics can reduce fuel consumption. Existing UK legislation is expected to bring about reductions in the sound level of new heavy vehicles. The scope for further improvements in the sound level of the internal combustion engine is limited. Reductions in noise levels will therefore depend on traffic management, quieter surfacing materials and screening.

Existing Initiatives

6.17 The Round Table welcomes much of the work that is already going on to encourage more sustainable freight transport. Such initiatives include the Good Lorry Guide, a code of practice for freight users and operators, recently published jointly by the Freight Transport Association and Road Haulage Association, and the recent report on transport by the Technology Foresight Group, particularly as it applies to the design of HGVs and trailers.

6.18 The Round Table regards improved intermodal transport - both passenger and freight -as a key component of sustainable development, and is undertaking further work on the obstacles to easier intermodal transfers. Meanwhile, it is aware of, and welcomes, the Piggyback Consortium's plans to develop the West Coast main line for piggyback transport.

6.19 Such research into the effectiveness of urban distribution centres as has so far been carried out has not been conclusive. The Round Table believes that further work should be undertaken into this concept, and will itself be looking for opportunities to assess its practical value.

Conclusions

6.20 The Round Table's main recommendations in this report are concerned with the enforcement and strengthening of existing regulations; economic instruments; and good practice. In all these areas, and especially when considering economic instruments, the Round Table emphasises the need to take account of the possible impact on the UK's economic competitiveness, particularly in terms of freight transport costs in neighbouring European countries.

Enforcement and strengthening of existing regulations

6.21 The Round Table believes that regulations are already in place which, if better enforced and more carefully targeted, would go some way towards making freight transport more sustainable, as well as preventing an unfair advantage for those operating outside the law.

6.22 Appendix 6i shows: the main categories of enforcement (weight limits and overloading, maintenance and roadworthiness standards, drivers' hours and tachographs, unlicensed operators and users of unlicensed vehicles); the number of checks which take place each year in each category; the maximum penalties; and the fines which are recommended by the Magistrates Association in guidance to its members.

6.23 Given continuing constraints on public expenditure, the Round Table has chosen not to make recommendations that would require additional public expenditure; instead, it proposes some redirection of existing expenditure into those areas where better enforcement would be most likely to meet the requirements of sustainable development.

6.24 We agree with the RCEP that the seeking out and prosecuting of those who operate unlicensed vehicles, and the impounding of vehicles where necessary, would be likely to reduce offences in all categories, since it is usually those who are operating illegally who are contravening other regulations, for example on vehicle maintenance, roadworthiness and overloading. The targeting of illegal operators would be much more effective if backed up by the power to impound, and if necessary dispose of, illegal vehicles. Provision of this power, which would be for the Traffic Commissioners who issue operator licences, would require primary legislation.

6.25 A police presence is currently required for the stopping of vehicles on public roads. Police availability for this type of work, however, appears to be decreasing. The Round Table proposes that traffic and vehicle examiners in Great Britain should have the power (as they already have in Northern Ireland) to stop HGVs and PSVs on public roads. Inspectors would require appropriate training in the safe exercise of this power. It would be desirable, too, for more purpose-designed and signed vehicle check sites to be established.

6.26 Appendix 6i shows that fines recommended by the Magistrates Association are very much lower than the maximum fines available for each type of offence; in most cases the recommended fines are so low as to make breaking the law, even if convicted on numerous occasions, profitable. Magistrates are already given guidance, on weight limits and overloading offences, to have regard to commercial gain and damage to roads. We propose that additional guidance should be given to magistrates encouraging them to take account of the sustainable development implications of offences in their sentencing.

6.27 At present, it is usually drivers rather than owners of vehicles who are prosecuted, particularly for offences relating to drivers' hours and overloading. Enforcement authorities and magistrates should be encouraged to direct their efforts towards vehicle owners rather than drivers, since it is usually operators who stand to gain most from the contravention of existing regulations. The group also recommends that a system of clocking up of convictions should be introduced, with the information stored on a central computer database available both to magistrates and to the Traffic Commissioners. Fines could then be imposed that took account of previous convictions and the licences of operators who have received more than a specific number brought to the Commissioners for review.

Economic instruments

6.28 The Government is committed to raising fuel duty by 5% a year in real terms as its main means of reducing carbon dioxide emissions. In 1994, the Chancellor increased the relative tax levied on diesel by equalising the duty on diesel and petrol on a pence per litre basis. In the 1995 budget, duty on diesel and unleaded petrol was raised by 3.5p per litre.

6.29 A number of alternative fuels have been advocated for use in road vehicles on the grounds that they are less polluting than petrol or diesel. As with petrol and diesel, such fuels frequently have both advantages and disadvantages in pollution terms. As the RCEP concluded in its report, "there is no optimum fuel in environmental terms, and the choice depends on which problem is the priority at a particular time or place".

6.30 There are environmental advantages in using methane in the form of compressed natural gas in substitution for diesel in relatively large vehicles which make frequent stops in urban areas. This applies particularly to buses, road sweepers and refuse collection vehicles. Liquid petroleum gas (LPG), which consists mainly of propane and butane, also produces lower emissions than petrol or diesel, but may be less safe than natural gas. The rate of duty on road fuel gases was frozen in 1994, and reduced in the 1995 Budget. Before tax, these road fuel gases are more expensive than petrol or diesel mainly because of the cost of compressing the gases for on-board storage. Following the 1995 Budget changes, the cost to users should be roughly equivalent to that of petrol and diesel.

6.31 In response to the reports of the Committee on the Medical Effects of Air Pollutants and the Expert Panel on Air Quality Standards, the Government announced its intention of keeping the fiscal regime for road fuels under review, taking account of the developing understanding of the relevant health effects and environmental effects. The Government is also conducting trials of alternative fuels and technologies together with local authorities and industry and will shortly publish a guide to all known trials of alternative fuels which have taken place in the UK in the last five years.

6.32 The Round Table agrees that, subject to the need to take account of the UK's competitiveness with other European countries, the Government should set differentials in the rate of tax between fuels which reflect their environmental advantages and disadvantages.

6.33 The only country in Europe currently operating differential taxation of vehicles based on emissions is Germany, which operates a sliding scale of taxation for vehicles meeting the various stages of European emission limits.

6.34 The UK does have differential VED rates but these are based on the propensity of vehicles to cause wear and tear to the roads. For example, a six axle vehicle of 38 tonnes is taxed at a rate of £1,280 a year and a five axle vehicle (with a particular configuration) at £3,100.

6.35 The Department of Transport is considering the possibility of regarding the road system as a capital asset, which would mean that revenue from road taxes would have to cover depreciation and yield a rate of return on the asset; and the whole relationship between VED and road and infrastructure costs is at present being considered. The Round Table supports the RCEP in recommending that the Government considers graduating vehicle excise duty on heavy vehicles according to the emission limits their engines are designed to meet, with a reduced rate of duty for vehicles meeting new limits which are not yet in force, and an increased rate for vehicles not designed to meet emission limits currently mandatory for new vehicles. Graduated taxation should at the same time take account of the propensity of vehicles to cause noise, and wear and tear to roads and other infrastructure.

Good practice

6.36 Many major users and providers of road transport are now successfully exploiting backloading opportunities. This has helped to reduce the proportion of empty running, down from 34% in 1973 to 29% in 1993.

6.37 Although many of the larger companies are already exploiting to the full the opportunities for maximising the use of their vehicles, it is probable that smaller companies are not using the best available route scheduling methods. The technology is well established and is not costly. The Round Table recommends training for smaller companies, through cooperation between DTI, DoT, the Road Haulage Association and the Freight Transport Association, on best practice in this area.

6.38 The Round Table believes that there is potential for further reducing the amount of empty running by loadsharing, although it recognises the difficulties for companies of intercompany use of vehicles. We recommend that the major freight users be encouraged to get together to set up a widely available computerised loadsharing system. We also recommend that companies should be encouraged, in appropriate locations and with suitable vehicles, to operate outside peak hours.

Recommedations

6.39 The Round Table's specific recommendations are as follows:

Enforcement and strengthening of existing legislation

9. The Round Table recommends training for smaller companies through cooperation between the relevant Government Departments, the Road Haulage Association and the Freight Transport Association, on best practice in route scheduling.

10. There is potential for further reducing the amount of empty running by loadsharing. We recommend that the major freight users be encouraged to get together to set up a widely available computerised loadsharing system.

11. We also recommend that companies should be encouraged, in appropriate locations and with suitable vehicles, to operate outside peak hours.

    Appendix 6i Existing road traffic enforcement levels and penalties in England and Wales

    Category	Number of checks (or enforcement level)	Maximum fine in Magistrates Court	Recommended fine according to Magistrates Association
    Weight limits and overloading	120,297	£5,000	HGV Driver - £360 HGV Owner - £750 For overloading, add £30 for each 1% of overload (ignoring the first 10%) but always have regard for commercial gain and damage to roads.
    Maintenance and road worthiness standards	Roadside - 115,157 Maintenance Assessments - 45,481	£5,000* *Must endorse and may disqualify	Defective Brakes: HGV Driver - £210 HGV Owner - £300 Defective Steering: HGV Driver - £210 HGV Owner - £300 Defective Tyres: HGV Driver - £210 HGV Owner - £300
    Drivers' hours and tachographs	1,440,728 (tachograph charts checked)	Breach of hours rules - £2,500 No tachograph - £5,000 Tachograph falsification - £5,000	No tachograph - £240 Tachograph falsification - £360
    Unlicensed operators and users of unlicensed vehicles	381,342	£2,500	No operator's license - £450

    In 1994/95 Vehicle Inspectorate spent:
    £6,809,874 on HGV traffic enforcement.
    £4,079,981 on HGV operator licensing and road worthiness enforcement.
    Total : £10,889,885

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    Published 31 March 1999

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