Three years ago the government introduced a 10-year investment plan for improving the transport infrastructure, but, having recognised its failure to deliver on most of the proposals made, it abandoned the scheme earlier this year, according to Richard Turner, chief executive of the Freight Transport Association (FTA).
“Initially the plans did look quite generous,” Turner says. “The government agreed to spend £18 billion a year for 10 years, £180bn in total. Although that appears to be a large amount it isn’t really; especially when you realise that Network Rail saved more on its budget last year than the Highway Agency had to spend on roads - they saved £900 million which isn’t remotely close to what was allocated to the roads.”
While the government has initiated another approach to investment, Turner says the sums pledged so far are nowhere near sufficient for the scale of redevelopment needed. “The forward plans for expenditure are just inadequate. The spending may be higher than it has been in the last couple of years, but it is nowhere near as high as it was 10 years ago. We have a very serious problem with the roads in this country,” he says. “The M6 north of Birmingham breaks down, in that it comes to a standstill, at some point, everyday, and that is our main trade route into the north west and into Scotland.”
The obvious solution to alleviating congestion might be to build new roads. Yet, Turner claims the FTA is not suggesting anything nearly as drastic that. “We are asking for our major trade routes to be widened by about 12 foot, to be able to have an additional lane, which would take away some of the congestion.” The advantages to such a solution would be numerous, he explains. “Extending the existing motorways is very easy to do. There are not many environmental problems or problems with land because there is usually land available next to the motorways already. The only issue would be the need to widen some of the bridges but it is a very workable solution. You only have to look at the section of the M25 around Heathrow which has been utterly transformed by the extra lane.”
The government’s response to pleas for additional funding is to insist it is investing as much as it can afford. Turner suggests the government is shirking its responsibility too effortlessly, however. “If you are running a business and something is vitally important you have to find a way to fund it. If there really isn’t enough money the easy way, then let’s get private money into it. The level of service provided by our hauliers is dramatic but we must get a level of reliability into our trade routes. The economy is growing and doing well but our lack of trade routes is holding it back. If you can’t move goods around the economy can’t grow.”
Liam Olliff, of Transfrigoroute, an organisation, which supports the temperature-controlled transportation sector, agrees. “I think we have arrived at this situation because of a long standing corporate government inertia,” says Olliff. “They don’t have the imagination to get a grip on transport as a whole or realise its huge potential for long standing growth of the GDP. Many civil servants and politicians consider that transport is not very voter-friendly. As soon as they do anything to promote help for lorry drivers they shy away from it. They feel that the public perception is such that many people think of lorries as something they get stuck behind on the motorways forcing them to endure annoying traffic hold ups. And that doesn’t give the average voter a warm feeling. They lose sight of the fact that it’s in their interest to keep fuel and diesel costs from getting too expensive because it’s the transport sector that brings all the goods that they and we consume on a daily basis.”
Olliff believes the government fails to understand the demands of the industry and what is needed to make it commercially profitable. “We need to introduce incentives that make transport more competitive, and if we are able to be more competitive at home that in turn helps us to be more competitive overseas. Our industry is a fraction of what it was because the fact is, with all the costs it is no longer particularly viable to operate a transport business [in the UK].
“For those that are able to find themselves a good supply chain it is a healthy and good business to be in, although it is not a particularly stable business since it is not unusual for hauliers to be brought in out of the blue by the supermarkets to be told prices are going to be dropped and it is of course very sensitive to movements in the macro economy.
“When you consider that fuel has been raised by 2.5 to 4 per cent, that is the difference between survival and going out of business for some operators.”
Olliff says the hikes in fuel and road tax have contributed heavily to the significant reduction in the size of the transport industry, by forcing some hauliers to cease operations. While there have been positive consequences of such rationalisation, the pressures are still immense for those left in the game, he explains. “Operators have become more sophisticated and there has been a considerable amount of consolidation,” he says. “There are far fewer individual companies moving goods around the country. Some of the smaller ones have fallen by the wayside and those that remained have joined together to consolidate their commercial position.
“Operators in business are challenged to find more imaginative ways to make sure goods are carried in a condition of absolute perfection, as well as being transported from a to b in as fast a time as possible,” he says.
In addition, there is a need to maximise efficiency at all times, while avoiding the incentive to cut corners. “Operators are working together and networking to keep their wagons filled all the time they are on the road to keep things as cost-effective as possible,” he says. “Our mantra has always been quality - of equipment leading to quality of goods in-transit, but that is made so much harder when the price dictated by the supermarkets continues to take a downward spiral. It means that hauliers are in the unpleasant position of either taking a reduction in wages or finding a way to cut costs excessively. Unfortunately this is to the detriment of the whole industry because operators who prioritise quality may be driven out and replaced by those for whom quality is not such a primary consideration since they may be able to run their operation with lower overheads.”
Additional costs have naturally derived from the continual advancements made in the industry, says Olliff. In the temperature-controlled sector, the challenge has fallen upon equipment providers to give operators more and more sophisticated methods of managing the temperature at which all the goods are stored. Systems have become much more technical whereby supermarket auditors demand to be given evidence of the vehicle’s internal temperature from the field in Spain to the distribution depot in Milton Keynes.
“These are of course costs which have to be borne by the operator and are the sort of things that have caused the smaller operators to struggle,” Olliff explains.
The dire financial situation in which UK hauliers find themselves is grossly exacerbated by the presence of so many foreign drivers. According to a report published by the FTA this week, the road-wear brought about by foreign vehicles incurs a cost of £200m because, although foreign-registered vehicles do 1.07bn km a year in the UK, they are currently exempt from paying road tax. According to Turner, the UK economy is losing out further because the foreign hauliers fill their vehicles to capacity levels with diesel in continental Europe so that they do not have to suffer the hiked-up prices of UK fuel. Thus, the UK economy has no way to recoup the expense of supporting foreign operators.
A further point of contention regarding the incidence of foreign operators is the inability to subject them to the same stringent control as UK operators. “With UK-registered vehicles, VOSA (Vehicle and Operator Services Agency) has a database on both the driver and vehicle and its history and they can pull that up at the roadside so it’s virtually available in real time,” says Turner. “However, with foreign vehicles there is absolutely no exchange of any information. We are all for free trade within Europe but we need absolute transparency throughout.” In addition the legislation is rather convoluted when it comes to prosecuting offending drivers, a process which is complicated further by language barriers. Turner says that people doing checks on foreign vehicles are likely to just hold offending vehicles until a replacement driver comes along or problems are resolved, whereas a British driver would be prosecuted, as would his operator.
Despite the contraction of the industry, there is still a chronic shortage of drivers at certain times because of the inability to retain staff during periods of inactivity. This has led to an increased reliance on agency drivers, which according to Turner, is a necessary reality but can evoke problems in terms of reliability and control. “There is a long-standing problem with agency drivers,” he says. “There are good ones and bad ones like in any other industry and sometimes with the bad ones, their lack of rigour in enforcing policies gives a route for drivers who want to break the rules. It is only a small part of the industry but is a serious issue and one the industry and government needs to address.”
The driver shortage has been particularly hindered this year by the implementation of the Working Time Directive in April, which has no real benefit to it in Turner’s opinion. “When it was first presented the government’s own research said it would be the single largest compliance cost the industry had ever seen, costing the industry in excess of £1bn. Lorry drivers hours have been restricted to 48 hours a week which is generally between 10 and 15 per cent less than what most drivers were doing,” he says. And the repercussions for the industry are huge both in terms of the decrease in product mobility and the loss of earnings for drivers. However, Turner says some drivers will have benefited from being able to demand higher wages so as not to walk away with any less money overall.
Despite the restrictions imposed by the directive, Turner says the situation has been appeased by the flexibility of the legislation, especially in terms of ‘the periods of availability’ clause which allows drivers to include time spent waiting for loading or unloading or in queues as time off from driving, enabling them to complete longer periods of work.
Both Turner and Olliff agree that in spite of these immensely inhibiting drawbacks, there are positives to note as well, for the fresh produce sector and for road transport at large.
“The good thing is that the temperature-controlled industry has evolved to the point where it is probably the most sophisticated in the world, and the public is able to enjoy the highest quality of goods in the world,” says Olliff. “And the price of that food is lower today than it has been for decades thanks to a combination of transport and manufacturing developments.”
Turner is equally proud of the industry’s achievements but he fears that without some significant financial injections, these will be irreversibly inhibited. “The positive thing is that despite all of these issues, we have some of the best supply chains in the world in this country, compared to other countries in Europe,” he concludes. “We have got the best supply chain management and they are doing their best but there has to come a point where our skills and brilliance are so hindered by the infrastructure that all of the parts of the chain will unravel.”
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