Better Transport

Let’s bust some myths about haulage:

• The Government is doing nothing to help the hauliers out
• The hauliers already pay too much tax
• The hauliers need a big cut in fuel duty to survive
• Rail freight is not a viable alternative to road haulage
• High oil prices have already forced hauliers to make big efficiency gains

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MYTH: The Government is doing nothing to help the hauliers out.

FACT: Hauliers already receive a lot of support from the Government, but there’s plenty more they could do. The Government rewards hauliers using cleaner vehicles, through its Reduced Pollution Certificate Scheme. This means that hauliers buying a Euro V compliant vehicle up to 31 September 2009 can claim a discount of up to £500 a year on Vehicle Excise Duty (VED).

VED rates for Heavy Goods Vehicles (HGVs) have been frozen since 2001 and will stay frozen for 2008/09. The Government also offers reduced fuel duty on supposed greener fuels, such as biofuels, compressed natural gas and liquefied petroleum gas.

There's still more the Government could do without cutting fuel duty. There used to be a road industry training board, and smaller hauliers still need help meeting the demands of operating licensing and training programmes. A national initiative to help train new and existing hauliers to drive more efficiently, modelled on the Government’s Act on CO2 programme, could be run under the Government umbrella with the FTA-RHA training. This could reduce emissions and fuel consumption, saving hauliers money and reducing the industry’s climate impact – a win-win situation for everyone.

MYTH: The hauliers already pay too much in tax.

FACT: Lorries are paying for only between a third and two-thirds of the damage they inflict on society in terms of congestion, road damage, environmental pollution and impact on other road users, leaving taxpayers to pick up the rest of the bill. Taking the lowest HGV costs and greatest tax income, calculations from various studies show that at best HGVs cover 61% of their costs - a shortfall of up to £3.35 billion a year.

Hauliers can claim back the VAT they pay at the pump, and many larger haulage companies buy diesel in bulk at a discounted rate – around £1.05 a litre in early April 2008 (according to the Road Haulage Association) when the pump price of diesel was around £1.17 a litre (according to the AA's fuel price report, a pdf).

According to the Burns Freight Taxes Report (pdf, page 39), over 60% of hauliers were able to "substantially recover fuel costs".

Meanwhile global oil prices are rising and are expected to keep going up in the long term. Making diesel cheaper for hauliers will just postpone the inevitable need to shift towards more efficient ways of transporting goods. The Government needs to help hauliers increase their efficiency – reducing emissions and fuel consumption – while investing in sustainable alternatives to road freight.

MYTH: The hauliers need a big cut in fuel duty to survive.

FACT: Making fuel cheaper will be bad news for climate change and the haulage industry in the long-term. The hauliers want to be included in the rebate scheme – currently extended to buses and trains – which would effectively lower the cost of their diesel by 20-25p a litre.

While cheaper diesel may be popular, it won’t solve the problems hauliers face from rising fuel prices. Strange as it sounds, high fuel duty actually shields UK motorists and hauliers from sharp rises in oil prices, because as oil prices rise, the tax percentage of the pump price decreases. This means that the price of fuel does not rise as quickly in the UK as it does elsewhere.

Cheaper fuel would be disastrous for the environment. Emissions from haulage are rising dramatically: According to the SMMT, between 1997 and 2005 emissions from vans rose by 3.3 million tonnes, or 24.4%, and from HGVs by 2.6 million tonnes, or 10%. Making fuel cheaper will reduce the incentives to drive efficiently.

MYTH: Rail freight is not a viable alternative to road haulage.

FACT: Rail freight is underfunded, but shows great potential. According to the Freight Transport Association, “Rail freight moves an estimated 43.5 million tonnes of goods to and from the UK’s ports. Sixty-five per cent of intercontinental trade to the north of England and beyond arrives by rail from the UK’s southern gateway ports.” (See its report on the importance of rail freight.)

Rail freight is growing – up 66% since the mid-1990s – but still represents just 12% of the UK’s surface transport. There are massive environmental benefits to be gained from shifting some freight on to trains, because a typical freight train can remove 50 Lorries from our roads and produces at least 80% less carbon dioxide, according to Freight on Rail.

Roll-on, roll-off freight-on-rail (where lorries drive on, are carried by train and drive off at the other end) is also a very serious possibility. Translink, promoting re-opening the Woodhead Tunnel to rail freight, predicts that shifting road haulage to roll-on, roll-off rail freight could decrease CO2 emissions (and fuel consumption) by over 70% or 100,000 tonnes per annum.

The Government needs to start laying the groundwork for more rail freight, making sure that new depots and ports are linked to the railway network. It also needs to stop using freight traffic as an excuse to expand the road network. The A14 in Cambridgeshire is plagued by heavy lorry traffic, moving from the port at Harwich up to the distribution network in the Midlands. The Government’s solution is to widen the road, costing around £1 billion, but there’s an under-used rail network already in place. Ditching the road scheme and investing in rail freight would reduce CO2 emissions and save millions of pounds.

MYTH: High oil prices have already forced hauliers to make big efficiency gains.

FACT: There’s still a long way to go. The haulage industry is incredibly competitive, and many hauliers are self-employed or work for small businesses, with less clients and less sophisticated methods of filling their trucks. 25% of the time an articulated HGV is on the road it is empty, and their average load is just 50%.

The Government could help hauliers by subsidising 'efficiency meters' which showed them how their driving affected their fuel efficiency. This would encourage haulage operators to reward efficient drivers, because they would be saving fuel costs as well as the environment.

The Government must provide hauliers with support to improve safety, efficiency, maintenance, aerodynamics and efficient driving techniques – all of which would reduce CO2 emissions and fuel consumption.