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 who bought a Euro V compliant vehicle by 30 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. 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 in conjunction with the Freight Transport Association and Road Haulage Association. 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. And hauliers also want to be included in the rebate scheme - currently extended to buses and trains - which would effectively lower the cost of their diesel by around 20-25p a litre.

According to the Burns Freight Taxes Report (2005), over 60% of hauliers were able to "substantially recover fuel costs" (see graph below).

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: The price of fuel has already fallen since it peaked in 2008, reducing road haulage costs. Making fuel cheaper still would be bad news for climate change and would reduce the incentive for road haulage to become more efficient.

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 2006 emissions from HGVs rose by 1 million tonnes, and from vans by 6 million tonnes, a massive 43%. Making fuel cheaper would 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 70% in the last 10 years - 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. A typical freight train can remove 50 Lorries from our roads and, per tonne carried, rail produces between one fifth and one tenth the emissions from road transport, according to Freight on Rail. Roll-on, roll-off rail freight (where lorries drive on, are carried by train and drive off at the other end) is also a serious possibility. Switching freight to this method of transport could decrease CO2 emissions (and fuel consumption) by as much as 70%.

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. There are a large number of hauliers, many self-employed or working for small businesses, with less clients and less sophisticated methods of filling their trucks. 26% of the time an articulated HGV is on the road it is empty, and their average load is just 58%.

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.