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Business Bulletin 1999-2011

Minutes of Proceedings 1999-2011

Journal of Parliamentary Proceedings Sessions 1 & 2

Committees Sessions 1, 2 & 3

Annual reports

SP Paper 619 LG/S2/06/R10
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Impact of the Road Transport Directive

150. The EU Working Time Directive was applied to road haulage operations in April 2005 (In this sector it is called the Road Transport Directive (RTD).   Road transport is the only sector in which it is not possible for companies to opt out of the regulations by striking local agreements with staff.  Many companies have claimed that the RTD has significantly inflated their road transport costs.  The RHA submission quoted the UK government’s estimate, made prior to the introduction of the directive, that application of the RTD would cost UK industry over £1 billion per annum.40   It appears that no attempt has been made to quantify the actual cost to industry over the past year at either a UK or Scottish level. 

151. Much of the written evidence submitted to the Committee by road haulage companies complains that the RTD has increased their operating costs. It is argued that the RTD has had a greater impact on road haulage operations to, from and within Scotland because of the country’s relative peripherality. As with fuel price rises, hauliers often find it difficult to recover additional costs associated with the RTD and so must absorb them within their profit margins.  No hard data has been presented to the inquiry on the extent to which the RTD has reduced the profitability of the Scottish road haulage industry.

152. The impact of the RTD appears to have been variable. The FTA indicated, with reference to lorry operators,  that—

‘The vast majority of them have managed to absorb its requirements into their systems. They have made provision for it and they have managed it quite well.’41

153. This is partly because the interpretation of ‘periods of availability’ (POA) in the RTD regulations by the UK government has given lorry operators greater operational flexibility than they originally anticipated.  For the average driver, according to the Road Haulage Association, POAs represent around—

‘about eight or nine hours a week’.42

154. This has enabled companies to adapt their logistical systems to the new regulations without too much disruption or additional cost.   It has been easier for larger companies to make these adjustments than smaller operators.  The FTA acknowledges that—

‘the smaller the operation, the more difficult people are finding it to comply with the working time directive.’43

155. Two sectors of the haulage market are also experiencing particular difficulty with the directive: those carrying timber and livestock.  The nature of these transport operations make it very difficult for companies to take advantage of the flexibility in the POA rules.  As the Confederation of Forest Industries explains—

‘Given the remote locations that forests are situated in and from which road wood hauliers must pick up loads, drivers must also double as crane operators and mechanics….Crucially, in terms of requirements of the WTD, drivers cannot use loading or unloading times as Periods of Availability… To comply with the Working Time Directive and to move the same amount of timber, hauliers have to employ additional drivers.  These drivers command wages higher than general hauliers’.44 

156. The resulting increase in transport costs is likely to constrain timber harvesting and have a negative effect on both the timber industry and Scottish economy as a whole. 

157. The movement of livestock by road is also being significantly affected by the RTD as drivers must attend to the animals when not driving.   POAs therefore represent a very small proportion of the typical shift for a truck driver in the livestock sector.

158. While companies operating lorries have complained about the new operational constraints imposed by the RTD, trade unions have argued that the new regulations are not strict enough and are not being adequately enforced.  The STUC and TGWU claimed that the RTD rules were too flexible, particularly the interpretation of POAs.  They suggested that too much emphasis has been placed on the costs of the RTD and not enough consideration given to the benefit of achieving a—

‘higher standard of health and safety in the road haulage industry’.45

159. They claim that a major opportunity to correct the ‘long-hours culture’ and to improve the working conditions of lorry drivers was being missed.   If these conditions were improved, it would be easier to attract new recruits to the haulage industry and ease the driver shortage.  The TGWU also contend that RTD is not being adequately enforced in Scotland.  Its representative claimed that he knew of—

‘no instance of VOSA asking to look at the working time records of any company’.46 

160. The members of the TGWU regularly draw attention to infringements of the regulations.

161. The Committee recognises that there is a delicate balance to be struck between the commercial interests of hauliers and shippers and the well-being of lorry drivers.   The condition of the driver also affects road safety and thus the welfare of the general public.  At minimum, therefore, the Vehicle and Operator Services Agency should be ensuring that the current Road Transport Directive rules are properly enforced in Scotland.   A means should also be found to ensure that foreign hauliers adhere to the UK’s RTD when operating vehicles in this country.

162. Two other RTD issues were raised.  The first relates to self-employed drivers being exempted from the RTD regulations until 2009. The FTA did not consider this to be a major anomaly as ‘self-employment was defined quite tightly’.47 Self-employed drivers must be free to work for any client.  This prevents larger hauliers and own-account operators from converting their drivers from employees to self-employed contractors.  A significant proportion of hauliers registered in Scotland, however, are ‘owner-drivers’ who do qualify for designation as ‘self-employed’.  They will not need to comply with RTD regulations for three more years.  The likely impact of this future extension of the RTD needs further investigation.

163. The second issue concerns the failure of some other EU countries to apply the WTD to the road haulage industry in 2005 as required by EU regulations.  Earlier this year, nine EU member states were taken to the European Court of Justice for non-compliance with the RTD.  It is likely to be much more difficult to enforce Britain’s RTD rules on foreign hauliers from these countries when they are operating on UK roads.  This is a cause for concern both for road safety and in terms of fair competition.

164. As the RTD involves the interpretation of an EU directive by the UK government, the Scottish Executive has no power to amend the regulations.  It could, nevertheless, commission research to establish its impact on the Scottish road haulage industry and liaise with the DfT on future modifications to the regulations.   The DfT is currently reviewing the RTD after its first full year of operation.  

165. The Committee recommends that the Scottish Executive should contribute to the Department for Transport’s review of the Road Transport Directive and ensure that the outcome of the review helps to establish the impact of the RTD on the Scottish haulage industry and on road safety.

Shortage of Lorry Drivers

166. Several written submissions highlighted the difficulty faced by hauliers in employing qualified HGV drivers.  The Federation of Small Businesses suggested ‘The inability to recruit drivers was mentioned as one of the top problems facing the haulage industry’.48  The impact that this lack of qualified drivers is having on hauliers was highlighted by several of the respondents, for example, R.A. Howie who stated that ‘To recruit suitable local men has been very difficult and we have had to go to the extreme of looking in Eastern Europe for staff49‘ while MacQueen Haulage ‘…have had to increase the hourly rate paid to my staff by 28% over the past 18 months to retain drivers.  This rate will have to go up again by at least 10% over the next year.  Again this is off my bottom line’.50

167. The TGWU indicated that they had not quantified the shortage though suggested that it could be as many as 4000 drivers. The RHA stated that—

‘Two or three years ago, it was in the region of 4,000 drivers, which was roughly 10 per cent of the driver pool.’51 

168. Since then the problem had eased, partly as a result of a joint initiative between the Scottish Executive, Skills for Logistics, the RHA and FTA which has been funded since 2001 by the Scottish Road Haulage Modernisation Fund.  A total of 1000 new drivers have been trained as part of this programme, roughly 10% of which are under 25 and covered by the ‘young drivers scheme’.  This has helped to alleviate the driver shortage.  The RHA stated that—

‘There are still a couple of years at least of funding left and we hope that the Executive will continue the funding until we can see the end of the tunnel on the driver shortage.’52 

169. It also praised the Executive for being—

‘really helpful in considering how it can help the industry’53

170. Figures from the Office of National Statistics Vacancy Survey reveal that in October 2004 there were 789 vacancies for large goods vehicle (LGV) drivers in Scotland.  Skills for Logistics estimate that in 2004 there were 26400 lorry drivers employed in Scotland.54  By February 2006, however, the number of vacancies had dropped to 329,  representing only around 1.2% of the driver population. It is questionable, therefore, whether a driver shortage still exists.  Shortages may be localised in particular areas. For example, two-thirds of the vacancies in February 2006 were in five areas: Lanarkshire (17%), Aberdeenshire (16%), Fife (15%), Edinburgh and Lothians (14%) and Tayside (6%).

171. Several witnesses argued that there is a significant shortage of drivers. However, information on vacancies contained in the Office of National Statistics Vacancy Survey, appears to indicate doubt as to whether there is still a driver shortage in the road haulage industry in Scotland.

172. Concern has also been expressed about the current age structure in the road haulage industry.  The average age of a lorry driver in Scotland is over 50 and the rate of recruitment of young drivers is relatively low.  According to statistics submitted by Skills for Logistics only around 3% of staff employed in ‘road freight transport’ in 2003/4 were between 16 and 24 years old.55 Companies are partly deterred from training / employing drivers under the age of 25 by high insurance premiums.  The RHA explained that—

‘The big problem with new drivers is that the insurance companies do not look too kindly on a driver who is under 25 and has less than two years' experience; they tend to load the premiums.’56 

173. It noted that legislation relating to age discrimination in the workplace would be coming into effect at the end of 2006 and that this might facilitate the recruitment and training of younger drivers.

174. Both the RHA and TGWU argued that the high cost of training and testing Class 1 lorry drivers was discouraging recruitment, particularly of younger drivers.  This cost has risen sharply in recently years and is often borne by the driver himself / herself.  TNT explained that—

‘There is now a cost differential that did not apply 10 years ago. An artificial logjam has been placed in the career choice; somebody who might have decided to become a lorry driver then might now think about going off into some other business in which they will not have to pay the entry fee and they will not face the same barrier to entry’.57

175. The Committee recommends that the Scottish Executive should work with the road haulage industry to examine ways of making it less costly for new drivers to enter the haulage industry, particularly those in the younger age groups. 

Growing Traffic Congestion on the Scottish Road Network

176. In written evidence, concerns were raised by many respondents about the ability of Scotland’s road network to support fast and reliable distribution of freight to, from and within the country.  Specific concerns have been raised about the trunk road network. The Scottish Council for Development and Industry considered that ‘At present there are too many missing links, pinch points and inadequacies throughout our trunk road network to conclude that what is provided is sufficient’58 Particular roads have been highlighted, from a freight standpoint, as requiring upgrading. For example, the Freight Transport Association highlights the A75, A7, A77, A82, A95, A96 and A9 as roads that ‘need upgrading and would benefit from increased speed limits’ for the benefit of the Scottish economy.59

177. Concerns were not limited to the trunk road network.  Issues were raised about the capacity and quality of the local road network particularly in remote rural areas  For example, Highland Council stated that ‘On the Council’s own network some 63% of the network is still of a single track and passing place standard with weak verges and inadequate passing places.’60 

178. In a report published in 2003 the Scottish Executive61 estimated that an average of 5 seconds was lost per vehicle-km as a result of traffic congestion on Scotland’s trunk road network. This is the average time lost per vehicle kilometre averaged over the year. No distinction was made between different types of vehicle. Assuming that this average applies to lorries, one can estimate that the mean delay to a lorry journey on the Scottish trunk road network would be around 6-7 minutes. The problem with congestion, however, is that it is not spread evenly across the road network and during the day. By definition it is concentrated on particular routes at peak times.   Also, when roads and junctions operate at or near full capacity, the risk of major traffic jams increases reducing the reliability of freight journey times.

179. HGVs account for only 6% of all the vehicle-kms run on Scotland’s roads, 14% if they (and buses) are assigned a weighting of 2.5 passenger car units (PCUs) to take account of their greater size62 (Figure 3).  On this basis, cars and vans account, respectively, for 72% and 14% of road traffic.   These classes of vehicle accounted for, respectively, 70% and 24% of the growth of road traffic between 1993 and 2004, with HGVs responsible for only 6%.  The growth of traffic congestion is, therefore, due mainly to increases in car and van traffic.   The concentration of lorry traffic on key routes at particular times of days can, nevertheless, increase its  relative contribution to congestion at major bottlenecks.

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180. Increasing congestion is clearly reducing the efficiency of road haulage operations in Scotland.  One of Scotland’s large logistics companies, The Malcolm Group Ltd., provided hard evidence of this—

‘We closely measure the productivity of our fleet, as every haulier does, so we know that for our tipper fleet, which operates in the central belt and Glasgow, productivity has gone down by as much as 20 per cent in five years as a result of congestion.’63

181. Roads have become more congested at a time when companies have been tightening delivery schedules and relying more heavily on just-in-time (JIT) replenishment.  The CBI noted that ‘hauliers are expected to provide the high levels of service that manufacturing industry, for example, needs to develop the just-in-time production processes that enable them to remain competitive.  These demands are not unique to Scottish hauliers.  Their counterparts elsewhere in the UK and Europe will have to respond to the very same demands.’  As congestion mounts, hauliers are often forced to build extra slack into their delivery schedules and, rather perversely, put extra lorries onto the road to provide on-time delivery.  Many complain that they are not adequately compensated for the additional cost of these measures.  This puts further pressure on their profit margins.

182. Hauliers’ ability to adapt their delivery operations to increasing congestion is also being constrained by the Road Transport Directive.  This was acknowledged by The Malcolm Group Ltd—

‘because of the combination of restrictive practices that are in place, the latest of which is the working time directive, every minute of our day is valuable. In our marketplace, we do not have control over congestion, which results from, among other things, road works and volume of traffic, but our customers still expect our vehicles to be there at 8 o'clock or whenever.’64

183. Several witnesses blamed road works for much of the congestion.  Thompson Haulage, for example, claimed that—

‘drivers can easily spend two hours on the Edinburgh bypass when road works are being carried out. We can lose a load—perhaps two loads—a day purely as a result of congestion that has been caused by the condition of a road.’65

184. John G. Russell Transport Ltd. also argued, with reference to road maintenance that ‘we not only spend less in Scotland, but we suffer because people have to repair roads more regularly, which creates major delays’.

185. The Committee recognises that increasing traffic levels on Scotland’s roads pose an additional problem for the haulage industry.  The search for long-term solutions to the traffic congestion problem goes beyond the remit of the current inquiry and relates at least as much to personal as to freight movement.  New road construction schemes and road pricing proposals are essentially long term measures and would have to be appraised with respect to both freight and passenger traffic.  There are, nevertheless, several congestion-relief measures that could yield particular benefits to freight traffic and could possibly be given greater priority in the short to medium term.

186. In some urban areas it may be possible to grant freight vehicles access to bus lanes, effectively converting them into ‘non-car’ lanes and permitting more efficient use of road space. Such lanes have operated successfully in Newcastle-upon-Tyne for several years. A similar lane was proposed for King Street in Aberdeen, though it failed to receive approval.

187. The Committee recommends that the Scottish Executive should investigate the operation of ‘non-car’ lane schemes with a view to considering whether they might benefit the Scottish road freight industry and help to alleviate congestion.

188. Across the UK as a whole the proportion of lorry journeys made between 8pm and 6am has been increasing for many years partly in response to mounting day-time congestion, but also to take advantage of the move to 24 hour operation in factories, warehouses and shops.  As lorries have become much quieter over the past twenty years, the risk of people being disturbed by night-time deliveries has declined.  Out-of-hours deliveries to many premises in urban areas are still prohibited, however, by night curfews.  The RHA notes that in ‘towns across Scotland’ delivery curfews and access restrictions make ‘urban deliveries increasingly difficult and costly’.66 

189. The Committee recommends that the Scottish Executive encourage local authorities and regional transport partnerships to review existing restrictions on night delivery and, where appropriate, consider their relaxation.   It should also work with trade associations to develop a best-practice guide for night-time delivery in Scottish towns and cities.

190. The real-time Traffic Scotland driver information system (formerly known as NADICS) is already regarded by many fleet managers as being a useful tool, particularly for routing and scheduling lorries in congested parts of the central Scotland road network.

191. The Committee recommends that the Scottish Executive promotes the use of telematics to provide companies and lorry drivers with more information about traffic conditions and improve the management of traffic flows on the Scottish road network.   

192. Rapid response measures can be used to clear blockages on the road network more quickly and thus reduce the variability of transit times. They are  beneficial for all categories of traffic, but can yield significant economic advantages for time-sensitive freight deliveries. 

193. The Committee recommends that the Scottish Executive should consider whether more resources can be usefully allocated to ‘rapid response’ measures.

194. The Committee recognises that, while the measures outlined above will help to ease the congestion problem, they will not provide a complete solution.  Further capacity will have to be added to key links in the network to relieve congestion.  In the longer term, road pricing may also be used to manage road space in a way that prioritises the movement of freight. It is beyond the remit of this inquiry, however, to examine the wider issue of road pricing.

195. Other issues relating to the Scottish road network are discussed in the next section.

The Scottish Road Network

Speed Limits for Lorries

196. Speed limits for HGVs are 40mph on single carriageway roads and 50mph on dual carriageway roads. On motorways, lorries over 12 tonnes are required to be fitted with speed limiters which restrict their speed to a maximum of 56 mph. These distinctions are particularly significant in Scotland as a much smaller proportion of its road network is built to motorway or dual carriageway standard than in Great Britain as a whole and a much large proportion is single carriageway  (Figure 4).  Many of Scotland’s strategic road links, particularly serving the Highlands and Borders, have a single carriageway and carry a 40 mph speed limit for lorries.  This can significantly increase transit times for road deliveries.  For example, raising the speed limit on the A9 between Perth and Inverness could cut the average freight journey time by around 30 minutes. It would reduce the ‘platooning effect’, noted by SCDI67, and ease the general traffic flow on single carriageway roads.

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197. In addition to improving vehicle and driver productivity, this measure would also allow lorries to travel at more fuel-efficient speeds.  The Malcolm Group Ltd asserted that—

‘On costs, the vehicles of today run at their optimum level at about 50mph. At 40mph, an HGV is labouring and costs more to operate.’68  

198. A reduction in fuel consumption would not only save money, but also cut the level of exhaust emissions.
With reference to single carriageway roads, the FTA argued that—

‘It would be a great help if the speed limit for heavy goods vehicles were increased. The current speed limits were introduced several decades ago, and vehicle quality, braking standards and so on are much better now than they were then. It is, in fact, a danger to road safety to have such a differential between the speed limits for goods vehicles and other cars.’69 

200. Its representative went on to cite the case of New Zealand which in 2004 raised the speed limit for several categories of lorry to 90 km per hour on all roads (including single-carriageway roads).

201. A request was made to the New Zealand Transport Ministry for more information about this measure.  According to a New Zealand government official, the main justification for the increase in truck speed limit was that crash rates are more closely linked to the speed differential and having most traffic travelling around the same speed  reduced the need for overtaking and created a safer traffic environment.  He went on to say, however, that, there was also in general minimal enforcement of the 80km/h limit for heavy vehicles.  Policing of the 40mph speed limit for lorries on roads such as the A9 also appears lax.  A representative of SCOTS admitted that the —

‘limit is fairly widely not observed, so one wonders whether increasing the limit to 50mph would make any difference, in practice.’70 

202. However, according to the FTA, the Vehicle and Operator Services Agency adopts a much stricter approach and has—

‘attempted to take action against operators whose tachograph charts show that their vehicles are exceeding 40mph.’71

203. Having a de facto speed limit of 50mph and different enforcement agencies applying differing rules is clearly unsatisfactory. In New Zealand, the raising of speed limits for trucks was accompanied by a tighter enforcement regime, with a reduction in ‘speed enforcement tolerance’ from 10 km per hour to 5 km per hour. If the speed limit were to be raised on some single carriageway roads in Scotland, a similar policy should be adopted here.

204. A sound economic case can be made for increasing the lorry speed limit on strategic single carriageway roads such as the A9.  The implications for road safety are less clear.  It has been argued that the current difference in speed limits between cars and lorries increases the risk of accidents partly because it results in car drivers making dangerous overtaking manoeuvres and causes greater frustration and fatigue in lorry drivers. While this seems plausible, the Committee has been unable to find hard scientific evidence to back up these claims. 

205. The Committee recommends that the Scottish Executive commission a cost-benefit analysis of an increase in lorry speed limits on strategic single-carriageway roads, particularly the A9 between Perth and Inverness. A thorough study of the impact on road safety must be an essential part of the analysis.

206. The FTA claimed that by giving a strategic single carriageway route ‘special road status’ the Executive might have the power to alter the speed limit for lorries.  The Executive denies this.  It argued in oral evidence that—

‘Following an earlier request by the FTA, an investigation was carried out into the possibility of raising speed limits on the A9 and the feasibility of a special road classification. The investigations proved that the matter is reserved to Westminster and falls under the Road Traffic Regulation Act 1984. Even if the A9 was classified as a special road, as is the case with the Edinburgh city bypass, the speed limits that apply in the 1984 Act would still apply. There may be further work to be done on the matter, but we have no evidence, other than that’.72  

207. The Committee recommends that the Executive further reviews the  legal position in relation to speed limits on lorries operating on the Scottish road network. In its response to this report, the Executive should clarify the legal position on lorry speed limits in Scotland and where the relative legislative powers lie between the UK and Scottish Parliaments.

Forth Road Bridge

208. The Forth Estuary Transport Authority has indicated that there is a possibility that heavy lorries will be banned from the Forth Road Bridge in 2013 as a result of corrosion to the cabling.  This is naturally a matter of serious concern to the road haulage industry.  In his oral evidence to the Committee, the Transport Minister accepted that there was a risk that lorry movements on the bridge might have to be restricted before the construction of a new crossing could be completed, if that were necessary. He said—

‘Yes, there is a risk. The exercises that are now being undertaken are to minimise that risk and to take appropriate remedial action. We will not know—nor, will the bridge master know—where we are until those studies are complete.’73

209. He, nevertheless, assured the Committee that—

‘It is not in the interests of central Government or local government on either side of the Forth to have any disruption to the normal movement of traffic. We will do everything that we can to ensure that that does not happen.’74 

210.Some companies are already making contingency plans for the possible closure of the Bridge to heavy lorry traffic. Julia Williams of Diageo told the Committee that:

‘We also recognise that the risk of the Forth Road Bridge being closed to heavy goods vehicles has been flagged up.  We do not know whether another bridge will be built, but such a closure would clearly put a lot of pressure on Kincardine Bridge.  We are having to explore all opportunities to take as much cargo off the road as we can, especially to Fife , where we have a large bottling operation’75 .

211. The Committee recognises the paramount economic importance of the Forth Road Bridge to the Scottish economy. It notes the position of the Scottish Executive on the consequences of Bridge corrosion and requests that, in its response to this report, the Executive outlines its proposed courses of action and timeframes to deal with this problem.

Bridge Checking and Strengthening Programme for 44 tonne Lorries

212. The maximum weight of lorries (with six axles) increased from 41 tonnes to 44 tonnes in February 2001.  A programme of bridge checking and strengthening has been underway for many years to prepare the road network for this maximum weight increase.  Several witnesses have commented that this programme is yet to be completed and that, as a consequence, weight restrictions are imposed on some bridges. In its oral evidence, the Trunk Road Network Maintenance Directorate indicated its programme of bridge strengthening on the trunk network ‘is directly connected to the 44-tonne vehicle limit’ and that it is ‘about halfway through that programme’.76  Depending on the availability of funding, the aim is to complete this programme by 2010.  According to TRNMD, ‘no trunk road bridge has a weight limit’  although some are being closely monitored.  Numerous bridges on the non-trunk network, particularly in the Highlands, Borders and Dumfries and Galloway, are subject to a weight restriction.  The representative of SCOTS acknowledged that—

‘upgrading a bridge can cost a huge amount from the local authority's budget’ and ‘it is difficult to get the political priority to spend that money because the sums involved are so huge and the benefits are not always tangible.’77

213. Local authorities are strengthening bridges on a ‘case-by-case basis’ where an economic case can be made for the improvement.  The SCOTS spokesman said that he—

‘would be surprised if there were many cases in which local authorities were not repairing bridges and that was hurting the local economy’.78  

214. This approach to bridge strengthening should ensure that local roads budgets are spent on schemes that yield the greatest benefit. 

215. The Committee recommends that both Transport Scotland and local authorities accelerate the programme of bridge checking and strengthening to allow as many parts of Scotland as possible to enjoy the economic benefits that accrue from the use of heavier trucks.  This applies particularly to rural areas likely to experience a sharp increase in timber traffic over the next few years. 

216. Several written submissions to the Committee, most notably that from EWS, expressed concern about the possible increase in maximum lorry weight beyond 44 tonnes.  The Department for Transport (DfT), which has responsibility for vehicle Construction and Use Regulations, had received applications from an English road haulier to trial a ‘long combination vehicle’ that could run with a maximum weight of 60 tonnes.   In December 2005, the DfT rejected this application.  For this reason, the Committee does not consider it necessary to comment further on this matter.

Provision of Road-side Facilities for Lorry Drivers

217. The FTA, RHA and trade unions have drawn attention to the fact that provision of road-side facilities for lorries is poor in many parts of Scotland.   These facilities include parking, toilets and washrooms, catering and overnight accommodation.  The TGWU emphasized that there should be ‘adequate and affordable roadside facilities, and better parking facilities in all local authority areas’.   If these were provided, working conditions in the road haulage industry would be greatly improved.  Particular sections of road carrying large volumes of truck traffic were highlighted—

‘there is one set of proper services along the whole length of the M8—at Harthill. There are probably only 15 or 20 spaces for trucks at Harthill services, although there are many trucks on the M8. Although there is an incredible amount of transport on the A9 from Perth to Inverness, there are no proper facilities where truckers can stop and get something to eat. Similarly, on the A90 to Aberdeen, there are a couple of cafes with some bits of waste ground, but such facilities are not adequate.’79

218. On the other hand, the representative of SCOTS claimed that there was—

‘very good overnight lorry facility on the Kingsway in Dundee, but many lorry drivers park their lorries overnight and sleep in their cabs within 2 miles of it’.  This, he suspected, was due to a ‘cost issue’.80

219. In the absence of dedicated overnight parking, lorries are often forced to park in unsuitable locations.  Drivers may also be more likely comply with drivers’ hours regulations if they have access to more road-side facilities.   They are also likely to drive more safely if well fed and rested.  The provision of these facilities can therefore yield wider social and environmental benefits.

220. As explained by the TGWU, the overnight and catering allowances made to lorry drivers are relatively low and this is likely to have deterred private sector investment in these facilities.  A joint public-private sector initiative might result in greater roadside provision for lorry drivers at affordable prices.  

221. The Committee believes that there is a case for greater public intervention to promote the development of road-side facilities for lorries in Scotland. 

RAIL freight

Nature and Volume of Rail Freight Traffic

222. In 2003/4, the last year for which there are statistics, the Scottish rail network carried 8.33 million tonnes of freight.  This was 66% more tonnage than in 1993/4 but 15% below the post-rail privatisation peak of 9.57 million tonnes carried in 2001/2.   Minerals, mainly coal, accounted for three-quarters of rail freight tonnage in 2003/4.  Indeed coal accounted for almost all the growth in rail freight traffic over the previous decade.  In recent years there has been a sharp increase in the amount of imported coal moved by rail from the Hunterston terminal to power stations in the English Midlands.  Rail has also been successful in capturing new retail traffic from companies such as ASDA, IKEA and Tesco for distribution to their warehouses and shops in Scotland.  This has been done in partnership with road-based logistics companies.

223. The volumes of international rail freight traffic travelling to and from Scotland via the Channel Tunnel have sharply declined (to below 0.5 million tonnes in 2003/4).  EWS identified the major reason for this reduction during oral evidence to the Committee—

‘As far as the channel tunnel is concerned, the problem with illegal immigrants reduced the traffic to a third of what it had been. The average number of trains per day came down from more than 20 to fewer than 10. At the height of the crisis, we virtually stopped running trains through the tunnel; we operated only one or two trains a day. The operation has recovered—if you can call it that—to the extent that we now run eight trains a day. That is hardly a good utilisation of an asset that each day has available five or six times that number of paths for freight traffic.’81

224. The volumes of rail container traffic handled at Freightliner’s Coatbridge Terminal have dropped sharply from their peak of 113,000 containers in 1999 to 55,000 in 2002. The reasons for this drop were explained by Freightliner in oral evidence to the Committee—

‘Hatfield (i.e. the Hatfield rail crash and subsequent programme of track upgrading) had a huge effect on our business. The difficulty was that its impact went on for so long. If the problems had been sorted out in a week or 10 days, customers would have stuck with us, but they were not’82

225. However they did go on to say that—

‘We are starting to build the business back up, but it has been a long haul.’83

226. Despite recent efforts to diversify by product type and industry sector, the Scottish rail freight market remains, in tonnage terms, heavily dependent on coal traffic. 

227. Rail’s share of the Scottish freight market almost doubled between 1993/4 and 2001/2, but in 2003/4 was still only around 4% (Figure 5).   It is often argued, however, that such modal split calculations seriously under-estimate the rail contribution to the freight transport system.  Rail, after all, cannot compete for most of the freight distributed short distances in small quantities between non-rail-connected premises.  Rail accounts for a much larger proportion of longer distance, bulk movements. 
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Management of Scottish Rail Infrastructure

228. Network Rail is responsible for managing the nation’s rail infrastructure. In Scotland this comprises roughly 5500km of track, approximately 3040 route km. In October 2005, responsibility for the funding and specification of Scotland’s rail infrastructure was devolved to Scottish Ministers, who will exercise these functions through the newly created Transport Scotland. 

229. Transport Scotland aims to—

‘ensure that Scotland's trunk road and railway systems are managed efficiently, effectively and economically’.84

230. Network Rail must operate within a financial and performance framework established by Transport Scotland. 

231. Responsibility for regulating the rail network remains with the Office of Rail Regulation (ORR).  One of its major tasks is to set Network Rail’s charges and outputs.  The ORR explained how this system would work in oral evidence to the Committee.  During the summer of 2006 the Scottish Executive will tell ORR ‘what they want the railway to achieve in Scotland and how much money they have available’85.  The ORR will then ‘have to determine what Network Rail will have to deliver to achieve that in the most efficient way and how much Network Rail should be paid in access charges’86.  Scottish Ministers have yet to ‘decide on the extent to which they want to make funds available specifically for freight and what mechanism they want to use’.87

232. The Committee strongly encourages the Scottish Executive to take full account of the interests of the rail freight industry when outlining its expectations to the Office of Rail Regulation.

233. Several witnesses have alerted the Committee to the possibility that these rail freight interests will be subordinated to the goal of expanding passenger services on the Scottish rail network, e.g. EWS warned in written evidence of a—

‘scenario where train planning and use of capacity on the rail network is directed for the benefit of one passenger rail operator’ and urged the Scottish Executive to match ‘its enthusiasm to delivery for the passenger railway’ with ‘a commitment to deliver a railway that meets the needs of a growing rail freight market’.88

234. The East Coast Main Line (ECML) train operator GNER, on the other hand, suggest in written evidence that there is a need to review the ‘present usage of paths already allocated to freight trains on the rail network and whether they are being fully utilised on a daily basis’.89   GNER also fears that as a result of the growth of coal traffic on the rail network and poor condition of the Settle-Carlisle line which carries most of the coal trains south of the border, more of these trains will occasionally be diverted onto the ECML.  This might cause delays to its passenger services. 

235. The Committee notes the Rail Freight Group’s argument made in written evidence to the Committee that there is a—

‘need for even-handedness in dealing with the demand for paths between railfreight and rail passenger business’.90  

236. The Committee recommends that the Scottish Executive, Transport Scotland and the Office of Rail Regulation should take account of the interests of both rail freight and passenger transport in maximising the benefit of rail transport to Scotland.  In particular, attention should be given to infrastructural investments which benefit both categories of traffic. 

237. In its written evidence to the Committee, First Scotrail complained that the reliability of passenger train services was being impaired by rail freight services in Scotland—

‘The recent pattern is therefore one of increased delays for passenger services arising from additional freight traffic and in some cases compounded by non-optimal planning and regulation.  Recent and ongoing actions will hopefully address and reduce the elements of delay associated with the planning and regulation issues but will not remove the effects of the overall increase in freight’91

238. Break-downs and late running by freight trains were blamed for a large proportion of the delays on the network.  First Scotrail claimed that freight operators accounted for two-thirds of the delays caused to its services by other Train Operating Companies (TOCs).  Coal traffic, running between Ayrshire and Longannet for English power stations, constituted 43% of the delays.  The number of delays had also been rising sharply. Between 2003/4 and 2005 it rose by just over 60%, mainly as a result of the growth of coal traffic.

239. This issue was raised with representatives of EWS and Network Rail.  With reference to more recent data from the railway’s  ‘TRUST delay attribution system’, EWS claimed in oral evidence to the Committee that the effect on Scotrail of EWS operations has reduced by 35% since September last year92. This had been achieved partly by collaboration between the train operating companies, but also by rescheduling freight trains.  Network Rail confirmed that, as a result of the introduction of a new timetable on the Glasgow and South-Western Line and ‘repathing of trains….the problem has gone away’93 in that area.  

240. The Committee commends the rail industry for working together to solve the problem of delays, but recognizes that, as the volumes of passenger and freight traffic on the Scottish rail network increase, this issue may arise again and may require fundamental changes to both timetabling procedures and the delay attribution system.

Capacity of the Scottish Rail Network

241. One issue that has been of particular interest to the Committee is the ability of the Scottish rail network to accommodate future growth in rail freight volumes.  The Rail Freight Group, in its written evidence, provided route maps showing substantial increases in the numbers of freight trains on a number of key routes.   On the basis of research undertaken by MDS Transmodal, it projected a doubling of the number of freight trains on the line between Dundee and Aberdeen and 75% increase on the Scottish section of the West Coast Main Line by 2014.  EWS told the Committee that—

‘We are somewhere near the tipping point at which the economic advantage of roads tips over into the economic advantages of rail’.94

242. This suggests that we are on the eve of a major rail freight revival.  If this is so, we need to ensure that Scotland’s rail system can cope with the anticipated growth.

243. Network Rail is currently formulating a series of Route Utilisation Strategies (RUS).  One is being developed for the Scottish rail network while another will address the needs of rail freight operations across the UK as whole.  These strategies will not be published until later this year. In oral evidence to the Committee, however, Network Rail stated that—

‘in general we do not think that there are major issues with accommodating the growth in freight traffic’95.

244. The Office of Rail Regulation also argued that—

‘there is a lot of spare capacity, but there will always be pinch points’96.  

245. Several of these ‘pinch points’ generated a good deal of discussion during the Inquiry, particularly:

Glasgow South Western Rail Line

246. The importance of this line, which runs from Glasgow through Kilmarnock and Dumfries to Carlisle, has increased from a freight standpoint, mainly as a result of two developments:

  • The sharp increase in the amount of coal traffic travelling between Ayrshire and power stations in Yorkshire and the Midlands.  Sections of the line are single-tracked, seriously limiting the available capacity, particularly around Gretna. Capacity could be increased by adding new passing loops, lengthening existing loops and / or dualling sections of the track.
  • Need for an alternative route for 9’6” containers currently using the West Coast Main Line (WCML) during periods when the WCML is out of action as a result of track maintenance or accidents.   The loading gauge on the GSW line would need to be expanded to accommodate these larger containers.  The provision of alternative routes will improve the resilience of rail freight services in the event of disruption, making them more competitive particularly to companies whose logistics operations are very time-sensitive. The development of a deep-sea container port at Hunterston, as currently proposed by Clydeport, would greatly strengthen the case for gauge enhancement.

247. Network Rail explained in oral evidence to the Committee that the case for upgrading the GSW line was being assessed as part of the Freight RUS which would be published in September 2006.  It indicated, however, that it would require only modest and relatively inexpensive changes to the line to accommodate the growth in coal traffic.  Reinstating the twin track in the vicinity of Gretna, for example, would cost—

‘in the order of £10 million to £15 million’97.

248. Although this would—

‘provide some performance benefits, it would not provide a great deal of additional capacity’98

249. There may also be a possibility to move more timber traffic onto this line.  On the other hand, the port of Immingham is expanding its bulk terminal to handle more imported coal.  As it is much closer to the main English coal-fired power stations, it may capture some of the coal traffic currently imported through Hunterston.  The number of coal trains on the GSW line may therefore decline over the next few years, weakening the case for new capital investment. 

250. Expanding the loading gauge to handle 9’6” containers would be much more expensive.  Network Rail indicated in oral evidence to the Committee that these works would cost ‘considerably more’99 than the £25 million gauge enhancements required to allow for the running of Pendolino passenger trains.  The Freight RUS will contain cost estimates and appraisals of upgrading options for the GSW.

251. The Committee recognises that a number of witnesses expressed the view that upgrading the Glasgow South Western Line should be top priority for investment in the rail freight sector. It, however, reserves comment on the case for upgrading the GSW until Network Rail publishes its Route Utilisation Strategy documents and Ministers have had the opportunity to examine in detail the arguments and costs.

Forth Bridge

252. There is currently a shortage of capacity on the Forth Bridge.  This was to be partly alleviated by the reopening of the Stirling-Alloa-Kincardine line, which will cost around £60 million.  This line would allow freight operators to run coal trains more directly from Ayrshire to Longannet power station without the need to go via the Forth Bridge.  Capacity would then be released on the Forth Bridge for more passenger services.

253. EWS has recently announced, however, that, because of the proposed imposition of an additional charge for the use of the reopened Stirling-Alloa-Kincardine line that it may continue to send its trains over the Forth Bridge.  It has the right to use its current pathways on the bridge until 2015.   Network Rail confirmed that they ‘are seeking a differential pricing mechanism for a new bit of railway’100.  This would be the first time that a freight operator is to be charged for using a new section of line.   Iain Coucher, Deputy Chief Executive of Network Rail indicated in oral evidence that, as far as he was aware, ‘there are no other instances of seeking to recover incremental benefit and pass on higher tolls to freight operators’101.  

254. The Chief Executive of Transport Scotland agreed that ‘a precedent would be set’102.  He explained that—

‘The basic point to get across is that EWS's track access agreement covers only the network as it was on 1 October 2001. The Stirling-Alloa-Kincardine line is an addition to the network so we feel that, in principle, there is a basis for charging for the use of that asset, which has been provided by the taxpayer.’103

255. This contradicts the assurance given in the form of a written answer by Nicol Stephen MSP, then Transport Minister, in 2003 that ‘there is no intention to impose toll charges on the Stirling to Alloa to Kincardine line.’104  This matter has been referred to the Office of Rail Regulation and is awaiting adjudication. 

256. The Head of Transport Scotland also told the Committee that there was ‘certainly no intention that the total cost to EWS should increase as a result of any arrangement to which we come through the ORR’105. If endorsed by the ORR, this commitment may encourage EWS to switch its coal trains to the faster and more direct route.

257. In the Committee’s view it is essential that the issue of rail line utilisation and charging is resolved in a manner which ensures that both rail passengers and freight users derive maximum benefit from the large public investment in the Stirling-Alloa-Kincardine line. The Committee recommends that the Scottish Executive, in its response to this report, indicates how this situation is being resolved. 

Highland and North-East Rail Lines

258. Highlands and Island Enterprise stated in written evidence that—

‘in 2004 the equivalent of around 29,000 lorry loads per annum were conveyed by rail in the Highlands and Islands, effectively removing 7.9 million lorry road miles from the region’s road network’.106

259. Despite a decline in rail tonnage in 2005, there is optimism that rail freight services in the Highlands can be expanded, e.g. the Highland Rail Partnership (HRP) stated in written evidence that—

‘Rail can seize a greater share of the freight market if it can overcome the high start up costs for new operations’

260. Plans are currently well advanced for the development of an intermodal rail terminal in Inverness, though this is still awaiting planning approval.  For this terminal to be accessible to the new generation of larger containers, it will be necessary to enlarge the loading gauge on either the Perth to Inverness line or Inverness-Elgin line.  Gauge enhancement is likely to be expensive on the Perth-Inverness line partly because of the expense associated with upgrading the Killicrankie Tunnel.  A more cost-effective option might be to extend the gauge enhancement works already agreed on the line between Aberdeen and Elgin all the way to Inverness. Although larger containers would then have to follow a more circuitous route to Inverness, the transit time penalty would be quite modest and probably justified by a significant saving in infrastructure costs.  HITRANS argue in written evidence that—

‘there will be opportunities for rail to take a bigger share of freight in the future by investing in capacity improvement to the Highland main line and the re-gauging between Inverness and Elgin’. 107

261. The insertion of more passing loops for freight trains on Highland and North East lines could significantly increase capacity. The Committee expects this to  be investigated in Network Rail’s Rail Utilisation Strategy.

Channel Tunnel Rail Freight Traffic

262. The future of Channel Tunnel rail freight services is currently in doubt over the issue of Minimum Usage Charges (MUCs). These charges were agreed with Eurotunnel and the British and French governments twelve years ago, on the assumption that a total of 5 million tonnes of rail freight would pass through the Tunnel annually.  The actual amount is much lower (only 1.89 million tonnes in 2004).  At present the UK government pays EWS (the sole freight operator using the Tunnel) £26.5 million per annum towards the MUCs, but this arrangement will end in November 2006.  If negotiations between the French and UK governments, EWS and Eurotunnel cannot be satisfactorily resolved, there is a possibility that rail freight services through the Tunnel will cease by the end of this year.  EWS has confirmed that, without government support, ‘the traffic could not stand the level of cost’108.  Its position, however, is that ‘it wishes to retain and build its Channel Tunnel traffic’109.  As a sign of its commitment to international rail freight services, EWS has recently set up a rail freight operation in France (Euro Cargo Rail) and will be establishing similar operations in Belgium and Germany by the end of this year.

263. As discussed at the start of the Rail section of this report, Scottish companies currently make relatively little use of international rail freight services. 

264. The Committee believes that there is good potential to develop rail freight services, particularly with increasing congestion on the English road network, higher fuel prices and the liberalisation of the European rail freight market. 

265. Rail has a comparative advantage in long haul movement and should be able to capture a much larger share of the international freight market.   The European Commission’s Marco Polo II programme, which between 2007 and 2013 will have a €700m budget, will promote the development of cross-border inter modal freight services, many involving the use of rail. A direct rail link to the Continent also gives Scotland a competitive advantage over the Irish Republic, one of its main rivals for inward investment.

266. On the other hand, at current levels of MUC, Channel Tunnel rail freight traffic receives an excessive subsidy from the State.  This is unsustainable in the longer term and distorts the cross-Channel freight market.  Any subsidy to Channel Tunnel freight trains should be temporary and related to the actual volumes of traffic.

267. Although the renegotiation of Minimum Usage Charges is essentially a matter for the UK government, the Committee believes that the future of the Channel Tunnel is of sufficient relevance to the Scottish economy, that the Scottish Executive should work with the Department for Transport to try to ensure that rail freight services through the Tunnel are maintained and expanded.

Freight Facilities Grants

268. Freight Facilities Grants (FFGs) were introduced in 1974 ‘to promote the transfer of goods from road to rail by providing financial support for the purchase of new assets or the replacement of existing assets necessary for the carriage of rail freight. These might include internal rail sidings, handling equipment, wagons and locomotives, containers, swapbodies, storage facilities/warehousing, rail terminal access roads and other infrastructure’.110 Grants are used to ‘tip the balance’ between the cost of road and rail operations where it can be demonstrated that there are ‘environmental, safety and decongestion’ benefits from the use of rail.  These environmental benefits are calculated by estimating the number of ‘sensitive lorry miles’ saved and multiplying it by a monetary value per mile for different types of road.

269. In England and Wales, the FFG scheme was suspended, mainly for budgetary reasons, in March 2003 and, according to the DfT website, ‘is unlikely to be reopened before 2007’. The scheme has continued to operate in Scotland, with ten awards made between March 2003 and January 2006 for rail freight developments. The Scottish Executive estimates that its FFGs have removed around 70 million lorry-miles from the Scottish road network. 

270. Some witnesses claimed that the process of applying for FFGs was complicated and time-consuming. Cllr Alastair Watson, Chair of the Strathclyde Partnership for Transport, stated—

‘I have talked to experts in the field, including large hauliers such as John G Russell (Transport) Ltd over at Mossend and WH Malcolm, and have heard that the system for qualifying for the grant is bureaucratic and cumbersome and that many smaller and medium-sized hauliers just shy away from it.’111

271. Diageo also indicated that it needed more assistance ‘to understand what grants are available’112.  It is keen to use rail for freight movements to and from Leven where it has a large bottling operation.

272. The Scottish Executive, however, claimed in oral evidence to the Committee that it has recently streamlined the application procedure.  It cites the case of the latest application to be approved, that from Eddie Stobart Ltd. to move Tesco supplies from Daventry to Scotland by rail, which took only 9 weeks to process113. The Committee seeks clarification from the Scottish Executive on how long it would have taken to process such an application two or three years ago.

273. The Committee is supportive of the Freight Facilities Grant scheme for rail freight and believes that the Scottish Executive was right to maintain it despite its suspension south of the border.

274. While recognising that road haulage will remain the dominant mode of freight transport in Scotland, the Committee favours a modal shift to rail and believes that the Freight Facilities Grant offers an effective means of achieving this.

275. The Committee is, nevertheless, concerned that the Scottish Executive may not adequately assess the environmental and social benefits that actually accrue from developments financed by FFGs and recommends that the Scottish Executive undertake a review of the scheme to assess whether or not it remains a cost-effective means of securing environmental benefits in the transport sector. It may be timely to conduct such a audit as the most beneficial schemes have probably now been funded and as future applications may be likely to yield lower returns and prove more risky.

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Footnotes:


40 Road Haulage Association written evidence

41 OR Col 3439

42 OR Col 3448

43 OR Col 3439

44 Confederation of Forest Industries written evidence

45 OR Col 3553

46 OR Col 3551

47 OR Col 3439

48 Federation of Small Businesses written evidence

49 R A Howie written evidence

50 MacQueen Haulage written evidence

51 OR Col 3460

52 Ibid

53 Ibid

54 Skills for Logistics written evidence

55 Ibid

56 OR Col 3460

57 OR Col 3682

58 Scottish Council for Development and Industry written evidence

59 Freight Transport Association written evidence

60 Highland Council written submission

61 Congestion on Scottish Trunk Roads 2003

62 Scottish Executive ‘Scottish Transport Statistics 2005’  Edinburgh

63 OR Col 3482

64 OR Col 3480

65 OR Col 3451

66 Road Haulage Association written evidence

67 SCDI Written Evidence

68 OR Col 3481

69 OR Col 3433

70 OR Col 3716

71 OR Col 3434

72 OR Col 3732

73 OR Col 3728

74 OR Col 3729

75 OR Col 3408

76 OR Col 3682

77 OR Col 3719

78 OR Col 3719

79 OR Col 3557

80 OR Col 3721

81 OR Col. 3465

82 Ibid

83 Ibid

84 Our Vision , Transport Scotland

85 OR Col. 3450

86 Ibid

87 OR Col. 3451

88 EWS written evidence

89 GNER written evidence

90 Railfreight Group written evidence

91 First ScotRail written evidence

92 OR Col. 3464

93 OR Col. 3676

94 OR Col. 3474

95 OR Col. 3672

96 OR Col. 3538

97 OR Col. 3678

98 Ibid

99 OR Col. 3678

100 OR Col. 3670

101 OR Col. 3671

102 OR Col. 3736

103 Ibid

104 OR, Written Answers, 2 July 2003; S2W-483

105 OR Col. 3736

106 Highland and Islands Enterprise written evidence

107 HITRANS written evidence

108 OR Col. 3466

109 OR Col. 3466

110 DfT website

111 OR Col. 3636

112 OR Col. 3408

113 OR Col. 3733