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ANNEXE B:  ORAL EVIDENCE AND ASSOCIATED WRITTEN EVIDENCE

28 February (6th Meeting, Session 2 (2006)) Official Report

28 February (6th Meeting, 2006 (Session 2)) – Written Evidence

SUBMISSION FROM CBI SCOTLAND

CBI Scotland welcomes the opportunity to assist this inquiry by the Local Government and Transport Committee.

Freight transport policy is important to the economy of Scotland and this inquiry represents an opportunity to assess the benefits of all modes of freight transport in that context.  The Scottish Executive must take a balanced view when it assesses the different modes of freight transport.  Issues of cost to business, practicality of mode and reliability must be afforded adequate consideration.  

CBI Scotland represents a broad spectrum of business in Scotland, the majority of whom are affected by the Scottish Executive’s policy decisions on freight transport, whether they are freight transport providers or users.  The Scottish business community is relying on the Executive to take decisions with regard to freight policy that will help in achieving the Scottish Executive’s primary stated objective – economic growth.  The road haulage industry provides an essential service to the Scottish business community and is a key factor in supporting the growth of the economy.

The future prospects for the Scottish road haulage industry and the impact of changes affecting the road haulage industry on the Scottish economy

In recent years, there has been a tendency of government at both EU and UK levels to influence a modal change of freight transport away from road.  Environmental objectives largely lie behind this.  Business accepts that protecting the environment and tackling climate change are important policy objectives for the Scottish Executive.  However, the Scottish Executive must realise that it is very difficult to move significantly away from road transportation.  Road will be the dominant mode of freight transport for the foreseeable future.  Even if freight is transported by rail, water or air, it usually involves road transportation at the beginning and end in order to complete each journey.

The road haulage industry in Scotland is facing many challenges.  Scotland’s historically low levels of economic growth places an immediate constraint on the industry.  It is hard to grow your business if your market is not growing,

Customers, particularly but not exclusively in manufacturing, are demanding greater efficiency, reliability and responsiveness from hauliers.  This is a natural consequence of increasingly fierce global and national competition.  The hauliers customers have no option but to take this approach with all of their suppliers/supply chain partners.  Increasingly, their own survival in the global market depends on their ability to reduce their costs and improve their efficiency.  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.  

Nor is there any doubt that the Scottish road haulage industry is capable of rising to the challenge.  On a level playing field, they can compete with anyone and provide Scottish industry with a quality, value-add service. 

What they currently lack at this time is a level playing field in terms of government-imposed costs:

  • High fuel duty means that UK diesel fuel is the highest in Europe;
  • The impact of The Road Transport (Working Time) Regulation is particularly marked in Scotland because many Scottish-produced goods have to travel further to get to market;
  • There has been a significant rise in the overall tax burden placed on business in recent years;
  • The growing burden of red tape and regulation has added considerable cost to business, and eroded many of the competitive advantages that the UK (and, therefore, Scotland) has traditionally enjoyed over the rest of the EU.  This is most marked in the area of labour market flexibility.

Faced with rising costs, hauliers will seek to raise their prices.  They will not always be able to do so, and their own profit margins will be squeezed as a consequence, impacting on investment and training.  Where they can push through higher prices it is their customers, who may themselves be working on small profit margins, who may have their competitiveness undermined. 

We recognise that the Scottish Executive has no direct powers to intervene in many of these areas but it needs to act to address these burdens where it can (where it balances environmental and economic interests when it implements EU environmental legislation), and it needs to influence UK Government policy as much as possible. 

The Scottish Executive also needs to work more closely with the road haulage industry to provide effective and targeted support and assistance.  There are already some good examples.  CBI Scotland welcomes the commitment that the Scottish Executive has already made in addressing key problems within the road haulage industry such as the recruitment and retention of LGV drivers.  The Scottish Road Haulage Modernisation Fund demonstrates recognition of the key role that Scottish road haulage industry plays in developing the economy.  This fund is central to improved environmental and fuel efficient operations within the industry and the following initiatives must be commended:

  • Safe and Fuel Efficient Driving (SAFED) ‘in-cab’ Training Scheme;
  • Retrofitting of vehicle emission reduction technology.

More of this type of support and partnership working is required to alleviate concerns about the long-term prospects for the road haulage industry in Scotland.  There are potentially worrying implications for Scotland’s economy arising from a major decline in our ‘local’ road haulage industry.  It would not be in Scotland’s interests to be overly reliant on EU registered firms to support our industrial base.  Potentially there will be less competition, which could drive up prices and undermine manufacturing cost-competitiveness.  Continuity of supply and speed of response could be adversely affected, which again could undermine prospects for Scottish businesses, particularly manufacturers, who are trying to ‘re-engineer’ their operations to make them more efficient and competitive.  It is important, therefore, that Scotland preserves an indigenous haulage industry.  It is the industry itself that will have the main responsibility for achieving this, but the Scottish Executive can and must support it.

The present and potential contribution of all modes of freight transport, including road, rail, water and air, including the environmental impact

There are two factors that dominate businesses’ decision on which mode of transport to move freight – cost and practicality.  Before considering the present and potential contributions of individual modes of transport, the Executive must understand that these factors are the key motivators behind decisions on modal choice of freight transportation.

Road haulage offers flexibility to businesses that other forms of transport cannot.  Haulage operators can triangulate their activities, meaning there is less movement of empty containers.  As has been mentioned, road freight transport is vital in supporting Scotland’s economy.  There must be increased investment in Scotland’s road infrastructure to assist haulage firms in playing this support role to businesses.  Increased investment will also positively influence congestion – currently one of road haulage’s biggest challenges.

If there is to be increased use of the rail network in Scotland to transport freight, a choice that has undoubted benefits for the environment and assists in reducing road congestion, it should be encouraged for longer distance journeys.  Freight transport by rail is expensive to businesses and shorter journeys are more practical be road.  We are supportive of Network Rail’s Route Utilisation Strategy (RUS) in Scotland and hope that it will achieve its aim of more effective use of the network in Scotland – an outcome that should also improve the efficiency of the current service for businesses.

Both water and airfreight transportation are, similarly to rail, expensive.  There is potential for increased use of these modes over longer distances, but they must be co-ordinated with road freight transportation as it is rare for these modes to offer the complete journey for freight from the origin to destination.  Also, when considering freight transportation by water, the area of flow of the freight often makes this mode impractical. 

There is undoubtedly scope for all of the mentioned modes of transport to offer freight services.  It is important that there is an effective infrastructure that assists in co-ordinating all modes, as many journeys are dependant on more than one mode from start to finish. 

The Scottish Executive’s targets in encouraging the transfer of freight from road to rail and water

Businesses in Scotland do not dispute the environmental benefits of transferring freight from road to rail and water but believe that prerequisites of such modal transfers are:

  • That journeys concerned are over longer distances that will justify the higher costs of these modes of transport to businesses and will demonstrate significant environmental and road congestion benefits.  These types of journeys commonly involve the transportation of aggregates and coal.  
  • That the mode utilised is the one that is most practical.  For freight transport to be moved from road to rail or water, the freight corridor must be two-way and encompass the start and finish of the journey for the transported goods.

We welcome the priority that the Executive is showing in enabling the carriage of freight by rail, which contrasts favourably with England.  However, it is important that the Executive does not ignore the critical role that Scotland’s road haulage industry provides in moving raw materials to manufacturers and goods to market.  Over 70% of Scottish firms sell more than half of their goods/services in Scotland.  This is a higher percentage than anywhere else in the UK.  While the figure for manufacturing goods is probably lower, it nonetheless clearly indicates the high proportion of goods/product movement in Scotland that requires a relatively short journey and that can only be economically transported by road.  This highlights the importance of the road haulage industry to Scotland.

SUBMISSION FROM DIAGEO

Diageo is grateful for the opportunity to share its views of freight transport in Scotland.

Diageo is the industry’s and the country’s leading producer of alcoholic beverages, operating 50 sites including maltings, distilleries, bonded warehouses and packaging plants across the country.  In terms of the movement of goods, the operation involves the supply of raw materials; transport between sites as part of the conversion process; delivery of packaging materials; and then onward distribution of cased goods into the supply chain.

Overall, we produce over 50 million cases of spirits per year.  Around 85% of this total is exported from Scotland to over 180 different markets.

Our manufacturing operation involves:

The delivery of around 460,000 tonnes of cereals comprised of barley and wheat – 90% of which comes from farmers in Scotland and therefore involves local journeys from farm to store and from store to maltings.

Following processing, malted barley is then supplied, again by local transport, to our distilleries.  As well as producing spirit, the distillation process also creates over 200,000 tonnes of animal feeds per year from the ‘spent grains’.  These are recovered and sold to farmers locally as wet feeds, with about 70,000 tonnes dried and further processed for distribution by road across Scotland.  Around 10,000 tonnes is exported from Speyside by boat to mainland Europe.

The spirit created at our malt and grain distilleries is, in the main, transported by tanker or in casks by lorries to maturation warehouses in the central belt and from warehouses to packaging plants.  These movements amount to around 16,000 road shipments per year.

In addition to Scotch whisky, our operations in Scotland also produce gin and vodka and a range of other white spirits.  These are produced at Cameronbridge Distillery and bottled at the nearby packaging plant at Leven.  This development alone has led to 2,000 tanker shipments per year.

More recently, we have taken over the maturation, blending and bottling of certain rums and other spirits.  This involves the import of spirit from the Caribbean and South America which is then transported by road to warehouses near Stirling and then, following maturation, by road to Leven for packaging.

Overall, the delivery of dry goods (cartons, labels, cases, capsules, glass etc) to our packaging plants and the subsequent shipment of cased goods to railheads or ports add a further 70,000 road movements per year.  Our packaging plants feature the fastest bottling lines in the industry and this means operating with just-in-time production – with the consequent pressures that puts on our hauliers.  

A proportion of mature spirit is exported in bulk spirit tankers (around 500 a year) for packaging in-market.  The majority of the spirit we produce, however, is as finished cased goods for export – each year this amounts to around 25,000 export containers.  These are taken by road transport to Grangemouth for shipping to ports such as Rotterdam for onward deep-sea shipment to global markets.  There are also around 7,000 rail movements of containers from the rail terminal at Grangemouth to a warehouse complex in the Midlands.

All our freight transport requirements are contracted out to a small number of logistics companies.  If any erosion of their competitive position should be transmitted through as rising costs to us, it reduces our global competitiveness with Scotland ‘becoming an expensive place to do business’.

Freight transport and the efficient distribution of goods are crucial to the economy of Scotland and our business in terms of raw materials in and goods out for export.  As the cost pressures increase there is real concern about the sustainability of the haulage industry for the future.

Current issues include:

  • Upward pressure on costs as a result of the Working Time Directive – reducing the driver hours available.
  • National shortage of appropriately-qualified HGV drivers in the UK - particularly those qualified for the transport of dangerous goods such as bulk spirit.  Costs increasing as hauliers have to pay a premium for quality labour.
  • Continued congestion on the road network particularly in central Scotland adds to journey times and therefore costs.  Proposals for road pricing would not necessarily solve the problem as tolls would place an additional burden on business.
  • Increased costs of fuel and the burden of duty in the UK is higher than parts of mainland Europe – Scottish firms being undercut by international freight entrants who can take advantage of lower labour rates and lower fuel costs.
  • Rail requires significant investment to ensure there are strategic freight interchanges between road and rail.  We actively pursue rail options where commercially viable.  Our rail shipments from Leven via Grangemouth to the south of England have increased by 10 per cent in the last year.  We are also trialling the movement of containers by rail from our packaging plants in the west of Scotland to Grangemouth port thus helping to alleviate congestion on the Kingston Bridge.
  • Lack of deep sea access from Scotland.  Dependency on the feeder operation to ports such Rotterdam continues to disadvantage Scotland over manufacturers on mainland Europe.  The proposed development of Hunterston would have secured significant lead time and cost advantages.
  • Developments in emerging markets such as China have introduced a new dynamic in the global shipping market.  Exports from China have attracted vessel capacity to service the Pacific.  Consequently, costs for the Europe to America routes (one of the industry’s biggest export markets) have increased.

SUBMISSION FROM FRIENDS OF THE EARTH SCOTLAND

Friends of the Earth Scotland thanks the Committee for the invitation to give oral evidence.  We hope the following aide memoire will be helpful to Committee Members in identifying topics of mutual concern and interest for the hearing.

Freight and the economy

Scotland’s economy, somewhat unsurprisingly, is becoming less freight-intensive.  This trend can be expected to continue if the Executive and Scottish Enterprise are successful in the aspirations set out in Smart, Successful Scotland and the Green Jobs Strategy.  This implies that general investment or activity to support the freight transport industry would not be in Scotland’s economic interests.  Friends of the Earth Scotland believes that interventions in this should be motivated principally by environmental and social objectives.

Theoretical analysis of the role of transport, and the effect of transport improvements in a relatively peripheral economy back up this conclusion.  Improving transport links risks further undermining peripheral economies by exposing them to more efficient centralised competition.

The environmental impacts of freight

Road and air-freight make important contributions to Scotland’s emissions of climate changing gases, especially in comparison to the alternatives (rail and shipping).  Road-freight currently dominates freight transport and Friends of the Earth Scotland submits that the single highest priority in this sector should be reducing emissions through a combination of modal shift, more efficient vehicles and support for economic localisation.

Air freight is relatively small in volume, but the most damaging freight mode per tonne kilometre, and rapidly growing (approx 10% per year since 1990).  Support from the Scottish Parliament and Executive for measures to bring air freight within the emissions trading scheme, and to impose appropriate fuel duties would be welcome.  Local measures to constrain growth, rather than enable it, should also be pursued.

Demand management

In other words, ‘predict and provide’ is no longer appropriate as a public policy response to demand for increased freight transport.  As with other sectors where the environmental or social impact of continued growth is unacceptable, measures for demand management must be introduced.  Friends of the Earth Scotland therefore supports measures to ensure all road and air traffic pays its full external costs (thus reducing demand).  Decisions on the most appropriate tool (national road-user charging or fuel duties) rest elsewhere.

Within Scotland there is a strong case to pursue traffic reduction (for both freight and passenger journeys) through land-use planning, and we would urge the Committee to examine whether the current Planning Bill creates the best framework for such measures.  Such measures can be effectively supported through Scottish Enterprise and other support for sustainable local economic development such as public procurement.

Alternative modes

There are targeted opportunities to stimulate further modal shift, especially to rail but also to water.  We would particularly urge the Committee to support investment in upgrading substantial sections of the Scottish rail network to take new large containers (the so-called W10 grade).  Currently only the West Coast Main Line meets this standard: connections to this standard are merited through to Inverness, Aberdeen and the eastern central belt.

In addition we would target two further areas for upgrading – both to take larger containers, but also to provide dual tracks and/or improved railhead facilities.  Both would be environmentally preferable to planned road capacity increases.  One is the Glasgow and South West Route which is currently operating at capacity, and is a bottleneck especially when maintenance closes the West Coast Main Line.  This route and its connecting spurs have significant potential to remove freight from the roads in South-West Scotland and Glasgow.  The second is ensuring provision of a north of Aberdeen rail-head to replace the Aberdeen Guild Street freight terminal.  This could provide a suitable road-rail interchange for heavy goods from the north-east, including paper, whisky and fish, taking heavy traffic off the roads through Aberdeen.

Targeted investments such as these would likely increase the positive returns from investment in Freight Facilities Grants and Track Access Grants which should be continued and expanded.

supplementary evidence from transform scotland

Stirling-Alloa-Kincardine rail line

As I indicated in my oral evidence, an immediate priority is for the successful delivery of the reopening of rail services to Kincardine from Stirling, a project to which the Scottish Executive is already committed.  This project not only provides more direct rail access for coal traffic to Longannet power station plus the opportunity to develop intermodal rail services to and through Fife, but will also free up rail capacity on the Forth Bridge, which could be used for increased passenger rail services.  There may also be opportunities for new freight sidings on this route, to serve whisky and other industries directly.

Container and coal traffic from Hunterston

If Hunterston is to be developed as a deep-sea container port, we would want as much as possible, if not all, of the freight from there going by rail.  In order to facilitate this, we consider that the next main project should be to enhance/improve capacity for coal and container traffic on Ayrshire routes, in particular the Ayr-Mauchline-Dumfries-Carlisle line.

Glasgow-Kilmarnock-Dumfries-Carlisle line as a diversionary route for WCML

The West Coast Main Line (WCML) is currently the only W10 cleared route to Scotland.  We consider that it would be highly desirable to have a diversionary route for the West Coast Main Line capable of taking 9’ 6” containers on standard platform wagons.  This would entail upgrading of loading gauge clearances on the Glasgow-Kilmarnock-Dumfries-Carlisle line, plus lengthening the existing loop at Lugton and ensuring that the proposed loop at Dunlop (part of a proposed passenger scheme) is long enough to take freight trains.

It should be noted that there are potential synergies between freight capacity/capability improvements (for both Hunterston and WCML diversionary objectives) and enhanced rail passenger services between Glasgow, Kilmarnock, Dumfries and Carlisle.  It is vital that a strategic approach be taken to the development of this route (and the associated economic and environmental benefits) through the Transport Scotland agency.

W10 clearance for Mossend-Perth-Dundee-Aberdeen-Inverness and Mossend-Inverness via Highland Main Line

As a longer-term priority, we would like to see W10 clearance provided on these routes (with their long rail-suited hauls to key markets), allowing for the use of 9’ 6” containers on standard platform wagons.  The current clearance scheme for Mossend-Aberdeen-Elgin requires the use of low platform wagons, which we understand increases operational costs by about one third.

Loading gauge clearance could also act as a catalyst for the development of an intermodal railhead at Dundee, which is one of the largest British cities with no rail freight facilities.

A dedicated Anglo-Scottish rail freight corridor?

There is growing discussion about the possibility of a new high-speed passenger rail line from Scotland to London, but the implications for rail freight have received little attention.  A possible alternative to a dedicated passenger line would be to divert much existing rail freight traffic from the East and West Coast Main Lines on to an enhanced Anglo-Scottish rail freight corridor, managed as a single freight-prioritised route, using upgraded existing secondary and cross-country routes (such as Glasgow-Kilmarnock-Carlisle and Carlisle-Settle-Leeds) and a limited number of new chords.  This would help to free up capacity on the ECML and WCML for higher speed passenger services.  We believe this option should receive detailed scrutiny as a potentially more cost-effective and energy-efficient alternative to an entirely new high-speed line.

Estimates of scheme costs/estimates of modal shift

We have no information on what these schemes would cost, nor can we estimate the likely extent of modal shift from road to rail as a result of these interventions.

7 March (7th Meeting, Session 2 (2006)) Official Report

7 March (7th Meeting, 2006 (Session 2)) – Written Evidence

SUBMISSION FROM FREIGHT TRANSPORT ASSOCIATION

The Freight Transport Association (FTA) represents the interests of providers and users of transport in the UK.  FTA has some 12,000 members (1500 in Scotland) the majority of whom are involved in road transport either as own account operators or logistics providers.  FTA members operate some 200,000 large goods vehicles, about half the UK fleet.  FTA is, however, a multimodal organisation.  90% of rail freight and 75% of visible exports are consigned by FTA member companies.

Freight Transport in Scotland

The movement of freight by whatever means is not an end in itself but is done in response to a demand for goods to be delivered from source to factory or Regional Distribution Centre to supermarket.  The final link in the supply chain as it is called is often by private car or, increasingly by small goods vehicle as the final link in home shopping by internet.

Most goods loaded on vehicles in Scotland stay within Scotland.  Of all goods moving by road in Scotland 9% will leave the country and 11% will be imported from other places, mainly England.  However this, itself, shows one of the problems affecting the logistics industry: there is a net inflow of 3.25 million tonnes of goods by road.  This is the equivalent of some 130,000 fully laden vehicles coming into Scotland with nothing to take back. 

Scotland is on the periphery of the periphery in relation to Europe.  This peripherality and the poor state of the roads infrastructure in particular make it more difficult for businesses to compete against opposition who are nearer the market.  Most commodities travel by road for at least part, if not all of their journey.  The road network forms the arteries and veins that the lifeblood of the economy flows through.  That lifeblood is the contents of the goods vehicles using the roads.  If arteries in the human body become blocked heart trouble ensues unless remedial action is taken.  The same principle applies to roads.  The roads infrastructure, whilst years of underfunding are now being addressed, is not up to the standard that a modern economy needs and should expect.  The central Scotland motorway network is still not complete and roads to the more remote areas of the country are, for the most part, single carriageway and in need of massive investment if the economy is to grow.  This, coupled with the fact that the speed limit for Large Goods Vehicles (those over 7.5 tonnes maximum allowable weight) is 40mph for single carriageway roads makes life for the operator and driver in Scotland very difficult.  In this day and age, given the advance in vehicle technology a 40 mph limit on open roads is a complete anachronism.  FTA would like to see a limit of 50mph on good quality single carriageway roads and would have no problem with this being strictly enforced rather that the current situation whereby the police will, anecdotally, turn a blind eye to a goods vehicle not going much more than 50mph.  VOSA, the Vehicle and Operators Enforcement agency, does not take the same attitude. 

The Committee will, in all likelihood, not need reminded of the roads concerned but for the record they are: A75, A7, A77, A82, A95, A96 and A9.  This is not an exhaustive list of roads that need upgraded and would benefit from increased speed limits but are those identified as being most important for the economy.

Modes Other than Road for the Movement of Freight

The vast majority of freight moves by road and will continue to do so for the foreseeable future.  This is partly because of the convenience and flexibility of the road freight sector but is also because most journeys are of short distance and other modes are less suited to that sort of movement than road.  Having said that, there is obviously scope for the transfer of traffic from road to other modes in some circumstances.  The Executive continues to award freight facilities grants and water-borne freight grants where it can be shown that there would be a reduction in lorry miles on sensitive roads.  A prime example of good use of grant funding is the removal of lorries carrying timber from Argyll to Ayr by road and transferring the trade to sea out of Campbeltown.  Other instances may not be so spectacular but are to be welcomed.  Transfer of freight from road to rail has also been achieved through the application of Freight Facilities Grants but there can be problems with the conflicting requirements of freight and passenger trains wishing to use the same rail infrastructure.  Pressure to encourage more people to use rail for travel rather than car and encouragement to spread the demand for rail transport over the day could cause further problems.  The potential for modal shift to inland waterway is not great particularly with regard to the Forth and Clyde/Union canal.  There may be some potential for freight on the Caledonian Canal.  Transfer to other modes, however, cannot and will not be a replacement for the provision of improved roads infrastructure.

The amount of freight moved to and from Scotland by air is almost negligible in absolute terms at about 77,500 tonnes per annum but the commodities shifted are high value and need to be moved quickly and efficiently. 

Industry Image

The logistics industry suffers, unfairly, from a poor public image.  Everybody likes freight.  People expect to be able to visit a supermarket and find fresh produce from all over the world on the shelves.  People expect that their refuse and recycling materials will be collected and will complain bitterly if the Council refuse vehicle doesn’t turn up.  Within the next few weeks, if they have not already done it people will expect to be able to buy a Christmas tree and all the presents to go under it.  People love freight.  The problem is that people generally do not connect the goods in the supermarket etc with the vehicles they see on the roads.  They like to have the freight when they want it, they just don’t want to see it being moved.  Diesel engined goods vehicles were once renowned as dirty, smelly things with black smoke coming out of the exhaust that blocked out the light and suffocated anybody near at hand.  Unfortunately this is still the image that many members of the public hold.  The myth continues, but anybody comparing the facts would have to agree that there has been a massive reduction in emissions from diesel engined vehicles today compared with only a few years ago.  Tighter and tighter technical standards for emissions from diesel engines have done away with black smoke.  Euro 0 standard engines, introduced in 1990, reduced the black smoke to a grey haze.  By 2008 when Euro 5 engines are introduced emissions of hydrocarbons, carbon monoxide, nitrogen oxides and particulates will have been reduced by between 86% and 96% of what was judged to be a tight standard in 1990 when it was introduced.  It is unlikely that there will be a real alternative to the use of diesel for a long time into the future.  Experiments have been tried with LPG and Liquefied Natural Gas but have not been the hoped for success.  The addition of Bio Diesel to mineral diesel may help but can only be used in limited ratios.  Other fuels such as hydrogen and fuel cells may achieve niche markets but for the foreseeable future the vast majority of goods will be delivered by vehicles running on diesel.

Conclusion

We have not touched on such subjects as the current high cost of fuel and the high tax rate applied to it.  This is partially because the tax on diesel is a reserved matter and the current high cost of the raw material is a factor of world market prices and it is unlikely that even the UK Chancellor can do much about that.  These are things, together with competition from foreign operators, that the industry in the UK as a whole suffers from.  However the remoteness from market, the imbalance of trade, the lack of dual carriageway roads and the lower speed limits applied on them are problems affecting the industry in Scotland more than other parts of the UK. 

SUBMISSION FROM ROAD HAULAGE ASSOCIATION

The Road Haulage Association (RHA) is the primary trade association representing the interests of the hire-or-reward sector of the Scottish road freight transport industry.

The Association comprises 10,000 member companies with operating centres across the United Kingdom with approximately 1,000 in Scotland.  Members range from single vehicle owner-drivers right through to multi-national fleet operators.  

As well as lobbying government bodies and the authorities on behalf of the membership, a major part of the association’s remit is to ensure that the road freight sector has the knowledge and ability to operate in a safe, legal, efficient and environmentally aware manner.

The Scottish road freight transport sector has always been highly competitive and accounts for approximately 10% of the UK Operators licence holders with similar bandings, for example, 54% operate one vehicle, 94% operate less than ten vehicles.  Furthermore, profit margins within the sector are usually only between 2% to 3%.  However, even this level of profitability is being eroded due to many factors that are outside the control of the individual operators.

Fuel Costs 

The road freight sector is obviously affected by any fluctuation in the price of fuel, as this commodity makes up around one-third of overall operating costs for a typical operator.  Over the last two years the purchase price of road fuel across Europe has increased dramatically.  In fact, since January 2005 the cost of fuel purchased within Scotland has risen by 20%.  It is acknowledged that this concerted increase has had a detrimental effect on trade right across the globe and not just in this country.

However, every road freight haulier based within Scotland has been additionally affected because of the long term government policy regarding the tax levels set in Westminster.  Within the UK every litre of Ultra Low Sulphur Diesel (ULSD), which is the standard type of fuel used by the majority of commercial goods vehicle operators based in Scotland, has a 47.10 pence fuel duty levy added on to the purchase price, plus a further 17.5% Value Added Tax imposed (which for most hauliers can be claimed back).  Therefore, every purchaser of fuel from within Scotland is paying at least 60% in tax to the UK Treasury.

The high level of fuel duty imposed by the UK government, compared with every other European member state, is a major component in the present uncompetitive state of all Scottish goods vehicle operators.  

Foreign registered vehicles, which include those operating from Southern Ireland, can quite legally come into Scotland with 1500 litres of fuel purchased outside of the UK, at a purchase price at least £300.00GBP lower than is available here.  This then gives the foreign registered truck a competitive advantage over the domestic haulier, which is undoubtedly having a detrimental effect on the Scottish economy and therefore the long-term employment prospects for those involved in this industry, both directly and indirectly.

Appendix ‘A’ – Weekly fuel costs UK

The industry concern about this was such that the RHA in conjunction with the Freight Transport Association commissioned an independent study into the effects of high fuel duty levels and foreign competition on the UK.  The report of this study was published in November and is available to the Committee.  But in summary, the findings demonstrate very real evidence of the devastating effect this unfair competition is having.

Appendix ‘B’ – Burns Report which can be found here:

Road Haulage Association Submission

CASH FLOW:

Many factors impinge on the hauliers’ Cash Flow:

The decision of almost all fuel companies and distributors to request payment every two weeks or, in some cases, for the haulier to lodge a sum of money with the Fuel Company and then be permitted only to draw fuel to that value.

Drivers’ wages are normally paid weekly so between fuel and wages, well in excess of 50% and in some cases in excess of 60% of costs are paid out far in advance of any money due.

The debtor days has grown and unfortunately in some cases as far away as 60 – 90 days before being paid for work, considering fuel is paid for after two weeks and most drivers are paid weekly!

The government also impacts on the cash flow, MOT tests have to be booked and paid for 30 days in advance.

Legislation:

The Working Time Directive

The Road Transport (WTD) Regulations, covering mobile workers, came into force on 4th April 2005.  These regulations have had a major impact on the road freight sector and have forced this industry to revise completely its operational procedures and employees’ contractual agreements.

The legislation has imposed a 48-hour average working week on mobile workers, without the opportunity - afforded to every other sector of industry - to “opt-out”.

Drivers, already covered by Drivers’ Hours and Tachograph Regulations which govern their working limits and ensure that daily and weekly rest-periods are observed, are either confused as to why they are requested to complete a further round of unnecessary paper-work or concerned that their employer has some reason for reducing their working time and therefore reducing their earning capacity!

The number of Scottish hauliers who would have proudly defined themselves as “international” has reduced dramatically:

The number of EU member states not implementing the working time directive for Road Transport has made it totally impossible to compete on any form of work/driving related journey.  Coupled with their cheaper fuel on the continent, the lack of exports from Scotland and finally the withdrawal by Superfast of their daily sailing schedule to three times a week has disturbing affects on an industry sector already in crisis.

Timber-Hauliers are experiencing great difficulty, the driver has to load the timber in the forest and unload the timber, he has a specialised vehicle with a crane mounted on the vehicle.  The WTD is not allowing any flexibility for these employers/drivers and thus earnings of both employers and drivers are being reduced.  Timber is a high volume low cost product, over 89% of timber used in Scotland is imported because it is cheaper, why?

Livestock hauliers devastated and demoralised from BSE and Foot and Mouth are now thin on the ground.  WTD is having an impact on them as will be the new EU Regulations due to come into effect on 1 January 2007 – almost one year away – plenty of time – no there is not!  All Livestock Drivers must have a “Certificate of Professional Competence” for driving a livestock vehicle and they must have it in their hand on 1 January 2007 – who is going to pay for this new certification?  What will cost?  Will the Livestock haulier get a rate increase because he has this certificate?  If he does not have this new certificate he will not work after 1 January 2007!

In an industry already experiencing a shortage of skilled workers it has been estimated that the WTD legislation alone will increase the existing driver shortage by a further 50,000 per annum.

The cost of implementing the Road Transport (WTD) Regulations in the UK has been assessed, by Government, to cost industry over £1 billion.

The European Vocational Training Directive (Driver CPC)

An additional concern to this industry is the next European initiative to be imposed on the sector; the Vocational Training Directive.  This new European Union legislation will require vocational/professional drivers of lorries of all sizes to hold a Certificate of Professional Competence (CPC), as well as holding a driving licence with the appropriate category obtained.  This qualification, once obtained, will need to be renewed on a five-yearly basis.  Whilst the road haulage industry is supportive of any practice and/or procedure that is proven to substantially improve safety on the roads, it cannot be expected to keep absorbing the costs of a continuous stream of unproven initiatives from Brussels.   

Appendix ‘C’ - Summary RHA Members briefing paper which can be viewed here:

Road Haulage Association Submission

Infrastructure

Operating from within Scotland immediately puts an operator at a disadvantage compared with his competitors based in the rest of UK.

The state of the roads in the north of Scotland have been described by members as being economically destabilising and contributing greatly to their cost increases in terms of  both time and money.

Congestion is a further problem facing the UK logistics industry.  It is estimated that by 2024 road traffic will have grown by between 45% and 55%, based on existing government forecasts of traffic growth.

Since 1997 there has been a 7% increase in the amount of road traffic using the UK road networks, whilst investment in road infrastructure has reduced by 24%.

In towns across Scotland delivery curfews, access restrictions and parking/delivery restrictions make urban deliveries increasingly difficult and costly, whilst at the same time clients request more stringent timed delivery windows to be met.

Enforcement

Higher levels of effective enforcement would be a benefit to the road haulage sector, as well as contributing towards safer roads across the country.  The Scottish road transport sector is under particular strain in respect of the environmental burden, as it lies at the intersection of sometimes conflicting interests between the commercial and competitiveness requirements of road freight movements and issues such as public health, traffic congestion and climate change.  As a result, it is essential that the legitimate, and highly regulated, commercial road transport sector does not have to compete with operators who are not adhering to all the regulations and operate at an unfair commercial advantage.

Conclusion

The haulage industry in Scotland is at a very serious competitive disadvantage compared with its European counterparts.  Furthermore, this situation has been brought about by a combination of all the factors and issues mentioned above, none of which can be addressed by the operators themselves. 

The recently published findings of the Burns Freight Taxes Inquiry have shown that that HGV operating costs have been rising at above the level of inflation for many years.  Their findings show that since 1995 vehicle-operating costs have risen by 43% (for a 38 tonne gross vehicle weight articulated vehicle) whilst inflation for the same period was 31%.  This makes it difficult for operators to gain rate increases from customers, who have seen prices fall as a result of Sterling’s strength against the US Dollar and the Euro, combined with a relatively stagnant Euro economy.  Many Scottish businesses will not or cannot pay all the increases Scottish hauliers need to sustain their businesses because they too need to remain competitive.  During this same period UK domestic rates have only increased by 22%.

It is therefore essential that those in authority address the present situation as soon as possible, or Scotland will see yet another sector of industry die and be replaced by foreign based operators, who are largely unregulated when plying their trade within these shores.  Not only will the economy be adversely affected, but safety will be compromised and the long term effect will undoubtedly be bleak.

There is not enough space in four pages to do justice to the concerns of hauliers and other issues such as, Illegal use of fast agricultural vehicles, the role of rail freight, proposed relaxation of state aid rules for the haulage industry to mention but a few will hopefully be fully covered by this inquiry.

SUBMISSION FROM EWS

EWS is Britain’s largest rail freight operator, providing over 1,000 services a day and hauling an average of 100 million tonnes of freight per annum.

EWS is pleased to provide the Local Government and Transport Committee with the following comments for their inquiry into freight transport. 

This inquiry is being conducted under the on-going development of the Transport Agency for Scotland and the current consultation for the Scottish Executive’s rail freight strategy.

Future prospects for the Scottish road haulage industry and the impact of changes affecting the industry on the Scottish economy

For the movement of goods, an efficient and successful road haulage industry is important.  However, road haulage is one of a number of transportation modes that can be used for the delivery of goods, which can also involve rail, water and air.  EWS fully agrees with the view of the Scottish Executive that good transport links are important for growing Scotland’s economy.

However, the movement of freight is subject to local, national, European and international pressures which affect costs and working practices.  Some pressures are directives from Europe, such as the Working Time Directive, while others are part of the global economy, such as the rise in fuel prices.

The costs faced by the road haulage industry are also costs which have been faced by the rail freight industry.  The road haulage industry accepts its role as a majority provider of freight services, but should also recognise that it needs to adapt to meet changes in society, which are more aligned with reducing congestion, improving efficiency and reducing the harmful effect of pollution in the atmosphere to offset climate change.  Customers want their goods delivered at a lower cost, often working to a just in time framework.

Road hauliers facing increasing costs do have an escape route.  Rail provides a high-speed bypass that allows the road haulier to retain its customer, with the goods delivered, in part, by rail to reduce costs.  Road and rail freight operators need to work together to assist each other.  It is not a case of road versus rail as road hauliers increasingly see rail as a viable solution to increasing road costs.  Rail and water transportation cannot provide all the solutions for the road haulage industry, but they are providing an important option for road hauliers who see the need to diversify their transport requirements.

EWS has developed a number of services for John G Russell.  Russells is a successful Glasgow based road haulier which has recognised that by contracting services from EWS it provides them with a competitive edge over other road hauliers.  Moving goods to and from terminals is handled by Russells, with the long distance trunk operation carried out by EWS.  This enables Russells to retain and win new customers by using road and rail to lower costs and provide a faster service.  There are a number of other road hauliers who are working with EWS on similar transport options.

Large retailers are considering where rail can complement their existing road haulage services.  The trials by Tesco of rail freight services from central Scotland to Inverness earlier this year were a success.  EWS is now working with Tesco on their plans to introduce regular rail freight services to Inverness and Aberdeen from the central belt.

On a wider scale, it is impossible to remove lorries from the equation when you are working to increase rail freight.  EWS wishes to provide its customers with a one-stop shop that will take in rail as well as road.  The company is currently looking to partner with road haulage operators who share this vision, but if operators cannot be found, EWS would be comfortable starting up its own road haulage division.

A greater element of partnering between the modes of road and rail will lower transport costs for business, which is good for the Scottish economy.

60-tonne lorries

The road haulage industry is pressing the Department for Transport to raise the current weight restriction for lorries from 44 tonnes to 60 tonnes.  EWS has a number of concerns over the introduction of heavier lorries, these being:

  • Road damage - both the absolute weight and the repetitive effect of axles carrying a heavy weight will cause damage to the road surface and supporting structures
  • Manoeuvrability - the length of the vehicles will cause intrusion into other road space and non-road space when turning.  This has significant safety implications.
  • Length - the increased time to overtaking a longer vehicle on a single carriageway will increase the risk of collision with traffic travelling in the opposite direction.  On a dual carriageway or motorway it will take longer to overtake a lengthier vehicle thus increasing congestion.
  • Application - EWS understands that the advocates of heavier lorries have stated that they will only be used on motorways.  Given that very few origins or destinations of freight are directly accessible from the motorway we cannot see how this limitation will work.  In practice we would expect heavier lorries to be using unsuitable non motorway routes.

EWS’s specific concerns relate to the impact on rail freight of 60 tonne lorries:

  • Amongst rail freight’s competitive advantages is its ability to carry higher weights than permitted on the road.  Whilst we accept fair modal competition we would object to unfair competition created by a change in Government regulations.
  • A step change in Gross Laden Weight will allow a step change in the ability of road haulage to move heavy products.  The change from 40 to 44 tonne glw lorries allowed certain products, such a steel coil, to be conveyed by road.  Previously a lorry could carry only one steel coil, now they can carry two.  A change from 44 tonnes to 60 tonnes or greater will permit other heavy products to move by road.
  • The additional length of a 60 tonne Gross Laden Weight lorry will allow three twenty-foot ISO containers to be conveyed, rather than two as currently permitted.  As with heavy products, this represents a step-change.  This will significantly weaken rail’s competitive position for the haulage of deep-sea maritime containers.
  • The proposed increase in Gross Laden Weight comes after successive increases that have seen HGVs increase in size and weight in stages in recent years.  If 60 tonne lorries are permitted then the expectation will be for a further increase after a few years, and yet more increases in the future.
  • The combined effect of Government/Scottish Executive inspired support for the road haulage industry will be to deter future investment in rail by end-users and thus to further weaken rail’s overall competitiveness.

If 60 tonne lorries are approved, EWS argues that an increase in lorry weights should be matched by an increase in the maximum permitted axle weight for rail vehicles from the current 25.5 tonnes to the norm in North America of 36 tonnes.  However, officials in the Department for Transport have stated that any incremental costs caused by such a change would have to be borne by rail freight operators.  It is not clear to us whether the incremental costs caused by 60 tonne lorries would be recovered from road hauliers, creating a further imbalance between the two modes.

Present and potential contribution of all modes of transport, including road, rail, water and air, including their environmental impact

Rail freight operates in the private sector.  It receives no general subsidy, but where it does Government support is restricted to demonstrable environmental benefits and represents around 4% of the rail freight industry turnover. 

Rail freight pays the incremental wear and tear costs that it imposes on the rail network, whereas road hauliers do not.  Rail freight activity across Britain has grown by 60% in the last ten years and, depending on the type of traffic being hauled, an average freight train avoids the need for around 50 lorry movements.

Rail freight services currently avoid the need for over 20 million lorry movements per annum.  The operation of rail freight services also improves road safety and reduces costs of the National Health Service, as without these rail freight services the additional volumes of road movements would increase the risk of road accidents.

The National Atmospheric Emissions Inventory database shows that a tonne of freight conveyed by rail generates significantly less emissions than if conveyed by road.  Taking a typical freight train, with a payload of some 1500 tonnes, when compared with the equivalent lorry-loads, the use of rail produces 11% of the carbon monoxide, 17% of the nitrous oxide, 16% of the PM10s, 10% of the volatile organic compounds and 37% of the carbon dioxide.  Rail freight makes a significant contribution to the environment when compared with the alternative of road haulage. 

EWS has been developing a number of plans to increase the length of its freight services in order to deliver more goods to customers per train than before.  This has seen an additional 4.3 million tonnes of additional haulage capacity across Britain being created for the coal industry by running longer trains - avoiding the additional costs of operating additional trains.  In Scotland, trains to Longannet Power Station in Fife have increased in length by 33% to 39 wagons per train.

By continually reviewing its service offering and improving efficiency, such as operating longer trains, EWS is able to make rail freight services more attractive for its customers, whilst also providing society with the benefits of operating these trains.  This makes an important contribution to the economy of Scotland, where downward pressures exist on hauliers to reduce costs.

There are over 600 locomotives used in Britain by rail freight operators.  Whilst some of these were built between 20 and 40 years ago, nearly 70% of the locomotive fleet was built within the last six years, conforming with modern environmental and noise regulations.  The main freight locomotive of choice within Britain, the class 66, has continually been modified and updated since it was first designed, to ensure that its operating efficiency and environmental performance continually improves.

Greater potential exists for road and rail freight operators to work together to complement each others services.  Customers demand lower costs and the road haulage industry’s route to meet these demands is to partner with rail operators.

Scottish Executive’s targets in encouraging the transfer of freight from road to rail and water

At the Scottish Executive’s consultation meeting with the freight industry on 18 August 2005, the Minister for Transport and Telecommunications, Tavish Scott MSP, made two significant remarks.

The first being that the Scottish Executive wished to "ensure significant representation for the delivery of goods" and the second that "freight is now regarded with higher importance within the Scottish Government".  The last statement needs to be backed by action to implement the commitments in the Scottish Executive’s freight strategy.

The freight facilities grant and the track access grant policies provide important funding for Scottish businesses to make the switch from road to rail/water for environmental and economic reasons.  These grants should continue.  The Scottish Executive could do more to promote these grants, whilst also developing policies to further assist businesses to switch to alternative modes of transport. 

There is a need to protect strategic rail freight sites for future rail freight terminals.  Key strategic sites, such as Mossend in central Scotland, Millerhill in Edinburgh and Millburn Yard in Inverness, are crucial in the development of additional rail freight services, particularly as these have good road connections.

With the Scottish Executive becoming responsible for a greater say in the outputs of the rail network in Scotland, EWS wishes to avoid the scenario where train planning and use of capacity on the rail network is directed for the benefit of one passenger rail operator.  The rail network in Scotland is a mixed use railway and does not exist for one franchise holder.  The enthusiasm to deliver for the passenger railway by the Scottish Executive must be matched by a commitment to deliver a railway that meets the needs of a growing rail freight market, such as providing additional capacity on routes such as the Glasgow and South Western. 

It is essential that the Scottish Executive ensures paths are available 24 hours a day for freight services - this is fundamental for meeting their aspirations to grow Scotland’s economy and improve freight transportation.

submission from freightliner

Freightliner is the UK’s largest mover of maritime containers by rail and run over 80 trains each week day conveying approx 32 containers per train.  Freightliner also has one of the five largest road haulage fleets in the UK.

The Freightliner rail network connects 5 key deep sea Ports to 16 inland destinations one of which is Coatbridge Freightliner Terminal.

Coatbridge Terminal is the largest Intermodal rail terminal in Scotland and has capacity to handle around 130,000 containers per annum.  There are daily services to and from Coatbridge to Felixstowe, Southampton, Tilbury, Thamesport and Seaforth.

In 1999 the Terminal throughput was in excess of 113,000 containers however the effects of Hatfield in October 2000 were severe and volumes dropped to a low point.  Volumes are now recovering.

Scotland’s exports connect with the large container vessels at major Ports for transportation to world markets.  The UK ports share of the Northern European market has shrunk from 25% to 20% between 1995 and 2004.  Freightliner provides connections direct to UK Ports rather than supporting continental Ports such as Rotterdam or Antwerp.

SUBMISSION FROM THE MALCOLM GROUP

The Malcolm Group was founded in 1925 when the present Chief Executive’s grandfather started up a coal business in the Brookfield/Johnstone area.

The business now employs over 1,800 people and is split into two divisions – Construction Services and Warehouse and Distribution.  The annual turnover is in excess of £130M.

The Construction Services Division includes, tippers, plant machines, re-cycling facilities and coups.  This division is situated mainly in West/Central Scotland.

The Warehouse and Distribution Division covers the whole of the United Kingdom with 12 sites situated throughout the country and over 3 million square feet of warehousing (including bonded warehousing).

Points for Discussion

  • We as a company have developed our road/rail options over the last 4/5 years and have brought to the sector a totally integrated road and rail option.  We would also complement the Scottish Executive for their support and would encourage grants to be maintained and developed going forward.
  • Fuel costs and duty – this has increased as an overall percentage for our cost base from 31% to 34.6% over the last two years.  This is a massive increase in a cost over which to a great extent we have no control.
  • Our UK customer manufacturing base has struggled to pay the taxes imposed on them – aggregate tax, energy tax, cost of gas etc – and this has resulted in them not paying our increase costs and in fact as is usual the first port of call to reduce their overall costs is road transport.
  • Road congestion – although we run a large percentage of our fleet as double shift, we have seen our productivity reduce by over 20% in the last 4/5 years in doing exactly the same job – i.e. whereas previously we would get 8 loads tipped in a day, now due to congestion, this has reduced to 6 loads, although the travel mileage has not altered.
  • Working Time Directive – being in a reactive service sector and although a current relaxation exists on POA, I do not believe the WTD was thought through in full and the on‑costs currently coming through are not sustainable in a sector already very much restricted by legislation.
  • Speed limits – although we recognise that trucks do get blamed for a majority of damage/accidents, nowadays with the technical and environmental advances made by truck manufacturers, we would encourage a re-visit of speed limits on certain roads.
  • Rail – we would encourage investment on rail infrastructure especially on alternative routes other than the West Coast Main Line.

supplementary EVIDENCE from ews

During the oral evidence session to the Committee by EWS, members raised the issues from First Scotrail and GNER that freight trains cause delays to their passenger services.  This was particularly focused on by First Scotrail who provided a range of performance information to the Committee.

As part of Mike Hogg's oral evidence to the Committee, he explained that the figures supplied by First Scotrail were historical and approximately 30% over stated.  The timetable for coal services operating from Hunterston to Longannet was recast during period 7 of the 2005/06 railway year.  This removed errors in the timetable, such as where a coal train being timetabled to pass a section of track in 12 minutes, where in reality the journey took 15 minutes.

The graph below shows the effect this timetable recast has had on the delays EWS services cause First Scotrail and vice versa First Scotrail on EWS.  The important line to look at is EWS delays on First Scotrail for 2005/06.  This clearly shows the timetabling problems experienced in periods 1 to 6.  With the introduction of the recast timetable in period 7, we are now enjoying significantly lower delays on First Scotrail that the beginning of the 2005/06 year.  First Scotrail delays on EWS are fairly average at 2,000 minutes every four weeks.

More work is being done to further reduce delays.  EWS and First Scotrail are committed to ensuring they continue to reduce the amount of delay they cause to each other.

On a separate issue, William Wishart of Scottish Coal told the Committee during his oral evidence that EWS cancels 25 to 30% of trains from their facilities.  This is an inaccurate statement.

Since the start of this year, the railway (Network Rail and EWS) have been responsible for cancellation of 102 trains planned for Scottish Coal, with the majority of cancellations resulting from train sets being in the wrong place after being delayed due to infrastructure failings.  This cancellation figure is about 10% of the trains planned for Scottish Coal. 

In addition, Scottish Coal themselves have been responsible for the forced cancellation of 84 trains since the start of this year, which is predominately caused by having no product for loading into wagons or infrastructure problems in their terminals that prevent access of trains.  This figure for Scottish Coal cancellations is just below 10% of the total order number of trains planned since the start of this year.

EWS supports the comments made by William Wishart regarding the operation of longer coal services on the rail network.  Currently the Settle and Carlisle route is closed for maintenance and renewal, and EWS is operating one jumbo train a day with 4,000 tonnes of coal hauled by one locomotive on the diversionary Tyne Valley route. 

This is the equivalent of two trains worth of coal in one train path.  EWS is working with Network Rail to make the operation of these longer trains permanent, rather than only permitted when a route is closed.  The permanent introduction of these trains would transform the delivery of freight by rail and increase capacity on the rail network for other passenger and freight services.

EWS Delays

supplementary evidence from first scotrail

In our submission to the Inquiry on 8 December 2005 we presented the position as it then was, and made it clear that we had seen signs of improved performance by EWS coal services.  From late

December 2005 onwards this improvement accelerated and, we are now seeing consistent reductions in the impact of coal services on our trains.  In the most recent 2 periods (period 1 and 2 of the 2006/7 railway year, to 3 June 2006) we averaged 1,960 minutes delays to our services by EWS coal trains, compared to an average of 5,200 minutes a period at the end of period 7 2005/6 (just prior to EWS timetable change).  This is a very significant reduction in delays, as you can see from the attached graph (see below).

EWS Coal Delays to First Scotrail

We agree with EWS’ analysis of the causes of the increase in delays to our services, and the actions that have been taken.  EWS and Network Rail have put considerable effort into addressing these problems, and there has been good cooperation between EWS, Network Rail and First ScotRail.  The results are now speaking for themselves.  There are still issues to be addressed in some areas but we are confident that EWS have actions in hand to deal with these issues.

We should comment on one minor issue raised in EWS’ letter, that our data is approximately 30% overstated.  Our data on delays caused to our trains by EWS came from our own systems, and in our submission we quoted total delays to ourselves by EWS of 90,405 minutes in the year to period 8 2005/6.  We have checked this against data supplied by Network Rail to the industry which gives a total for the same year of 86,694 minutes, so our data is within 5% of Network Rail’s data, hence we can not agree that our data is significantly overstated.  This point of detail does not affect the main issue, which is that EWS recognised a significant problem with delays to passenger trains, and are taking effective action to address this problem.

21 March (9th Meeting, Session 2 (2006)) Official Report

21 March (9th Meeting, 2006 (Session 2)) – Written Evidence

SUBMISSION FROM Office of rail regulation

The Office of Rail Regulation is the independent regulator of the rail industry in Great Britain.  Our key responsibilities are:

  • determining how much revenue Network Rail needs to reflect the efficient cost of outputs required to deliver government’s specification for the railway;
  • monitoring and enforcing delivery of those outputs by Network Rail;
  • licensing railway operators, and overseeing the arrangements for the access to the network, stations and maintenance depots by train operators;
  • enforcing competition law for the rail sector, alongside the Office of Fair Trading;
  • developing a rail industry information network;
  • (from early 2006) enforcing and developing health and safety legislation for the rail industry.

In carrying out these responsibilities, ORR aims to achieve a number of public interest objectives set out in section 4 of the Railways Act 1993.  These include promoting the use and development of the network for freight to the extent we consider economically practicable.  Our policy is to:

  • ensure an appropriate balance between the interests of passenger and freight operators on the network;
  • facilitate improvements in the competitiveness of rail freight against other transport modes;
  • encourage competition in the provision of rail freight services.

ORR consults extensively with the full range of stakeholders on our policies and work programmes.

Devolution

Under the Railways Act 2005, Scottish Ministers have responsibility for specifying and funding rail services in Scotland.  In the light of guidance from Scottish Ministers on what they wish to be achieved by railway activities in Scotland, and the funding they have available, it is for ORR to set Network Rail outputs and funding.  In addition, Scottish Ministers may prepare a strategy for the railway in Scotland, and give general guidance to ORR on public policy issues, for ORR to take into account alongside our other public interest objectives.  Scottish Ministers may give financial assistance to rail services in Scotland, including freight.

Following these changes:

  • ORR will assess Network Rail funding requirements, and set Network Rail outputs, separately for Scotland, as part of the periodic review of Network Rail charges due to take effect in 2009;
  • ORR has begun to report on Network Rail performance in Scotland separately from that in Great Britain as a whole.

The freight market

In recent years we have seen significant growth in rail freight carryings:

  • significant growth in coal movements from the port of Hunterston and from opencast sites in Ayrshire, both within Scotland and to power stations in England;
  • a number of innovative new freight services (such as the partnership between Direct Rail Services and WH Malcolm to move consumer goods, and English Welsh and Scottish Railways’ timber service in the Highlands and services for supermarket companies to the North).

All four main rail freight operators are currently active in Scotland – English Welsh and Scottish Railways, Freightliner, GB Railfreight and Direct Rail Services.

Current key issues for freight

Access charges

Currently access charges paid by freight operators to use Network Rail’s network are based on the incremental costs of freight services on the network.  Freight operators do not contribute to the fixed costs of providing the rail network.  These charges were established in 2001, and we will be reviewing them as part of the periodic review of access charges due to take effect in 2009.

As part of the review we will need to take into account any aspect of the specification from Scottish Ministers which relates to freight, and any financial resources they propose to make available to freight.

Performance

Generally rail performance in Scotland (particularly that of Network Rail) has not improved as much as might have been expected in view of improvement in Great Britain as a whole.  This affects both freight and passenger operation.  We are currently investigating with the industry the cause of this underperformance and what can be done about it.

Freight capacity

The current main freight capacity issue in Scotland is the movement of coal.  Available rail capacity is stretched, particularly on the Glasgow and South Western route (Kilmarnock-Dumfries-Carlisle) for traffic to England but also across the Forth Bridge for traffic to Longannet Power Station in Fife.  The Stirling-Alloa-Kincardine route re-opening will provide some relief to the Forth Bridge but other pinch points will remain.

The issues of freight rail capacity in Scotland are currently being considered by the Scottish Planning Assessment, being prepared for the Scottish Executive and also by two Route Utilisation Strategies (RUSs), being progressed by Network Rail.  The two RUSs are the Scotland RUS (addressing all rail traffic in Scotland) and the Freight Route Utilisation Strategy, covering the whole British network, but which will have a major influence on cross-border routeings.

Environment

ORR has regard to environmental issues and the need to promote sustainable development as part of our statutory duties under section 4 of the Railways Act 1993.  We recognise that rail freight is an environmentally-friendly method of transportation, especially in comparison with road and aviation freight, and encourage rail freight growth, in line with our statutory duties.

submission from rail freight group

The Rail Freight Group is the representative body of the rail freight industry.  Its purpose is to increase the volume of freight carried by rail.

Present contribution of rail freight in Scotland

In the last full year for which statistics are available (2003-2004) rail freight traffic lifted in Scotland was 8.3m.tonnes, (in addition 1.56m. tonnes was delivered to Scotland from other parts of the UK and Europe) this was a decrease on the previous year (9.6m.tonnes lifted) and may be considered as a temporary blip in the steady rise in rail freight tonnage since an all time low of 5.0m tonnes lifted in 1993.  Examination of tonnage trends in 2005 suggest rail freight will reach its highest level since 1979(12.0m.tonnes lifted).

The tonnage of freight moved by rail is occasionally compared with the substantially greater tonnage moved by road (8.3m.tonnes by rail in 2003-2004 compared with 153.4m.tonnes by road)to the detriment of rail, it is important to note that such ‘broad-brush’ comparisons are invalid and misleading as guides to policy development.

In the road freight market in the order of 60-70% of freight movement is traffic for which rail is completely unsuited, could not and would not compete for; e.g. local multiple deliveries, deliveries to and from locations remote from any railhead, very short distance movements etc.  The contestable freight market is not 161.7m.tonnes (road 153.4m.tonnes plus 8.3m.tonnes on rail) but in the order of 54.2m.tonnes-69.5m.tonnes so a 10 or 20% shift of traffic from road to rail is much more achievable in tonnage terms.

Commodities currently carried by rail

The range of commodities currently carried by rail is: coal, container or inter-modal traffic, parcels, chemicals, cement, steel, waste, aviation fuel, oil, timber, new cars and china clay plus a modest amount of general merchandise.

Carryings are dominated by coal which flows from Scottish opencast sites (mainly but not all in Ayrshire) and Clydeport at Hunterston to Scottish power stations (Longannet and Cockenzie) and to English power stations mainly in Yorkshire.

Container traffic moves between Scotland and ports in England, to the West Midlands and the North-West, whilst this forms the bulk of the traffic there are significant movements within Scotland.

Potential contribution of rail in the Freight market

Before going into detail about possible enhancements to the network to increase the potential contribution of rail freight it may be helpful to recall: what is the purpose of freight movement? Characteristics of the rail freight industry and which markets rail will serve in future.

Purpose of Freight movement.

The purpose of freight movement is to move goods reliably and efficiently from where they are produced or imported to where they are wanted for use or export.

The keys to reliability and efficiency include time, price, freedom from damage etc.  Reliability and efficiency are particularly important for Scotland to overcome the disadvantages of peripherality.

Characteristics of the Rail freight industry

Competition

Experience since privatisation indicates competition between Freight Operators is the best way to ensure competitive prices and quality of service to customers.  Network Rail has facilitated the entry of competitors into the market by awarding contracts for infrastructure trains to new entrants, this is something Scottish Ministers should bear in mind given their new powers with regard to rail.

Access to the network

Without access to the network in the form of a train path (i.e. time to depart, times to run and time at destination which meets the customers requirements) rail freight is hampered in its competition with ‘free access’ road, hence the need for even-handedness in dealing with the demand for paths between rail freight and rail passenger business.

Terminals

Rail freight needs terminals to load and discharge traffic, Scotland is not over blessed with rail freight terminals.  Although the Scottish Executive through its Grants regime has helped to improve the situation.  The implementation of EU Open Access Directives in 2006 will also help (terminal operators will not be able to claim exclusive use of a terminal unless it is already working at full capacity) but will require close liaison between the Office of the Rail Regulator, the Scottish Executive and Transport Scotland.

Gauge

It is essential that the main routes in the Scottish network are cleared to allow them to carry the increasingly pre-dominant 9foot 6inch high containers which are rapidly becoming the international norm on conventional wagons.  On some routes it is possible to carry these containers on special wagons but only at additional cost.  Scotland has this clearance on the West Coast Main Line to Coatbridge/Mossend and the Executive has funded clearance on wards from Coatbridge/Mossend to Elgin via Aberdeen for 8foot 6inch containers.  Further work, detailed later, needs to be done to ensure Scottish industry remains fully competitive.

Competition with road

Whilst rail and road compete for traffic particularly in the Anglo-Scottish market there is a clear realisation in both modes that their purpose is to help Scottish industry remain competitive, without a thriving Scottish economy there will be less traffic for either to move.

Fuel costs and other trends affecting Road Haulage

Current trends with regard to fuel costs have a greater adverse effect on road compared to rail.  Other trends making life more problematic for the road haulage industry are: limitations on Drivers’ hours; an increasing shortage of HGV Drivers; increasing road congestion on main routes; competition from other European countries with lower costs competing for traffic originating in the UK.

In the past the road haulage industry has proved to be adaptable, flexible and responsive and no doubt will be so again but these emerging factors tend to work to the advantage of rail and to the disadvantage of road.

Grants

Unlike England Scotland has retained the powers to award Freight Facilities Grants and Track Access Grants to ensure  that rail and road compete on an even basis, these grants have been instrumental in moving traffic from road to rail or starting new flows of rail traffic, it is essential that they are retained.

Future Markets

The Rail Freight Group in conjunction with the Freight Transport Association have prepared forecasts of future rail freight traffic, based on extensive consultation with members of both organisations.  These will be sent separately to the Committee and are also available on www.rfg.org.uk.  Scottish specific forecasts and routeings are also being developed.

As national government has not yet developed a comprehensive energy policy by default there will be a continuing and increasing reliance on coal over the next 15-20 years for electricity generation, this has clear implications for the enhancement of parts of the Scottish network.

Container movement, both Anglo-Scottish and within Scotland will increase, clearance to 9foot 6 inches (known as W10 Gauge) will facilitate this.  Road congestion in Central Scotland has resulted in the introduction in 2004 of a daily container train Grangemouth-Elderslie-Grangemouth (41 miles a distance over which rail is not supposed to be competitive) which has run with 100% reliability and punctuality in excess of 90% - better than the passenger railway!  It is likely that more of these ‘tactical trains will be introduced, in early 2006 another service will be introduced from Grangemouth.

Timber, both as a stand alone commodity and as fuel used in bio-mass plants for electricity generation will lead to increased traffic on rail away from main routes but near where the timber is located, i.e. the Highlands and the Southwest.  This will require careful consideration of the siting of bio-mass generating plants and access to them by rail or perhaps water.

Other markets are likely to be subject to incremental growth or remain static.

Current network capability

The capacity, i.e the ability of the network to accommodate trains, is being produced by Network Rail Scotland in its Route Utilisation Strategy (RUS) which will for the first time make a detailed assessment of the capabilities of the network, where constraints exist and what can be done to remove them.  This Scottish RUS will be facilitated by a nationwide Freight RUS; these two strategies will assist in decision making and setting priorities.

Enhancements on stream

Reopening of the line from Stirling to Alloa will facilitate the movement of coal to Longannet taking it off Glasgow-Edinburgh routes and the Forth Bridge creating paths for more passenger trains between Fife and Edinburgh, improve the punctuality of Edinburgh-Glasgow services and reduce delays to coal trains.

Gauge enhancement Mossend-Elgin will allow through movement of 8foot 6inch containers between the North East and South and East coast UK ports.

Desirable freight enhancements

In considering enhancements to the Scottish network to improve current freight movement and fit the network to handle increased volumes of freight we summarise below a list of enhancements that would benefit freight and, alongside that passenger traffic as well.

Former G&SW route and access to it

The former Glasgow and South Western route runs from Glasgow to Carlisle via Kilmarnock and Dumfries.  An important ‘feeder’ line for Ayrshire and imported coal traffic through Hunterston runs from Newton-on-Ayr via Annbank joining the G&SW route at Mauchline.

The route is working close to capacity from Mauchline south, constraints are: a long single line section from Annan to Gretna (13miles) and long block sections (distance between signal boxes).  The ‘feeder line is also single and capacity constrained.

If, as seems likely, coal traffic increases it will have to be diverted to other longer busy routes e.g. the East Coast Main Line or capacity on the G&SW route improved south of Mauchline.  Options, not mutually exclusive are redoubling the Annan-Gretna section or putting in additional loops and some resignalling to increase capacity.

If Hunterston is developed as a container port and capacity is increased on the ‘feeder’ line and the G&SW container traffic could be routed, all or in part via the G&SW route rather than Kilwinning-Paisley-Shields Jctn. on to the West Coast Main Line(WCML).

The main route for container traffic is the WCML.  If that route is closed, planned or unplanned, the effect on transit times of this traffic is severe.  It is most desirable that the G&SW route is cleared throughout to Glasgow to accept 9foot 6inch containers on conventional wagons, access to the key freight hubs, Coatbridge and Mossend is good.  Apart from clearance work it would be necessary to provide at least one additional loop between Kilmarnock and Glasgow and consider the length of the existing loop at Lugton.

The above two options are not interdependent, the route could be improved south of Mauchline only but the RFG considers the route should be improved throughout.

Development of Hunterston as a container port

If this happens about 55% of the traffic will never leave the port but transfer ship to ship.  Of the remainder there will be substantial movement by rail to the West Midlands, NW and NE England.

This leaves the problem of traffic destined for Scotland.  The road network serving Hunterston north and south is completely unsuited for heavy lorries and is the main cause of local objection to development of the port, construction of a suitable road network would be difficult, expensive and raise further objections.

The RFG proposes that all Scottish destined/originating traffic should be moved by rail between Hunterston and the cluster of freight terminals located Coatbridge/Mossend where most companies have their Regional Distribution Centres,

Freight terminals Central Scotland

Whilst the Freightliner terminal at Coatbridge has capacity for expansion and good access the terminals at Mossend are more difficult to access, more difficult to work and some are working near to capacity limits.

There is a strong case for examination of these terminals with a view to redevelopment.

Further Gauge Clearance

The WCML is cleared for the movement of 9 foot 6 inch containers from Carlisle to Mossend/Coatbridge, the proposed Gauge Clearance to 8foot 6inches from Mossend to Elgin is very welcome but eventually Scotland needs to be able to move 9foot 6inch containers preferably on conventional wagons to and from other locations.

The RFG would recommend the clearance of at least one East-West route in Scotland, i.e. from the West Coast to the Edinburgh area and clearance of the Highland main line to Inverness these works to be done in stages overtime taking every opportunity to improve the clearance situation with the ultimate goal of achieving 9 foot 6 on conventional wagons.

SUPPLEMENTARY EVIDENCE FROM TGWU

T&G SCOTLAND is the Scottish region of the Transport and General Workers Union (TGWU). T&G Scotland represents around 80,000 working people and their families throughout Scotland. T&G membership is across all industrial sectors and the union is committed to advancing the interests of workers in the workplace and in the wider community.

As the representative of thousands of professional drivers and related mobile workers across the transport sector in Scotland, with large concentrations in our Road Transport (Commercial) trade group, we welcomed the opportunity to give evidence to the inquiry on Tuesday 21st March 2006.  During this evidence session it was requested that the proposals on specific issues of the STUC written submission in relation to road freight be expanded upon (Col 3557) in terms of actions the Scottish Executive could take within its legislative competence to address some of the concerns highlighted during the inquiry.  This paper outlines the major issues that we believe the Scottish Executive could take action on to deliver real improvements within the industry in Scotland.

The freight and logistics sector is of crucial importance to the Scottish economy, providing significant employment and opportunities for economic development.  T&G SCOTLAND recognises that all forms of freight transport will continue to contribute to an environmentally sustainable freight and logistics industry in Scotland and believes that the freight and logistics sector must play a key part in the Scottish Executive’s overall Strategy for Transport.  However, it must be recognised that all modes tend to interact with road freight at some point in their journey.

We recognise that the action required to address some of our concerns, particularly in relation to working time issues, would have to come from Westminster.  However, we do believe that there is scope for the Scottish Executive to address many of the concerns of our members and problems within the industry in Scotland itself.

Further practical action could be taken by the Scottish Executive, in relation to the following issues to create a better working environment for drivers in the road haulage industry, and in turn improve road safety and boost the economy.

Driver Shortage/ Image of the Industry

Previous evidence has identified that there is a clear driver shortage within Scotland.  The shortage can be assigned to a number of factors including:

  • The working time directive and abuses of it in respect of holidays and periods of availability.
  • Wage levels
  • Long Hours
  • Lack of work-life balance
  • Cost of training – for those wishing to enter the industry

The Scottish Executive has the power to assist more people to train to be LGV drivers and there are substantial costs associated with training in the industry (between £2,000 and £3,000 for initial tests) and the implementation of schemes to subsidise that training would address this issue.  We would suggest that a starting point to addressing this issue would be for the Executive to meet with the representative trade unions and other key stakeholders to discuss how to try to address the labour shortage in the industry.

However, it should also be recognised that Scottish haulage companies are making increasing use of foreign drivers, and that foreign companies are increasingly involved in the Scottish industry.  The discernible problem exists that foreign drivers are being employed for lower wages and under poorer working conditions than Scottish workers would expect.  In our experience, many foreign drivers are paid the minimum wage and work long hours, sometimes with little regard for the working time directive and for drivers’ hour’s regulations.  This has an adverse effect not only on the Scottish workforce, but on the foreign workers themselves who are exploited as cheap labour.

In relation to problems within the industry related to the Road Transport Directive.  Although we recognise that the situation can be reviewed and changed only at Westminster.  We believe that the Scottish Executive should consider how the working time legislation in the industry is being enforced in Scotland by the Vehicle and Operator Services Agency.

We would also suggest that in order to fully address all of these issues, that a review of the industry, similar to that carried out by Walter Williamson for the Scottish Executive in relation to the tanker industry, should take place.

Working Conditions

We also believe that the Scottish Executive should take action to address the problem of the lack of suitable roadside facilities for road haulage drivers.  The T&G believes that a well treated and rested driver is a “safer driver” and action is needed to:

  • put in place adequate and affordable roadside facilities, with proper eating and overnight facilities for transport drivers
  • to build parking places in each and every local authority with full security protection with adequate facilities such as toilets, washing facilities, food venues, CCTV coverage and adequate lighting
  • 24 access to affordable facilities

Both employers and employees within the industry have highlighted the inadequacy of roadside facilities in Scotland.  There are insufficient affordable facilities for drivers on the road network in Scotland.  For example:  At motorway services, there may be 200 spaces for cars and 15 spaces for lorries, yet HGV drivers need to take breaks, eat and rest at the same time as other road users. There is only one set of proper services along the whole length of the M8 at Harthill Service station and only between 15 or 20 spaces for LGVs, despite the volume of freight traffic on that route. Similarly, despite the volume of freight traffic on the A9 from Perth to Inverness, there are no proper facilities where drivers can stop and get something to eat.  Similarly, on the A90 to Aberdeen, there are no proper facilities.

In the past, both unions representing workers within the industry and employers themselves have requested that local authorities make available proper, affordable parking facilities with CCTV and washing facilities, so that drivers can park up at night in a secure place, where they can have an affordable meal and get proper rest and not be forced to park in lay-bys or waste ground. According to the most recent Scottish Executive statistics, 158 million tonnes of goods are lifted within Scotland by UK HGVs and transported to destinations within Scotland.  Goods moved on journeys originating in Scotland with a destination in Scotland amounted to around 9,000 million tonne kilometres in 2004.  However, despite this level of freight traffic there are no adequate roadside facilities for drivers on the main routes in Scotland.  This situation has massive health and safety implications for drivers themselves as well as raising general road safety issues, as drivers in many cases are forced to drive for long periods without sufficient breaks or rests.

We suggest that, as a first step to addressing these issues, there could be an investigation of the main routes and the facilities provided in Scotland, supported or carried out by the Scottish Executive, to identify deficiencies of provision.  Action to address the issues outlined is this paper would serve to support the industry in Scotland and address important health and safety matters.

Other areas in which Executive action could assist the industry include:

  • Investment in Scotland’s key trade routes
  • Improving maintenance on local and urban roads
  • Ensuring full industry consultation involving the TGWU and other trade unions and other key stakeholders on future development of freight strategy.

A fully integrated, cross-modal freight and logistics sector will provide vital economic, social and environmental benefits to Scotland.  This paper has highlighted a number of areas where we believe the Scottish Executive can take action to improve road freight transport and the conditions of those who work in the sector.  The outcome of the Committee’s inquiry and the development of any future Freight Transport Strategy in Scotland will have direct impact on our membership.  We await the development of the publication of the Scottish Freight Strategy by the Executive and trust our comments will be taken onto consideration.

28 March (10th Meeting, Session 2 (2006)) Official Report

28 March (10th Meeting, 2006 (Session 2)) – Written Evidence

submission from baa

Edinburgh Airport Cargo Overview

Cargo

Edinburgh Airport is now the busiest cargo and mail facility in Scotland and the second busiest in the UK.  It currently handles 24,000 metric tonnes of cargo and 26,000 tonnes of mail per annum.  The cargo market grew by 17% in 2003/04 and is forecast to grow by an average of 3.2% per year out to 2030, with mail forecast to grow at half this rate.  The cargo operation is sited on the east side of the Airport (formerly Turnhouse) and has been developed over a number of years.  The Cargo Village currently occupies 7,000m² comprising a mixture of transit sheds (approximately 3,000m²), warehouses, and offices, served by ten dedicated cargo aircraft stands.

Edinburgh Airport Cargo Growth up to 2013

Air Cargo and Mail Forecasts

The air freight business has two major market segments.  These are mainstream/consolidation and express.  Mainstream consists of airlines, freight forwarders, and ground transport companies.  Express consists of ‘integrator’ carriers such as DHL, TNT, UPS, and Parcelforce.  They offer both air and ground transport as one service.  Edinburgh is currently the Scottish hub for this integrator activity in Scotland, representing approximately 80% of Edinburgh’s cargo tonnage throughput.

The major contributory factors to Edinburgh’s dominance in this market are as follows:

  • Geographical position within the major strategic road system.  The M8, M9 and M90 are all within one mile of the airport perimeter.  These good road links with the major ‘hi-tech’ industrial bases Edinburgh, Glenrothes, and Livingston are crucial.
  • Availability of airside access for new distribution hubs.
  • Excellent airport infrastructure, i.e. new cargo stands, airside access points.
  • Good supply of highly trained personnel.

Table 1 below shows indicative BAA forecasts for cargo and mail tonnage.

Table 1:  Air Cargo and Mail Tonnage Forecasts

Year
Cargo Mail
2004 (Actual) 26,900 29,700
2013 35,900 35,600
2020 44,900 41,600
2030 61,800 44,700
Average Growth 3.2% 1.6%

The forecasts show a sustained growth in both cargo and mail tonnage over the period 2004 – 2030, with cargo tonnage expected to grow at twice the rate of mail.

Cargo Developments

While strong growth in cargo is forecast, new developments will be undertaken only as a result of specific requests from cargo handlers.  At present cargo handlers consider their current facilities are adequate and hence no detailed plans are available.  There are however no constraints in cargo expansion at Edinburgh Airport, as there is capacity to develop, an additional seven aircraft stands, and 250000 square metres of warehousing.

Aberdeen Airport

Air Cargo and Mail

Aberdeen Airport’s cargo facilities occupy a total land area of approximately 0.8 hectares.  The main cargo area is located off Forties Road and comprises two transit sheds and warehouses providing approximately 1,600m2 of floorspace, served by a dedicated cargo apron.  A third stand alone transit shed/warehouse, measuring 820m2, occupied by DHL, is located immediately to the south of the main terminal.  Aberdeen’s total cargo business comprises both flown and trucked cargo, as the airport is a focal point for trucked air-freight operators who access other major freight airports such as Edinburgh, Heathrow and Stansted by road.

In 2004, 5,300 metric tonnes of air cargo and mail were handled, representing a 9% rise on the previous year.

In the past, the cargo business at Aberdeen has been constrained due to the restricted operating hours requiring the airport to close between 2230 and 0600 hours.  However, since the approval by Aberdeen City Council, in March 2005, of extended opening hours, the airport has recorded a 12% growth in air cargo and mail throughput.  This supports BAA’s long-held view that the restricted opening hours were limiting the economic potential of the airport and the City and Shire.  Our forecasts indicate that air cargo and mail throughput will grow by an average of 1.6% per year between now and 2030.

Air Cargo and Mail Forecasts

As noted in earlier, Aberdeen’s air cargo and mail business was, until earlier this year, constrained due to the restricted opening hours.  During 2004, Aberdeen Airport handled 5,300 metric tonnes of air cargo and mail.  Since March 2005, however, when planning restrictions were lifted, air cargo and mail volumes have increased significantly (+12%).  This growth clearly demonstrates that cargo operators and freight forwarders are responding to the City Council’s important decision, which provides the operator with certainty that their aircraft can arrive or depart if they are delayed in the evening period, when cargo movements are more common.

BAA Aberdeen has, through the Aberdeen Airport Business Development Forum, commissioned a study into the current and future market potential for air cargo and mail at the airport.  The results of this study could influence the conclusions of the Final Master Plan.

The anticipated growth in international air passenger services is also expected to facilitate sustained growth in Aberdeen’s air cargo and mail business over the forthcoming years.

Table 2 outlines indicative BAA forecasts for air cargo and mail tonnage.

Year Cargo and Mail
2004 5,300
2015 6,800
2030 8,600
Avg. growth a year 1.6%

Table 2: Air Cargo and Mail Tonnage Forecasts

Cargo Developments

Cargo developments are only undertaken in response to specific requests from operators.  Although significant year-on-year growth in cargo throughput forecast, we have not sought to allocate land for cargo over and above that indicated on the 2015 layout.

While additional land for cargo will undoubtedly be needed, BAA Aberdeen believes that this demand can be met in one of two ways; by the expected reduction in the need for helicopter support and maintenance facilities at the airport, or from opportunities arising as a result of the closure of the helicopter runway 05/23.

Glasgow Airport Cargo Overview

Cargo

Glasgow Airport has a busy cargo facility which occupies a land area of approximately 2.5 hectares at Campsie Drive.  The area comprises a mixture of transit sheds and warehouses (providing approximately 8,000m2 of floorspace) and is served by a dedicated cargo apron.  Glasgow’s cargo business comprises both flown and trucked cargo, as the airport is a focal point for trucked air freight operators who access other major freight airports such as London Heathrow and Stansted by road.

In 2004, 8169 metric tonnes of cargo were handled, representing a 54% rise on the previous year.  Air flown cargo accounted for approximately 10% of the total.

The very significant increase in total cargo throughput is mainly due to growth in the volume of “bellyhold” freight being carried on passenger services.  A number of long-haul airlines serving Glasgow such as Emirates and US Airways operate aircraft such as the Airbus A330 and the Boeing 767, which have a large “bellyhold” freight capacity.  Emirates has made Glasgow a Scottish hub for its Skycargo operation, shipping goods to the Gulf region, the Far East and Australasia.  Cargo throughput is forecast to grow by an average of 3.2% per year between now and 2030.

Cargo Developments

While strong and sustained growth in cargo is expected to be facilitated by new direct international services, new developments will be undertaken only as a result of specific requests from cargo operators.  It is our understanding that cargo handlers require additional pallet make-up space to cope with the growth in air flown cargo.  Detailed plans will be brought forward once they have been prepared and agreed with operators.

Cargo developments will only be undertaken in response to specific requests from operators.  However, the easterly expansion of the apron and terminal will require the relocation of the existing cargo facilities located around Campsie Drive.  With significant year-on-year growth in cargo throughput forecast, we have sought to allocate approximately 17.5 hectares (50%) of the land in both layout options for a large cargo base in the indicative development zone at Netherton Farm.  Furthermore, a detailed cargo and MRO (maintenance / repair / overhaul) study will be undertaken by BAA Glasgow and Scottish Enterprise Renfrewshire to pinpoint specific opportunities for Glasgow Airport to develop its cargo business. 

submission from infratil

Infratil Airports Europe Limited (IAEL) own two airports in the UK, Glasgow Prestwick (GPA) and Kent International (KIA), and one in Germany Lübeck (LBC).  GPA was purchased by IAEL in January 2001.

The freight trends at GPA have continued to show a year on year decline over the past three years. The majority of this decline can be attributed to the declining manufacturing base in the electronics sector.  There has also been a reduction in overall freight flights operating through the airport in this time.

The biggest challenges that GPA faces in trying to arrest this decline and bring more freight through the Scottish freight network are:

  • The fact that Scotland is perceived as being on the periphery in relationship with the rest of the UK.
  • Lack of easy access onto the major arteries for the rest of the UK, both rail and road.
  • Cost of transporting freight either north bound to GPA or south bound from GPA.
  • Consolidation of freighter operators into more southern airports.
  • Limited manufacturing base for high volume exports in Scotland.

As over 50% of the freight being imported through and exported out of GPA is destined or originating in the rest of the UK.  There is a requirement for easy links to move air freight onto or from other modes of transport to allow it to reach its final destination.

The major movement of freight to and from GPA is currently done by road.  This additional cost, on top of the airfreight charges themselves, makes it difficult for operators to benefit from the handling capabilities at GPA.  The economical viability becomes border line when it is necessary to transport freight from/to areas further south in the UK.

Areas for development

There are a number of ways that GPA is able to fit into development of the freight sector in Scotland:

From growing existing business, that could use local logistics firms to move the freight in and out of Scotland to the rest of the UK and possibly mainland Europe, by road or rail; to attracting new freight carriers to the airport that would increase the amount of in and out bound freight from Scotland and the rest of the UK.

There would then be the opportunity for these new carriers to be able to offer the potential of new routes that could assist with Scottish firms being able to grow their market share in international locations.

To assist in attracting new business to the area there are a few key issues that could be considered:

  • Obtaining more data on where Scottish freight is being exported to and if there is potential to grow the market with increased or direct services.
  • An incentive for new carriers to operate to GPA rather than other freighter friendly airports in the UK.
  • An inexpensive option for allowing the movement of freight to be between Scotland and destinations throughout the UK and possibly mainland Europe.  Possibly by obtaining linking on the network of freight options travelling south to obtain loads coming north.
  • The option of inter model links allowing air freight to move onto the rail network.
  Volume 1 Contents

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