In the summer of 2018 I attended a meeting at Elland Road about the introduction of Leeds Clean Air Zone. The venue was packed with representatives from local businesses and hauliers. The vast majority of attendees didn’t seem too happy with what was being said; if you’re vehicles aren’t Euro 6, it is going to cost you to enter the proposed zone – even if your base is within the boundary. Full details of the scheme have since been released, including the restricted area and information on funding schemes to assist hauliers with purchasing compliant vehicles.
Yesterday the London Ultra Low Emission Zone was launched in central London, affecting all road-going vehicles that don’t meet certain criteria (full details here). Interestingly, no such rule is applied to trains. The RHA has criticised the scheme for being too simplistic and anti-motorist (here). Birmingham and Leeds are due to launch their initiatives in January 2020 with many other cities expected to follow thereafter.
What does this mean for the Haulage industry and fleet operators?
The cost of a new Euro 6 and therefore compliant tractor unit is approximately £100,000 depending on specification, manufacturer etc. For a small haulier or business running their own fleet, that’s a huge amount of money which some certainly cannot afford. Considering the haulage industry is run on such small margins with fierce competition, it is a cost increase that will not be accepted by customers. Operators with large fleets are much less affected by this introduction, typically their fleets are continuously updated with new equipment, so it is a scheduled cost not out of the ordinary, which will only make it more difficult for smaller hauliers to compete against the big players. For a business with its own vehicle(s) it might simply mean they no longer go to these areas, but that is restricting trade and not a viable long-term strategy as more zones are introduced. If a business is based within the zone, perhaps it will mean they can no longer operate their vehicles?
Theoretically then, we could be about to see many more smaller hauliers and other businesses stop trading. It could even affect the already beleaguered high street, if independents and smaller chains are forced to accept price increases or invest in new fleet could it be the final straw?
Perhaps a solution could be found via collaboration, I’ve spent a considerable amount of time assessing collaboration opportunities and thoroughly believe it is a viable concept for many businesses, but it requires flexibility and commitment. If enough businesses were to collaborate, the service disruption could be fairly minimal but a significant efficiency increase could be realised, this of course only applies to volumes less than full loads. A reduced number of part loads in favour of shared full vehicles would not only save money but reduce congestion and pollution too.
Consolidation centres could be another option, similar to the model used for the Bristol-Bath Consolidation Centre. In this example all suppliers less than full load size would deliver in to the consolidation centre and a third party delivers onward to all outlets. I don’t suggest this option with a 3PL in mind, more as a way of ensuring smaller operators can continue to operate.
I believe that we need to act to improve air quality and protect the environment, but moving straight to a legislated charging policy feels like the lazy option with potentially dire consequences for many small businesses. It is difficult not to see this in the same light as speed cameras – a cash generating deterrent rather than long term solution.