FTA urges UK govt to support transition to gas fuel
The Freight Transport Association (FTA) has called upon the UK government to provide the necessary assurance to freight operators in order to encourage them to embrace gas as a viable alternative to conventional diesel.
It its Gas Manifesto, which was published today, the FTA urged the government to look into alternatives to diesel fuels that offer carbon savings, including natural gas and biomethane, providing a vision for how this low carbon future could be brought to fruition.
Natural gas can be used as a road fuel either as a liquefied natural gas (LNG) or a compressed natural gas (CNG), producing less harmful emissions than conventional fuel. However when biomethane produced from waste is used, carbon savings in excess of 60 percent can be made when compared to an equivalent diesel vehicle.
The FTA's Gas Manifesto supports the development of a national refuelling infrastructure on the main motorway networks. For smaller operators, public refuelling stations would give confidence to invest in gas-powered HGVs as part of planned vehicle replacement cycles as well as benefit larger companies.
According to the FTA, the Treasury also urgently needs to confirm at least a seven year rolling guarantee for road fuel gas duty rates to provide certainty to support vehicle and infrastructure investment.
Rachael Dillon, FTA Climate Change Policy Manager said:
"Gas is a credible option for industry to make serious reductions in carbon emissions whilst serving the needs of the economy in delivering goods and services. However, in order to significantly increase gas-powered HGVs on UK roads, government needs to support the development of a national refuelling infrastructure on main motorway routes to enable long-distance trunking for vehicle fleets.
“Working with a group of FTA members earlier this year, we identified 20 optimal locations for gas refuelling infrastructure. Government needs to give greater consideration to the requirements of the operator, and ultimate purchaser, of low carbon vehicles to shape policy that benefits rather than hinders investment."
The proposal has support from large freight operators such as the John Lewis Partnership and UPS, both members of FTA's Logistics Carbon Reduction Scheme (LCRS), who believe that biomethane represents a low carbon alternative to diesel.
Justin Laney, General Manager – Central Transport, John Lewis Partnership commented:
"John Lewis Partnership has a very ambitious target to reduce carbon emissions from its truck fleet. We believe that the best fuel to achieve that is biomethane gas. Biomethane is not only excellent for reducing emissions, it is also good for investment, jobs, and balance of payments.
"If the fuel duty differential between gas and diesel was fixed for a longer period, and Green Gas Certificates were allowed in transport carbon reporting, then two of the main barriers to adoption would be removed."
Peter Harris, Director of Sustainability, EMEA at UPS said:
"At UPS we are continuously evaluating the market for technologies and alternative fuels to reduce the carbon intensity of our ground transport operations. Different parts of our operation require different strategies and solutions. For our HGV fleet on long distance routes the use of liquefied biomethane has great promise in terms of both reducing our carbon footprint and being economically viable.
"A long term strategy securing the availability of liquefied biomethane for transport purposes and also committing to the fuel duty differential between natural gas (specifically liquefied biomethane) and diesel would provide us with both the means and the confidence in the economics for further investment and future deployment of additional gas fuelled vehicles."
Driver shortages: Why the industry needs to be worried
While driver shortages are a global problem, with a recent survey from the International Road Transport Union suggesting that driver shortages are expected to increase by 25% year-on-year across its 23 member countries, the issue has very much made itself felt for UK businesses in recent weeks.
A perfect storm of factors, which many within the industry have been wary of, and warning about, for months, have led to a situation wherein businesses are suddenly facing significant difficulties around transporting goods to shelves on time, as well as inflated operating costs for doing so.
What’s more, the public may also see price rises as a result due to demand outmatching supply for certain product lines, which in turn brings with it the risk of customer dissatisfaction and a hit to brand and stakeholder reputation. Given that this price inflation has been speculated to hit in October, when the extended grace period on Brexit customs checks comes to an end, the worst may be yet to come.
"Steps must be taken to make a career in the industry a more attractive proposition for younger drivers, which will require a joint effort from government, industry bodies, and the sector as a whole"
That said, we have already been hearing reports of service interruption due to lack of driver availability, meaning that volumes aren’t being transported, or delivered, to required schedules and lead times. A real-world example of this occurred on the weekend of 4-6 June with convenience retailer Nisa, with deliveries to Nisa outlets across the UK affected by driver shortages to its logistics provider DHL.
But where has this skills shortage stemmed from?
Supply is the primary issue. Specifically, the number of available EU drivers has decreased by up to 15,000 drivers due to Brexit alone, and this has been further exacerbated by drivers returning to their home country during the COVID-19 pandemic, as well as changes to foreign exchange rates making UK a less desirable place to live and work. This, alongside the recent need to manage IR35 tax changes, has also led to significant inflation in driver and transport costs.
COVID-19 complications have also meant that there have been no HGV driver tests over the past year, meaning the expected 6,000-7,000 new drivers over the past year have not appeared. With the return of the hospitality sector we understand that this is a significant challenge with, for instance, order delivery lead times being extended.
It is little surprise, therefore, that the Road Haulage Association (RHA) earlier this month became the latest in a long line of industry spokespeople to write to the government about the driver shortage for trucks. The letter echoed the view held by much of the industry, that the cause of this issue is both multi-faceted and, at least in some aspects, long-standing.
So, many in the industry are in agreement as to the driving factors behind this crisis. But what can be done?
Simply enough, outside of businesses completely reorganising their supply chain network, external support is needed. In the short-term, the government should consider providing the industry with financial aid, and this can also be supported more widely with legislative change.
Specifically, immigration policy could be updated to place drivers on the shortage occupations list, which would go some way towards easing the burden created by foreign drivers returning to their home countries. Looking elsewhere, government should also look for ways to increase the availability of HGV driver tests after the blockage created by the coronavirus lockdowns.
Looking more long-term, steps must be taken to make a career in the industry a more attractive proposition for younger drivers, which will require a joint effort from government, industry bodies, and the sector as a whole. As it stands, multiple sources suggest that the average age of truck drivers in the UK is 48, with only one in every hundred drivers under the age of 25. We must therefore do more to increase the talent pipeline coming into the industry if we are to offset more significant skills shortages further down the line.
On the back of a turbulent year for the supply chain industry, it has become increasingly clear that the long-foretold shortage of drivers is now having a tangible and, in places, crippling effect on supply chains.
Drivers, and the wider supply chain industry, have rightly been recognised for the seismic role they played in keeping the nation moving and fed over the past year under unprecedented strain. If this level of service is to continue, we must now see Government answer calls to provide the support the sector needs, and work hand-in-hand with the industry to find a solution. If we do not see concrete action to this effect soon, we are likely to be in for a turbulent few months.
Rob Wright is executive director at SCALA, a leading provider of management services for the supply chain and logistics sector