Supporting economic growth in London

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1 Supporting economic growth in London Efficient logistics Delivering safe, efficient, sustainable logistics

2 Summary Why does freight matter to London? Every thing you see in a city centre is, or was at some point, a piece of freight and needed to be moved there. Cities are built by freight and they live everyday on freight. Over 360,000 tonnes of goods are moved in London by lorries on average each day. That s 15,000 tonnes picked up or dropped off each hour, or 250 tonnes every minute. And this only a part of what freight does as it excludes vans. Without an efficient logistics sector, shops would run out of products, hospitals out of medication, cash machines out of cash and our workshops out of widgets. Anything which makes it more difficult to deliver or collect goods leads to an increased cost of doing business in London. And increased costs increase the price of goods in shops raising the cost of living for Londoners. In addition to this support role there is a substantial direct economic contribution from logistics. In 2007 the London logistics sector s output was 8 billion (3.4 per cent of London s output) and it directly employed over 220,000 people (5.2 per cent of London s employees). An additional 80,000 people performed logistics occupations in other industries. Consequently, maintaining and improving the quality and cost efficiency of logistics is a key way to help improve London s economy. Below, FTA sets out what Greater London s public authorities the Greater London Authority (GLA), Transport for London (TfL) and the London Assembly could do to help improve London s economy through logistics. On page 4 we set out more detail on some of the key issues.

3 Out-of-hours deliveries on quiet basis promoted Hgv movement restrictions to be reduced How can London be improved for logistics Reform of London Lorry Control Scheme to encourage/reward quieter deliveries Protect/enhance traffic flow to ensure continued efficiency: invest in road network to improve flow speed and reliability of movements 20mph zones to be targeted to key areas and not to conflict with major freight routes cycling infrastructure not to reduce ability to serve the area Increase in loading/unloading availability wherever possible Co-operative approach on parking fines working with industry to target reduction in contraventions and Penalty Charge Notices for delivering to London businesses Water and rail-side access to be preserved to allow local alternative mode deliveries where possible Future low emissions standards to be developed in discussion with industry and needs of London business to be taken into account Importance of freight to be reflected in all relevant London policy statements planning as well as transport Assistance from TfL in promoting best practice amongst London boroughs, and a co-ordinated approach between them and TfL itself Supporting economic growth in London Efficient Logistics 3

4 Issues in detail Cycling FTA is committed to improving safety for all road users, including cyclists. To support this, the Association is developing an accreditation scheme Cycle Marque. The scheme is based on the TfL standard and is intended to recognise improvements made by industry and also to provide the industry, in particular the construction sector, with a nationally recognised standard to work towards. Whilst cycling is undoubtedly a healthy activity, it is not without risk. Cycling in London is potentially dangerous to those who are not fully aware of the hazards that surround them. The Association strongly believes that all road users have an obligation to act responsibly and share the road safely together. So it is important that not only do companies take steps to make their vehicles safer and to train their drivers, but that there is increasing awareness and education for cyclists about how to behave around large vehicles. This needs to be coupled by strong enforcement of dangerous and illegal behaviour by cyclists as well as drivers. FTA believes that TfL must play a central role in delivering this message. Initiatives to improve safety for cyclists must be based on evidence, providing real action with real results. To underpin this, there needs to be a comprehensive, evidence-based action plan which is aimed at all parties, not just the freight industry. Authorities should work with, and where possible endorse, industry initiatives to improve cycle safety with a minimum of bureaucracy for example FTA s Cycle Marque scheme. Out-of-hours delivery curfews and the London Lorry Control Scheme FTA recognises that in many congested parts of London, it is simply not possible to increase capacity. Therefore TfL needs to make best use of London s existing road network by smoothing the traffic flow and spreading vehicle movements across the whole day. A large proportion of freight traffic is moved in morning peak hours due to night-time delivery and access restrictions. There are measures which companies can and have taken to make their vehicles quieter and to train drivers so delivering out-of-hours doesn t have to necessarily disturb local residents. FTA has been working with the Noise Abatement Society on developing this work through the Quiet Deliveries Demonstration Scheme and for the Olympics. Whilst intended to protect residents from noise, the London Lorry Control Scheme (LLCS) is a blunt, indiscriminate measure which applies to all goods vehicles over 18 tonnes. It doesn t recognise or incentivise quieter vehicles nor does it apply to noisier, smaller vehicles. By restricting vehicles to the Excluded Route Network (ERN), the LLCS requires vehicles to take some very large detours. Although the ERN has been extended in parts over the years it is still very restrictive. These large detours result in increased fuel consumption, CO 2 emissions as well as increased NOx and PM10 emissions which have a detrimental impact on air quality. The scheme is highly bureaucratic, particularly the requirement to have a permit. Even if a vehicle has been issued a permit, if it is seen off the ERN the company may be asked for information about the journey and to provide 4 Supporting economic growth in London Efficient Logistics

5 evidence that it was necessary. This imposes an additional burden on industry. The scheme is complicated and drivers can easily fall foul of the routeing requirements, typically by exiting the ERN too early, and FTA believes that the fine levels are disproportionately high at 550 for the company and 120 for the driver. FTA believes that by incentivising the uptake of quieter vehicles a better solution could be found that will meet the needs of both residents and businesses. London Councils should look at resolving the other causes of noise on the move such as the use of quieter road surfaces, fixing potholes and removing speed humps and traffic build-outs and provide a more holistic approach rather than simply continuing with a blanket restriction on goods vehicles over 18 tonnes. FTA seeks support for an urgent review of the London Lorry Control Scheme to incentivise the uptake of quieter vehicles and to reduce the unnecessary additional mileage that it causes. Support is also sought to promote the potential of out-of-hours deliveries and to encourage the relaxation of delivery curfews. Improving air quality and reducing emissions The freight industry is playing its part to improve London s air quality and, over the last 20 years, PM emissions from new hgvs have reduced by 67 per cent and NOx by 75 per cent. Given that 90 per cent of freight in London is transported by road, the best way to improve the environment is to help road freight be more efficient. Whilst FTA understands and supports the reasoning behind the London Low Emission Zone, its implementation has disproportionately hit smaller businesses who are less likely to have the means to upgrade or purchase newer vehicles that some of the larger companies do. FTA members in London believe that removing the barriers to an efficient freight industry, such as the over-restrictive and out-of-date London Lorry Control Scheme and encouraging boroughs to relax out-of-hours delivery curfews, will bring the biggest improvements in air quality whilst reducing carbon emissions. FTA supports the aim of the congestion charge in deterring discretionary or non-essential journeys. However, unlike most individual motorists, freight operators rarely have the option of switching to public transport. Whilst operators of plug-in electric vans do benefit from a 100 per cent discount to the charge, for the foreseeable future this fuel source is only an option for smaller commercial vehicles. When the Greener Vehicle Discount for cars was introduced two years ago, the Alternative Fuel Discount was removed leaving no low-carbon incentives for larger commercial vehicles. The congestion charge provided an important market for manufacturers of greener technology and fuels such as gas. To help companies meet their climate change obligations, FTA has established the pioneering Logistics Carbon Reduction Scheme (LCRS); the first ever carbon reporting scheme for commercial vehicle transport. It is a voluntary scheme to record, report and reduce carbon emissions. FTA has recently published its third LCRS Annual Report which showed that participants of the scheme are reducing their emissions year-on-year towards a target of eight per cent reductions from 2010 levels by The scheme has attracted over 75 members from across the UK, accounting for over 58,000 hgvs and vans. LCRS has received endorsement from Transport Minister, Mike Penning MP and Keith Brown MSP, Minister for Transport in Scotland. FTA asks TfL to seek industry s early input to the proposed Ultra Low Emission Zone and to ensure that industry has sufficient notice to plan for any new emissions standards. FTA asks TfL to reintroduce the Alternative Fuel Discount to the congestion charge for gas vehicles. FTA asks TfL to declare support for the Logistics Carbon Reduction Scheme. Supporting economic growth in London Efficient Logistics 5

6 Cost of congestion By 2031 it is expected that there will be 25 per cent more trips a day on public transport and a 14 per cent increase in road congestion Each year, delays and disruption on London s roads cost the city s economy approximately 2 billion, while an associated rise in toxic air particles has the potential to contribute to thousands of deaths 20 per cent of the UK s congestion is concentrated on just five per cent of the road network in London Congestion charge costs fleet vehicles 9 each per day The average running costs of the largest hgv is about 1 per minute, so sitting in congestion is costly to transport companies Penalty Charge Notices (PCNs) FTA s recent PCN survey identified a 40 per cent rise in the number of parking PCNs issued to member companies delivering in London (between January 2009 and June 2012). The data which was provided by 27 member companies, also showed that 60 per cent of all PCNs received in London were issued by just four authorities Transport for London, Westminster, Camden and City of London. A large number of PCNs are issued to vehicles making deliveries in areas where loading is permitted but parking is not, such as on yellow lines and in loading bays. These fines tend to be successfully overturned on appeal. However, this process is a waste of time and money for both enforcement authorities and for businesses. FTA believes that the best way to address this is for enforcement authorities to take a pragmatic and informed approach to enforcement. This would mean that a vehicle is presumed to be loading/unloading unless there is clear evidence to the contrary. There are also many locations across the capital where there is nowhere to load/unload. This may be solely due to 24/7 loading restrictions or coupled with other restrictions such as night-time delivery curfews. In addition, greater consideration must be given to delivery and servicing needs in new developments and when changes are made to the road network, such as the development of cycle superhighways. This applies to both deliveries to businesses and to home deliveries. For its part, the industry is committed to, where possible, planning deliveries outside of restricted hours, training drivers and only appealing PCNs where companies believe that a PCN is issued in error. To support its members, FTA has developed a range of PCN compliance and advice material and has developed a PCN administration service to carry out PCN administration on behalf of members. FTA asks TfL and the boroughs to work with the industry to reduce the number of Penalty Charge Notices issued to freight operators and ensure there is adequate kerbside provision for deliveries and servicing activity. 6 Supporting economic growth in London Efficient Logistics

7 Case example Company A which participated in the FTA PCN survey has estimated that by 2015 it will no longer be financially viable to deliver in London due to the prohibitive costs of PCNs. Company A paid nearly 1 million in PCN fines in 2012 and is projected to pay around 1.5 million in The actual PCN costs for this company in Q and Q were higher than originally projected, increasing by 3.3 and per cent respectively. Figure 1 details the trajectory of the projected costs which are rising exponentially. Figure 1: Company A projected and actual costs for PCNs (projections are in orange) PCN costs 480, , , , , , , , , , , , , , , , , , , ,000 80,000 60,000 40,000 20,000 0 Company A current projection Company A previous projection Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Supporting economic growth in London Efficient Logistics 7

8 London population and economy London s population grew by a million between 2001 and 2011, reaching 8.2m, and will reach 9 million by 2018 and 10 million by million people are in work each day with a daytime population of 10 million In 2012, London s residents had the highest gross median weekly pay in the UK, at 651 for males and 575 for females 21.9 per cent of the UK s total GVA (Gross Value Add an estimate of GDP) comes from London. This is roughly equal to the GDP of Sweden, Belgium, or Switzerland Depending on measure, London has the third, fourth or fifth largest urban economy in the world and has an estimated GDP of $761billion London s economy grew by nearly 12.5 per cent between 2007 and 2011 twice as fast as the rest of the UK 1 in every 5 pounds earned in London goes to subsidise other regions in the UK Estimates put the total value of London exports at around 92 billion a year representing around 24 per cent of the total value of all UK exports About FTA Freight Transport Association (FTA) is one of Britain s largest trade associations, and uniquely provides a voice for the whole of the UK s logistics sector. Its role, on behalf of over 14,000 members, is to enhance the safety, efficiency and sustainability of freight movement across the supply chain, regardless of transport mode. FTA members operate over 200,000 goods vehicles almost half the UK fleet and some one million liveried vans. In addition, they consign over 90 per cent of the freight moved by rail and over 70 per cent of sea and air freight. FTA works with its members to influence transport policy and decisions taken at local, national and European level to ensure recognition of the needs of the industry s supply chains. Freight Transport Association Limited Hermes House St John s Road Tunbridge Wells Kent TN4 9UZ Telephone: Fax: Website: Registered in England Number FTA 07.13/NC

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