ROUND TABLES TRANSPORT

DECEMBER 2009

What are the barriers to low-carbon transportation in business? And when will new technology help this shift? These were two of the issues up for discussion at the latest SB Round Table Debate. Tom Idle reports
Participants
Tom Idle, editor, Sustainable Business
Paul Clark MP, Minister for Transport
Mark Browning, director, Halcrow
Ian Berrill, fleet director, Saint Gobain
Nick Coad, group environment director, National Express
Steve Davis, engineering manager, TNT
Richard Hastings, head of planning and logistics, Nestle
Rowland Hill, CSR & sustainability manager, Marks & Spencer
Dean Kerwick-Chrisp, sustainability and climate change, Highways Agency
Colin Marriott, head of fleet services, British Gas
Stephen Steele, head of freight unit, Transport for London
Rob Stubbs, fleet director, Veolia
Rob Wright, national logistics controller, United Biscuits

Covent Garden's magnificent London Transport Museum played the apt host to this latest Sustainable Business Round Table Debate. With road freight and fleet contributing a hefty percentage of the UK's environmental footprint, we set about finding out how better management from those responsible for transport in businesses up and down the country could make a difference - and ultimately find out what the barriers were to low-carbon transportation and good practice for those companies. We also wanted to discover how new technology could help in this shift and when it was due to come on stream.

Business leaders from the likes of United Biscuits, Marks & Spencer, British Gas, Saint Gobain and National Express assembled in the Museum's boardroom to tell their stories and discuss the future. (For a full list of participants, see over the page). Meanwhile, Transport Minister Paul Clark MP offered to give the current state of government thinking from the outset and the group was completed by industry expert Mark Browning, a director with Halcrow, the environmental consultancy sponsoring the session.

Tom Idle, chair: Minister, the common complaint aimed at government is that there isn't much joined-up thinking. How does the relationship between the Department of Transport (DfT) and the Department of Energy and Climate Change (DECC) work? How does policy coming out of one inform the other.

Paul Clark: The over-riding goals that we have in DfT are about congestion and emissions reduction. We alone cannot deliver those as a department without working with other colleagues across government departments.

Tom Idle: The Government's Freight Best Practice programme has been running for a couple of years now. From what I can tell, the take-up has not been brilliant.

Paul Clark: One of the things that surprises me as an MP is that there is a great deal of best practice out there, so why can we not pick that up more? Perhaps you are the people who can tell me why. The DfT is looking at using marketing experts to see how we can get that message across. But the take-up and the interest is increasing.

We have also just launched the Van Best Practice programme. The number of vans on the roads has increased substantially over the last ten years and, contrary to popular myth, they are not all white and they are not all driven by men. There are, however, serious areas where we could achieve more, so we have to continue to push that message out.

Ian Berrill: There is some fantastic information out there and it is free. But the question you have to ask is whether more investment is needed on the market side. Everyone in the room is working for a business that can probably invest in expertise - plus we also have a CSR agenda. But getting into smaller fleet operators; that is something you have to look at - how to get the message out there - that it is cost-effective to take the green road.

Mark Browning: It is quite a challenge. About 45% of the freight sector is made up of single operators with one lorry and it is quite a challenge to penetrate something like that. The guidance from government is very useful, but I think that, if I were to read it as a single operator, I would think that it did not apply to me and that it just applies to big companies.

Tom Idle: Does big business have a responsibility to share best practice further down the supply chain?

Mark Browning: Yes, we all have a responsibility to pass it down. It is a matter of how you pass it down and how it might look in the future. We might even see contractual obligations being passed down to other suppliers, as a performance requirement where you have to meet certain energy and carbon targets within contracts.

Paul Clark: These are decisions that need to be taken by individual companies or groups with small vans. It is about giving them a choice and the information. If we had 90% of HGV drivers on eco-driving training, we could save some 3M tonnes of CO2 over a five-year carbon budgeting period, and cut some £300M a year off the bottom line in terms of fuel costs.
Ian Berrill: And yet, how can we convince a small operator that investment upfront on training will give them a longer-term benefit? We have spent significant time on training in the last two years and that has had quite a payback - but it is a massive upfront cost.

Rob Wright: There is a great deal of opportunity now. The Government has introduced a driver CPC [Certificate of Professional Competence] scheme for HGV drivers. One thing you could do to take that a step further is to make it mandatory that part of the 35 hours of training that an organisation has to give to HGV drivers is SAFED [Safe and Fuel Efficient Driving] training for drivers.

Paul Clark: That's something we're looking at.

Colin Marriott: The link that has made significant difference for our business is that safe and fuel efficient driver training are intrinsically linked: if you train someone to be fuel efficient, you train them to be safer.

Paul Clark: And that dovetails with the road safety strategy that we will soon be launching for the ten years from 2011 onwards.

Colin Marriott: How many new drivers are trained each year, in terms of passing their test? And then how much emphasis, as part of the driving test, is put on safe and fuel-efficient driver driving?

Paul Clark: These are matters which clearly need to be taken on board and looked at. In terms of having safer drivers and better drivers, you could also end up with greater fuel efficiency than you would otherwise have.
You are right to say that this does not just apply to HGVs and that is why the Van Best Practice programme has been rolled out.

Tom Idle: Being a safer driver is one thing, but we are talking about incentives. Are there any plans to implement mechanisms that will really have a big impact on cutting emissions?

Paul Clark: If we can crack the issue to do with electric and hybrid vehicles, then we could have that now.

We are investing some £400M into research, development and delivery. There is about £30M now going into the infrastructure that will be required for electric vehicles, and a further £230M that will be available from 2011, directed at the consumer. That also includes the fleet market, so we are probably looking at support in terms of £2,000 to £5,000 for each vehicle. That will make a difference and I do not need to tell you and your businesses that this will clearly make a difference if you start to get those sorts of numbers rolling.

Rob Stubbs: The infrastructure is key from a fuel perspective. As a business, we have had CNG [compress natural gas] vehicles around London for the last eight years, and we got our first hybrid on the road last week. But there isn't just one solution going forward, but a series of them. It is time we had some commitment from government because we would have taken up CNG across most cities in the UK if there was a decent infrastructure for it. That is the biggest problem.

Rowland Hill: We have trialled two types of electric vehicle - a very low-weight one, and a medium-weight one. But there is a need for that higher level of certainty as to what the fuels of the future are.

Stephen Steele: TfL's operator recognition scheme aims to promote the uptake of best practice through a range of means. We have this idea of tackling not just fuel consumption and CO2, but also collisions and the amount of fines operators are getting. It is about wrapping it all up together. Someone who stops and picks up a penalty charge notice for illegally stopping in the wrong place causes congestion which adds to the CO2 globally.

Colin Marriott: We are trying to service the homes of residents within London, to make sure that they are safe, trying to insulate houses in London, to reduce carbon emissions - and yet we spend half an hour trying to find a parking space. We are spending £1.3M to £1.4M a year on parking fines. It's a farce.

Mark Browning: There needs to be a better connection between urban planning and transport planning across local authorities. It is inconsistent at the moment and I am surprised that, given the focus of carbon, it does not really have that much focus in transport planning in terms of policy analysis.

Tom Idle: This comes back to cross-departmental working to make things really happen. Let's move on. We were talking about incentives earlier and our last Round Table Debate focused on the Carbon reduction Commitment (CRC) and energy managers love that mechanism, because it puts energy on the desk of the chief executive and finance director. Are there any incentives that you guys might like to see implemented by government, which would incentivise cutting emissions in transport?

Nick Coad: One of my worries about all this best practice, and trying to send adverts out, is that it is great - but does anyone pay any attention? Just make it commercial, and let those who take a lead in this area succeed. The CRC seems to be a mechanism that you could very easily apply to transport.

Rob Stubbs: Incentive is a good word. I always use the analogy of when we got rid of four-star petrol and went to unleaded. It was discounted for a while but we all knew that it would come back and smack us on the nose. But it incentivised us, the world changed, and that was a classic example of how it can work.

David Bellamy: Historically, in the food manufacturing area, transport costs have been relatively small, and transport has always fallen in the rump end of the business. The carbon debate is hiding the debate about transport costs but that is beginning to change.

Dean Kerwick-Chrisp: I have heard much about the fears and uncertainty of investing in emerging technologies. But I am curious as to just how much more efficient we could be with what we have.

Nick Coad: When we look at our public transport business, the greatest impact for us on our fuel efficiency is getting efficient running on the roads. I am not trying to create a mandate for road extensions here, but that is a very important issue.

Ian Berrill: I agree. Electric vehicles do not work for us - we have cranes in the back of our vehicles and it is not an option for us. We are looking at reducing the amount of miles we travel per day. Instead of going to technology in vehicles engine-wise, we are looking at telematics. That will be the short-term strategy until we can say, 'Yes, electric vehicles are the future, and you can refuel them and the battery life will be correct'.

Tom Idle: So, who is at that stage? How close are you to closing that big order for alternative-fuelled vehicles?

Rob Stubbs: We are about there now with electric vehicles. In the City of Westminster, we've 120 waste trucks running around in the four and a half square miles and these will be dual-fuel. We believe that the hybrid technology is right for our operation - but we are generating our electrical power from stop-start operation and braking action, so it is not for the guys driving on the motorways.

Richard Hastings: As a food and drink industry we are tackling consolidating, sharing trucks, telematics on the trucks, changing the network, and other bits and pieces. But the problem we have is: what targets should we go for as individual companies?

Colin Marriott: At British Gas, the opportunity to operate electric vehicles (EVs) is high. We have an operating model that is home-based and the engineers do 50 to 80 miles a day. Work scheduling is all about minimising driving time and maximising productivity. We are offering manufacturers a carrot because by 2015, we want to be operating 500 EV vans.

Steve Davis: We operate 51 electric vehicles, mostly in and around London. They three times more expensive than a diesel equivalent. But there is not one mainstream truck manufacturer who is remotely looking at electric.

Colin Marriott: We run three hybrids, and they are not paying.
Nick Coad: We have been trialling them...but they are not close to what we are hoping to achieve. Not even close.

Stephen Steele: It is interesting that the discussion has focused on improving the emissions from vehicles. We did some freight modelling and found that there would be about a 30% increase in van mileage to 2025, but we cannot accommodate that increase in the roads. You will have gridlock.

Tom Idle: Nestlé and United Biscuits have been sharing lorries. How did that partnership come about?

Rob Wright: Nestlé has similar types of vehicles, with similar dimensions and we started collaborating.

Richard Hastings: We had issues to deal with because marketeers do not particularly like the idea of your biggest selling line of biscuit being on the back of your competitor's truck, but we have worked our way through that. Crucially, we have worked through the most difficult thing, which was to sort out the cash.

Ian Berrill: That is commendable. I can't even get my own group of companies to share vehicles, let alone competitor companies. How did that first conversation go? 'Excuse me, boss. I've got this great idea!'
Rob Wright: What was clear from both organisations was that we had support from the senior level.

Tom Idle: Mark, you have done quite a bit of transport planning. You did some work for TFL, didn't you?

Mark Browning: Yes, we did. We modelled how achievable it is to reach a 60% reduction on 1990 levels in CO2 abatement by 2050 across the transport sector. We are looking at other cities now around the world. It was all about looking at the impact that different policy packages would have in meeting that target, and what they would contribute to that.
There were about 13 policy packages from eco-driving to the use of new technology - principally in cars but also in vans. You can see it on a website called VIBAT.

New regulations being brought in for cars will make quite a big contribution, as will eco-driving. When you model it, and project out transport increases up until 2015, you really need a high degree of intervention in all those policy packages in order to achieve that type of reduction. Just tinkering around with low interventions in each of these policy packages does not really have much of an impact.

Nick Coad: When it comes to transport it is simple because there are only three things you can do. First, you can manage demand. You can improve efficiency. Or you can do model shift. And it doesn't matter how excited you get about eco-driving. If you look at the growth in road transport by 2020, you are looking at about a 20% increase. We will have to do much more in terms of reducing car use.

Richard Hastings: To get people out of cars, the way we are taxed has to be changed. If you put the tax on the fuel, people would equate the amount they spend on diesel for the journey far more easily.
Dean Kerwick-Chrisp: Technology will go some way, but there is actually a behavioural change needed.

Rowland Hill: Owning a car is no longer quite as aspirational. And as oil prices peaked in 2008, as a retailer we saw a real fall-off in visits to edge-of-town locations as well.

David Bellamy: It has been the biggest contradiction from the Government, in a way. If you mention recession, with people buying fewer cars, what do they do? They throw more money at people to buy more cars. What sort of message is that sending out about society's values?

Rob Wright: The one thing the Government could do, which would significantly reduce carbon emissions from freight transport, would be to extend the length of trailers. There is a great opportunity in having the 2m longer trailer, which would potentially reduce growth rate freight by 15%.

SPONSORED BY The content you are trying to access is exclusive to subscribers of Sustainable Business.

Join the SB community today to receive the magazine and to gain full access to the website, including all news, features, interviews, analysis and commentary.

OTHER
ROUND TABLES