Thursday 20 January 2022

DfT relaxes cabotage rules despite industry opposition

The Department for Transport (DfT) pressed ahead with plans for a temporary relaxation of cabotage rules for non-UK hauliers late last month, despite 72 per cent of respondents to its recent online survey on the proposals stating their opposition to the move.

The DfT temporarily extended cabotage allowances until 30 April next year, permitting unlimited cabotage movements of foreign-registered HGVs within Great Britain for up to 14 days after arriving in the UK on a laden international journey.

The changes, which came into force on 28 October, have been introduced “in order to alleviate pressures in the supply chain associated with the current shortage in lorry drivers”, said DfT.

Normally cabotage, which is defined as hire-and-reward transport of goods between two places in the same country by an operator from another country, is heavily restricted.

The plans had been slammed by many British hauliers, the Road Haulage Association (RHA) having stated that it was “shocked and disappointed”.

“The RHA opposes this proposal because we believe more effective measures can be taken to deal with the shortage of lorry drivers and the supply chain crisis in the UK,” the association said in mid- October.

It admitted the move would “help deal with the crisis in haulage availability, for supermarkets especially” but added that it would “undermine the work being done to provide long-term solutions to deal with problems of lorry driver availability, pay and conditions.”

Logistics UK, meanwhile, said it recognised the need for the limited relaxation; head of road freight regulation policy James Firth said it would provide “breathing space” to “enable British drivers to be recruited, trained and tested”.

But he added that the two-week period in which overseas drivers were permitted to work for hire and reward was an area of concern.

“During the consultation on the new plans, Logistics UK asked that the period of cabotage be for seven, not 14, days,” he said.

“By allowing non-UK hauliers to work in the UK for 14 days, the drivers’ legally mandated weekly rest will need to be taken in the UK.

“This will increase pressure on the existing allocation of HGV parking spaces, which the government itself assesses as being at least 1,400 spaces short, and will lead to more drivers being forced to sleep overnight on the sides of roads or in insecure locations.”

Toby Ovens, the managing director of 45-vehicle Broughton Transport Solutions in Wiltshire, told Transport Operator last month: “Personally, I think it is ridiculous. I suspect that the government has listened to big business leaders who have exploited cheap haulage in the past.

“It’s baffling: the government have said the solution to the driver shortage is to pay higher wages, and now they are letting in low-cost haulage. How are we supposed to increase wages, and compete against low-wage, low-cost operations from abroad?

“There’s also a safety issue. We are required to inspect our vehicles every six weeks, and ours are brake-tested at every inspection, but no one knows when the foreign vehicles were last inspected. Unless they are pulled over at the dockside, it’s unlikely they will be stopped or examined in the UK.”

Mr Ovens is not alone in opposing the cabotage changes; of 150 respondents to the online consultation survey, 108 were against, DfT said. The main reasons stated were unfair competition for UK-based hauliers (75 of those responses); fear that recent improvements to driver pay and conditions in the UK would be rolled back as a result (40 responses); and road safety concerns (17 responses) citing differing vehicle testing and driver training standards and drivers’ hours adherence in parts of Europe.

The department acknowledged concern around undercutting, undermining of driver pay improvements and inconsistency with promoting home-grown recruitment.

But it said: “Analysis indicates there is likely to continue to be an acute driver shortage for at least the next six months and hence limitations on transport volumes due to driver capacity.

“It is unlikely that this intervention alone (involving temporary capacity in the order of one per cent of total volumes or less than 10 per cent of the size of the acute driver shortage) will depress driver earnings or haulage rates.”

It admitted: “The intervention will lead inevitably to transfers of some work from UK operators to cabotage operations and hence changes to rates cited in commercial negotiations.”

25 per cent of online respondents stated support for the measures, predominantly citing the necessity of the move in order to ease current supply chain pressure. One large haulier “emphasised that this should be a temporary measure… while other measures are given time to take effect, such as driver training and testing,” said DfT.

Justifying its decision to go ahead with the relaxations despite industry opposition, DfT highlighted the severe impact of the driver shortfall on the supply chain, adding that it would take “some months before the UK resident workforce can be grown sufficiently to rectify the shortage.

“The underlying fact of problems affecting supply chains has not been challenged significantly by the responses to the consultation.” It added that there was “some evidence” provided in consultation responses of interest in using the extensions, both by UK and international businesses.

“The Department has also had indications in confidence and indirectly that some significant logistics operations and very large customers consider they will use the extensions,” it said. “The indication is that the capacity is needed to move deliveries that otherwise would not be made into the UK or transported within it.

“Some imports are reported to not be reaching the UK because of constraints in port to inland distribution centre movements…

“Trunking and port to hub operations are likely areas of particular use.”

Broughton Transport Solutions’ Toby Ovens argues that the solution to the shortage of freight capacity is largely in the government’s hands.

“I don’t want my business to get any bigger, but the government could instruct the traffic commissioners to grant O-licences for more vehicles to operators that wished to grow on a temporary basis to get over the shortage… rather than encouraging un-regulated foreign hauliers.

“There’s also the situation at DVLA, where an unknown number of LGV licences and licence applications are being held in limbo. Why doesn’t the government sort that out?

“I have a waiting list of potential drivers, and I think three or four of them are currently unable to drive because their licences are held at DVLA. That’s in the hands of government.” He added: “I’ve been interviewed twice on this by the BBC, and each time I’ve given what’s going on at DVLA as the main reason for the driver shortage. Each time, this has not been reported, although other things I have said have been.

“The third time I was contacted by the BBC, I turned them down. There’s no point in me speaking to them if they won’t report what I say accurately, and I told them so.”

Mr Ovens encourages his fellow hauliers to be bold: “Now is the time to get rate increases. This is the best opportunity I can remember. Previously, if you asked for a 10 per cent rate increase, you would be laughed at. Now you will get it.” He warned that increasing costs meant that rates must be adjusted upwards. “I don’t have a problem getting drivers, but then I’m paying £175 a night. I’ve increased my charged rates by 15 per cent over the last two months, and I’m turning work away until Christmas.”

He continued: “Aside from cabotage, I have two worries. One is that in the inevitable quiet period after Christmas some hauliers will bow to pressure to cut rates. The other is increasing cost.

“My average fuel bills have increased from between £32,000 and £34,000 a week to £42,000 – £44,000. And vehicles are getting more expensive.”

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