Across road, rail, ports and air, the freight sector is a vital and dynamic part of the UK economy. The sector produces £1 trillion in annual turnover contributing £124 billion in Gross Value Added to the UK economy. It is also a major employer with over 2.5 million employees, around eight per cnt of the total UK workforce.
The freight sector is vital for the simple reason that without it, the rest of the economy would grind to a halt. Our shops would stand empty, our factories lack raw materials or parts they require.
Over time UK working practices have changed so fundamentally that businesses rely more and more on deliveries arriving just in time, sometimes from nearby and sometimes from the other side of the world. This has required the freight industry to evolve to meet new demands.
The way we consume goods and services has changed too, which has presented the logistics sector with major challenges. Customers' impatience for the latest purchases is causing an increase in traffic to meet ever-escalating demand. Time and again businesses and consumers raise the bar, and the freight sector clears it.
The UK remains one of the best places in the world to do business and our decision to leave the European Union will not put that at risk. Our preparations for this new status as an independent global trading nation has caused the Government to introduce the Haulage Permits and Trailer Registration Bill in Parliament on 7 February. The Bill will give the UK the powers we need to support UK hauliers to continue operating internationally after the UK leaves the EU.
While we do not yet know what form our relationship will take, this could include some form of permitting system. The Bill gives us the flexibility we need to put in place the legal powers and frameworks to administer that system, and also introduce a trailer registration scheme which will ensure UK operators driving on the continent can comply with the requirements of those EU countries which require the registration of trailers.
My brilliant new ministerial colleague Nusrat Ghani MP has recently published the Port Connectivity Study, recognising the fundamental role our ports will play in our future as an island nation. The UK has one of the largest and most dynamic port sectors in Europe with our ports playing a fundamental role as the beating heart of the economy.
At present around 95 per cent of all goods entering and leaving Britain are moved by sea. They act as the gateway to international trade, ensuring Britain remains an outward-facing, globally trading island nation. Ensuring fast and resilient connections from ports to major cities and industrial heartlands will enhance our regional economies, improve productivity across the country and drive economic growth.
The Government’s Rail Vision, published in November, reaffirms Government’s commitment to its Rail Freight Strategy, which sets out a shared vision for how rail freight can grow and outlining potential opportunities for the industry to collaborate and innovate in order to help relieve the pressure on the road network. Rail freight offers real benefits for the environment, helps reduce congestion and is extremely important for UK businesses. The Government is committed to working with the rail freight industry to support its continued success.
In July of 2017 the Government launched a call for evidence for a new aviation strategy. In addition to a new Northwest runway at Heathrow which is the Government’s preferred scheme for providing much-needed capacity at the UK’s hub airport, it is important to remove further barriers to air freight and to help the sector in boosting UK trade and exports. More than 40 per cent of the UK’s extra-EU trade by value is transported using air freight.
In pursuit of this objective, the Government will encourage the adoption of new air freight technologies, including e-freight. We are working in collaboration with industry to identify barriers to trade and the means to overcome them. We will investigate how effective our infrastructure in the UK is for air freight. Finally we will work across Government to push these objectives and with international organisations such as IATA and the OECD.
The largest sector of the industry is road freight and there are challenges ahead - none greater than ensuring the recruitment and training of the next generation of logistics professionals. We know all areas of the sector have labour shortage challenges which is why I would like to congratulate the logistics sector in developing its Trailblazer apprenticeship standards. But that is only the start, and there is a lot more to do. It is now incumbent on the sector to use the money available through the Apprentice Levy to deliver on the next generation of logistics professionals, and on Government to find ways to support the industry's progress.
One key requirement in making this a success is raising awareness of the industry with young people at school or college. I am pleased that the Department for Transport has been working with the industry on its working group, and through it on the relaunch of Think Logistics. The Secretary of State and DfT officials were at the Skills Show 2017, and we stand ready to continue to support the industry in engaging with young people and promoting logistics as a career.
A key part of recruiting new HGV drivers is to ensure they have proper facilities available. This is about both quantity and quality. The lack of facilities has been recognised as a major barrier to the recruitment and retention of drivers. If we are to successfully address the driver shortage, it will require industry and the Government to work together to improve the standard and supply of facilities. That is what we are seeking to do.
We know that the country needs more, and better quality, overnight lorry parking. We are looking closely at how the Government can best encourage the provision of more parking. This includes putting more emphasis on how much lorry parking should be planned for service areas.
In addition, the Department has been working with the Health and Safety Executive (HSE) to review its guidance on access to facilities for visiting delivery drivers. HSE has now announced that visiting drivers must have access to welfare facilities in the premises they visit as part of their work. I believe this will be welcomed by professional drivers as a step forward in supporting their wellbeing in the workplace.
A key part of the push for greater efficiency in freight is the need to ensure that we reduce its impact on the environment. The road freight sector makes a significant contribution to UK greenhouse gas and air pollutant emissions. The Government recognises that reducing emissions from the sector will be challenging and has put in place a number of measures to support industry, including the £20m Low Emission Freight and Logistics Trial; up to £4 million for ultra-low emission HGVs through an extension of the plug-in van grant; and the £22 million Future Fuels for Flight and Freight Competition. We have also recently consulted on proposed regulatory changes to support the take-up of alternatively-fuelled light commercial vehicles.
It all makes for a very exciting future!
Posted on: April 17th 2018