Sharp ■ Informed ■ Challenging
25.4.22
Introducing Scania go BABY DRIVERS: Felixstowe-based VKVP Haulage has taken a truck to a local school to encourage pupils to consider a career in the transport and logistics sector. The visit to Langer Primary allowed youngsters to get up close to an HGV. Operations director Mark Bennett said: “Some students might fancy a life behind the wheel, but other roles such as planners, IT and compliance specialists, warehouse staff, administrators, accountants or technicians might be more appealing.” The latest ONS research revealed that at the end of 2021, the number of HGV delivery drivers remained 39,000 below the pre-pandemic level of 301,000.
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Strike action likely over JCB parts contract, but pay hikes for Tradeteam and Supply Chain staff
Mixed fortunes for DHL drivers
By Chris Tindall
DHL drivers working on the JCB parts contract voted 95% in favour of strike action after their union accused the company of implementing a real-terms pay cut. The workers, who deliver JCB parts between factories across the UK, are now set for a full ballot at the end of the month. The GMB union said DHL was trying to impose a 5% pay award, despite inflation running at more than 8%. Stuart Harrison, GMB organiser, said: “This result sends a clear message to both JCB and DHL; drivers have had enough with not being listened to. We face a crushing cost-of-living crisis – they deserve more than a pay cut. GMB will now move to a formal industrial action ballot.” DHL Supply Chain said it was disappointed with the union’s action: “We look forward to further talks to reach a satisfactory outcome for both parties, but
contingency plans are being drawn up and every effort will be made to minimise disruption to services, should the industrial action go ahead,” said a spokeswoman. However, some DHL drivers in England and Scotland are celebrating after negotiating significant pay deals with their employer. More than 100 HGV drivers working for DHL Tradeteam in Burton-on-Trent voted in favour of an improved pay offer, worth
up to £6,000 a year and including a pay increase worth 7.5%, which typically raises pay by £2,750 according to the Unite union. It said the negotiated deal also means drivers now have the right to refuse any route that takes more than 11.5 hours, including rest time and breaks. Those accepting longer routes will receive a new premium rate, which will see many drivers earn up to £3,000 per year without having to work extra hours, based
on their annualised hours contract. Meanwhile, DHL Supply Chain in Aberdeen has agreed a 13% pay increase over two years for around 30 drivers. The deal also means DHL Aberdeen will recognise Unite for collective bargaining and negotiation in the future.
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Cygnia purchase and new business wins prompt bullish profit forecast
Wincanton cheers contract triumphs By Carol Millett
Wincanton’s group revenue is forecast to rise significantly in Q4, helped by a slew of new retail and public sector contracts and the acquisition of e-commerce specialist Cygnia last year. In a trading update, Wincanton reported “excellent” growth in all its markets, predicting a 12% increase in revenue in the fourth quarter compared with the same period last year. Group highlights include a 56% leap in full-year revenue for its fulfilment business, aided by the purchase of Cygnia, which accounted for a 15% revenue boost
and has delivered “a healthy pipeline of prospects”. The firm’s public and industrial division is expecting an 18% rise in revenue for the full year to 31 March 2022, the group said.
Key wins in the period include a contract to run a new DEFRA site within the Sevington Inland Border Facility and a deal to process and store PPE on behalf of the government. This involves sourcing 330,000sq ft of storage via the company’s shared warehousing platform, OneVAST warehouse. Wincanton reported that its two retail sectors – grocery and consumer and general merchandise – were also performing well, with revenue expected to grow year-on-year by a combined 17%, aided by the Primark contract that it won in November last year.
Unipart Logistics seals NHS deal NHS Supply Chain has signed a lease for a new purpose-built regional distribution centre (RDC) in Widnes, which will be operated by its logistics partner Unipart Logistics. The new site will be known as NHS Supply Chain Gorsey Point and is set to replace the existing Runcorn site currently operated by Unipart Logistics, after the lease expires at the end of March 2023. NHS Supply Chain said the new site’s increased capacity, which is equivalent to six professional-sized football pitches, will better meet the future needs of the network and allow it to accommodate a broader range of products. The site has over 60,000 pallet spaces, giving the network the ability to hold increased levels of stock and provide enhanced supply chain resilience. This added capacity will also allow the network to respond better to changes in demand, NHS Supply Chain said.
Online surge fuels rapid rollout of depots, but logistics pay still lags Transport and logistics is leading the way in terms of the number of new business premises opening up, thanks to the boom in postal and courier services. Data from the Office for National Statistics showed the sector has expanded faster than any other industry.
The number of premises for transport firms has grown 88% since 2011 – and 21% since 2019 despite the chaos caused by Brexit and Covid. Rugby had the highest share of business units used for transport and storage in 2021 (17%). Newport (10%), North Lanarkshire (8%) and Antrim and
Newtownabbey (8%) were top in Wales, Scotland and Northern Ireland. However, hourly earnings are still below the national average and full-time HGV drivers, couriers and warehouse staff work nearly 42 hours a week, compared with a UK average of almost 39 hours.
Government hands out research funding to 51 transport projects A lightweight steering system for HGVs that reduces tyre wear and carbon emissions is one of 51 projects awarded government research funding. The transport research and innovation grant (TRIG) programme has given grants worth £1.95m to entrepreneurs and innovators who are pioneering
25.4.22
new ways of making transport safer and more efficient. Winners were selected based on four key themes: future of freight; maritime decarbonisation; Covid recovery/transport resilience; and an ‘open call’ where any transport related idea was considered. The University of Cambridge will receive a share of the funding for development of its new low-cost and lightweight steering system, which also makes it easier for larger vehicles to manoeuvre. n The government has also pledged £20m to improve roadside facilities, as part of attempts to boost driver welfare and tackle the driver shortage.
Clipper shareholders back GXO takeover Clipper Logistics shareholders have voted overwhelmingly in favour of the £965m proposed acquisition by GXO Logistics. The sale was revealed in February, when both parties announced they had reached agreement on a recommended cash and share offer to be made by GXO for the entire share capital of Clipper. Just over 92% of
Clipper shareholders have now voted in favour of the move. The acquisition has yet to meet the approval of the Competition and Markets Authority in the UK and the Office of Competition and Consumer Protection in Poland, although the companies stated that they “remain confident completion will occur in the summer of 2022”. MotorTransport 3
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Prologis plans West Midlands hub Property developer Prologis has been granted planning permission for a new logistics facility on its industrial estate in Minworth, West Midlands. The plans include the demolition of an obsolete unit on the Prologis Park Midpoint and the construction of a 163,000sq ft building rated BREEAM ‘excellent’ and net-zero carbon in construc-
tion, offering logistics space to the West Midlands market. James Hemstock, Prologis UK director, said: “We’re expecting to complete the building early 2023 and have already had significant interest from potential customers.” n Glencar has landed a contract to construct 155,000sq ft of industrial and distribution space in Croydon, opening in early 2023.
Delaney to head TPN growth
ParcelHero says return of UK manufacturing will boost logistics sector
Shorter supply chains on the way, firms told
Delivery specialist ParcelHero has warned that manufacturers, retailers and their delivery and logistics partners need to plan for a growing trend to return manufacturing to the UK – known as ‘reshoring’ – as global supply chains break apart. The company pointed to a recent Office for National Statistics stock and supply chain report, which stated: “The EU exit, the pandemic, higher energy and commodity prices, and events such as the blockage of the Suez Canal, have presented businesses with significant challenges when acquiring and maintaining their stock. “As a result, the UK has experi-
Photo: Shutterstock
By Carol Millett
enced increased business uncertainty, supply chain issues across a variety of materials and products arising from worldwide shortages, and rising inflation.” David Jinks, ParcelHero’s head of consumer research, said UK manufacturing might be on the verge of a renaissance in response
The Pallet Network (TPN) has appointed Bob Delaney (pictured) as its new director of network development. A former employee of both Palletforce and Palletways, Delaney has spent his entire career in logistics and the past 20 years in pallet networks. He said: “TPN is a wellestablished and extremely good network. MD Mark Kendall has created a fresh and new senior management team to enact his vision for the network and being part of that was very attractive.” Kendall said he was aware Delaney would have been welcomed anywhere in the sector, adding: “It is a testament to TPN’s leading position and huge future potential that he chose us.”
to these challenges, pointing to a number of companies including manufacturer Albert Jagger Engineering, Ted Baker and Boohoo, which are all reshoring manufacturing to varying degrees. He argued that returning manufacturing to the UK has the advantage of reducing products’ carbon footprint, reducing lead times and delivery costs and ensuring quality by continued monitoring rather than relying on samples. He also pointed to a report from trade body Made UK, which found that 40% of reshoring is returning from China, over 30% from Eastern Europe and almost 20% from India.
unite in Big fine for haulier after fatal fall Agencies stowaway blitz
4 MotorTransport
for an overhead crane at the company premises in Gateshead. While undertaking the work, he fell approximately 1.5m from the rear of the container. An investigation into the incident by the Health and Safety Executive found that the company had not put in place control measures to prevent or mitigate a fall from the rear of the container. It also failed to carry out a suitable or sufficient risk assessment for this specific work activity.
A crackdown on organised immigration crime has seen Cheshire Police check 148 lorries at service stations across the county over the past three months. The operation resulted in one Iranian stowaway being found and £11,200 in outstanding civil penalty fines being recovered from hauliers previously found to have migrants hiding in their vehicles. Another 96 fixed penalties were issued for various offences, totalling £18,750 in fines. Cheshire Constabulary said the operation, which involved police, Border Force, Immigration, the
Photo: Shutterstock
A north-east haulage firm has been fined £200,000 after one of its employees fell from the rear of a shipping container while he was unloading a shipment of steel girders and died. JR Adams (Newcastle) was also ordered to pay costs of £15,322 following an appearance at Newcastle Magistrates’ Court In June 2018, Keith Robson was standing inside an open-topped shipping container on the back of an HGV trailer preparing access
Cheshire Drone Unit, the DVSA and local authorities, was “aimed to disrupt a crime which puts vulnerable people at risk of exploitation and harm by using dangerous routes into or out of the UK”. The operation involved searches at Burtonwood services on the M62 and Lymm services on the M6. Lorry drivers were given advice on how to avoid becoming victim to gangs making money from the illegal movement of vulnerable people by securing their vehicles. The DVSA also checked drivers’ hours and vehicle roadworthiness.
25.4.22
Road Transport Expo
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Seminar programme to include sessions on compliance, urban logistics and decarbonisation
Speakers line up for RTX An exciting array of top industry speakers has been revealed for the conference programme at the inaugural Road Transport Expo (RTX). The show runs from Thursday 30 June to Saturday 2 July and includes a series of highly topical seminars and workshops based around our key zones. The programme will be run over two separate stages and provide the very latest insight, debate, support and information you need to run your business. Full details of Stage One appear below...
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30 JUNE - 2 JULY NAEC STONELEIGH I WARWICKSHIRE
RTX SEMINAR PROGRAMME STAGE ONE: KNOWLEDGE HUB Thursday 30 June 2022
SESSION 1: POLICY & COMPLIANCE
Leading industry figures discuss the latest compliance and regulatory updates. Chaired by Motor Transport editor Steve Hobson. 10.30-10.50am Loveday Ryder, chief executive, DVSA The DVSA outlines its key enforcement, testing and licensing priorities for the year ahead. 10.50-11.10am Kevin Rooney, Traffic Commissioner for the West of England Details of the latest O-licensing and fleet compliance issues.
1.00-1.15pm Catherine Bowen, senior policy advisor, BVRLA Details of city rollout plans for clean air and zero emission zones. 1.15-1.30pm Steve Gooding, director, RAC Foundation What are the implications of pay-per-mile charging? 1.30-1.45pm Colin Ferguson, CEO and founder of The Algorithm People How The Algorithm People and Teesside University are working on dynamic vehicle-to-vehicle optimisation that could transform final-mile deliveries and eliminate routine back-to-base reloading.
11.10-11.25am Rod McKenzie, MD of policy and public affairs, Road Haulage Association The priorities for the year ahead.
1.45-2.00pm Q&A: Your chance to put your questions to a panel of experts.
11.25-11.40am James Firth, head of road freight regulation, Logistics UK An outline of forward strategy.
Discover the latest hotspots for freight crime, understand policing strategy for safer HGV movements, and explore the right compliance framework. Chaired by Motor Transport editor Steve Hobson
11.40-11.55am Jonathon Backhouse, director, Backhouse Jones What are operators and transport managers required to do to prevent bridge strikes? 11.55am-12:10pm Q&A: Your chance to put your questions to a panel of experts.
SESSION 2: URBAN LOGISTICS
Session focused on policy and technology aimed at urban logistics operators. Chaired by Motor Transport editor Steve Hobson 6 MotorTransport
SESSION 3: LAW & ORDER
2.20-2.35pm Mike Dawber, field intelligence officer – freight desk, National Vehicle Crime Intelligence Service 2.35-2.50pm Metropolitan Police Inspector Richard Wenham, commercial vehicle unit, roads & transport policing command 2.50-3.05pm Phil Breen, Earned Recognition national account manager, DVSA
3.05-3.20pm David Somers, MD, Road Skills Online 3.20-3.30pm Q&A: Your chance to put your questions to a panel of experts. Friday 1 July 2022
SESSION 1: DRIVING CHANGE
How successful have efforts been to ease the driver shortage? 10.30-10.45am Sally Gilson, RHA The skills and training challenge. 10.45-11.00am Kieran Smith, CEO, Driver Require Latest driver statistics and research. 11.00-11.15am Mark Currie, chief executive, Mantra Learning Exploring the success of the government Skills Bootcamps.
Zemo Partnership News on the latest low- and zero-emission vehicle trials and wider progress on the decarbonisation transition in commercial transport. 12.45-1.00pm Scania UK Scania explores renewable fuels options and looks at the future pathway to decarbonising HGVs. 1.00-1.15pm Kevin Buck, MD, HazComp Exploring the potential of the 25.25m-long, 60-tonne GCW road train over seven, eight or nine axles. 1.15-1.30pm John Comer, head of product management, Volvo Trucks UK and Ireland Practical considerations for long-haul operators with battery electric vehicles.
11.15-11.30am Speaker to be confirmed Operator case study
1.30-1.45pm David Thackray, marketing director, Tevva Electric and Hydrogen Trucks The role of hydrogen fuel cells as range extenders for battery electric freight vehicles.
11.30-11.45am Q&A: Your chance to put your questions to a panel of experts.
1.45-2.00pm Q&A: Your chance to put your questions to a panel of experts.
SESSION 2: HGV DECARBONISATION
SESSION 3: AGENCY SPOTLIGHT
12.30-12.45pm Andy Eastlake, chief executive,
2.30-3.15pm: Panel discussion
The work taking place to help HGV operators decarbonise their fleet movements ahead of the government's 2040 target to stop the sale of all diesel trucks.
What should best practice look like, how will IR35 affect your use of agency drivers, and should the driver hire sector be regulated further?
25.4.22
Business barometer
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Costs are increasingly fluid and fluids are increasingly costly, as economic volatility takes its toll
Volatile is the new normal
Manufacturing confidence
UK manufacturers’ optimism about business growth hit a 13-month low in March, according to the latest Purchasing Managers’ Index (PMI) published by S&P Global/Chartered Institute of Procurement & Supply. This monthly survey evaluates manufacturers’ sentiment about key issues such as output, orders and employment, aggregating them into a single PMI figure (see chart). March’s low score is blamed on a slowdown in output growth, 8 MotorTransport
rising input costs and order intake rising more slowly, especially for exports hit by Brexit customs delays. After the chancellor’s Spring Statement last month, the Office for Budget Responsibility (OBR) slashed its forecast for GDP growth this year. Last October the OBR was anticipating 6.0%, but now expects only 3.8%. This reflects the latest prospects for inflation: the OBR reckons CPI inflation will climb to a 40-year high of 8.7% in Q4, and will average 7.4% for the year as a whole. But earnings growth is likely to be lower (5.3%) and National Insurance contributions rose this month, so living standards are falling. This dampens consumer demand and reins back GDP growth, according to the OBR.
Sterling
The pain of the rocketing oil price has been compounded by the pound’s diminishing value against the dollar. This nine-month downward trend accelerated last month: indeed, the pound’s average value of $1.317 in March is the lowest for 16 months. A prime reason is currency traders’ expectations for interest rates and economic growth. In January, most expected the bank rate to rise rapidly, maybe to around 2.0% by the year-end, so sterling rose as traders bought into the currency, hoping to benefit from rising interest rate earnings and UK economic growth. True, the bank rate rose to 0.75% in March and may go to 1.0% at the next rate decision on 5 May. But now analysts believe the rate is likely to pause there for the rest of the year because further hikes to control inflation would hurt an economy already reeling from skyhigh energy costs. But the US Federal Reserve is expected to raise its bank rate further and faster than the UK, so currency traders are now buying dollars. Coupled with the recent downward revision of UK growth forecasts, this move triggered March’s sharp dip in the pound/ dollar rate.
Truck registrations
Registrations of new heavy trucks (16 tonnes GVW and over) have picked up in the first two months
BRENT CRUDE OIL PRICE 140 120 100 80
$/barrel
Russia is the world’s second-largest exporter of oil (behind Saudia Arabia), so when multiple countries shun Russia’s output, the effect on the oil price is swift and impactful. Our graph shows Brent crude’s monthly average prices, smoothing spikes like the $130/barrel peak on 8 March. Nevertheless, March’s average price of $116 is the highest monthly figure for 10 years. For many operators, the typical average bulk diesel price in March was 140-146ppl – an all-time high. Perhaps the first load in March was around 125ppl, but the next one would have been closer to 155p. The scale of this hike overshadowed the chancellor’s 5p/litre cut in fuel duty. The cut from 57.95p to 52.95ppl is only until 23 March next year. And additional costs follow the move, from 1 April, which ends the legitimate use of red diesel (with a current duty rate of 9.78ppl) in forklifts or fridge plants, for example. Meanwhile, high gas prices have driven up the cost of AdBlue too. The UK aims to end all imports of Russian oil by the end of the year: the EU has pencilled-in the end of the decade. So will oil climb further as the Russian tap is tightened? A US plan to release oil stocks and ramp up its own production saw the Brent price soften to around $107 in early April. Opec has offered only a modest production increase. The latest forecasts for Brent in the second half of the year range from $100 to $120.
60 40 20 0 Aug
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MANUFACTURING CONFIDENCE 61 60
Purchasing Managers' Index
Oil and fuel
59 58 57 56 55 54 53 52 Jul
Aug
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Dec '21 Jan '22
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£/$ EXCHANGE RATE
$
1.39 1.38 1.37 1.36 1.35 1.34 1.33 1.32 1.31 1.30 1.29 1.28 Aug
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of this year, according to provisional data collated by the European vehicle manufacturers association ACEA. The numbers across Europe as a whole are up by about 4% on last year. Although below the pre-Covid peak seen in 2019, they are tracking close to their usual levels at this point in the year.
Nov
Dec´21 Jan´22
Feb
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The bounce-back in the UK (estimated at 9.5%) looks particularly strong, but this is partly because UK registrations had slipped more than most early last year. One stand-out figure in the ACEA data is that for Sweden, where registrations in the first two months are 24% down. This is attributed to component shortages. 25.4.22
Viewpoint
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Testing logjam needs fixing A fter handing the government plaudits last year for listening and acting on its call to action on HGV driver training and testing, the training sector is once again hurling brickbats at the DVSA and DfT. Steve Hobson In a letter sent to the Logistics Skills Editor Network by DVSA CEO Loveday Ryder in Motor February, she pledged a 90% increase in Transport practical tests, but analysis of the DVSA’s own stats by the LSN has shown the real figure is more like a 30% increase – nowhere near enough to cope with demand or deal with the driver shortage. The LSN wants the government to allow training providers to carry out more testing of HGV drivers and to give the DVSA better funding to employ more examiners. While the DVSA says it has recruited an extra 22 examiners – and it has more capacity since the government scrapped B+E testing for
car drivers wanting to tow trailers or caravans – the LSN worries that more DVSA examiners are leaving than joining. A salary of under £30,000 is no longer attractive when experienced examiners can earn more either carrying out HGV driving tests for operators, or even going back to driving. Unless the DfT finds a way to break the testing logjam and get capacity to well over the current 120,000 a year, then all the efforts of the transport industry, now supported by the Department for Education’s £34m Skills Bootcamps, to recruit and train more drivers will go to waste. No one – least of all PM Boris Johnson – wants to see a return to queues at forecourts and empty supermarket shelves due to HGV driver shortages, so action is needed quickly to get testing back on the road.
Time to cast the net wider on skills T James Clifford CEO, HGVC
he average age of an HGV driver is currently around 50, raising a significant skills gap issue as more drivers retire. Moreover, just 1% are women and 4% are from ethnically diverse backgrounds. If the industry is to address this problem, it’s crucial to attract a more diverse range of drivers. But training is expensive, putting the career out of reach for many, especially younger people. In December, the Department for Education launched Skills Bootcamps in HGV Driving, which provide funding for 11,000 candidates. The scheme has been a success and there’s a compelling argument for the DfE to continue to provide funding. Another barrier has been the absence of a clear career development path for drivers. Essentially, once you’re a truck driver, that’s the end of your career progression. However, industry and government could work together to help improve training and career prospects within HGV driving and promote it as the skilled profession it is. With many companies stating that training and upskilling are important to driver retention, one solution could be to review the courses that contribute to the Driver CPC. These courses are often seen as irrelevant, repetitive, stale and costly. This is a missed opportunity for the industry. These courses could be structured, categorised and modular
10 MotorTransport
so that drivers could choose where they would like their focus to be, and take courses that build upon one another in a cohesive manner. This would lead to experts in a particular field and, in time, clear career progression. The industry also has an image problem. This is in part down to things such as pay and working conditions, although these have notably improved recently. But on top of this, there’s also a stereotype of an HGV driver that we need to challenge. We should all do our best to foster and celebrate diversity within the industry. The Driver Academy Group, the consortium led by HGVC to run bootcamps, has received 7% of applications from women. We also received 24% of total applications from black, Asian and other ethnic minorities and some 30% of applications are from those under the age of 36. This is a fantastic first step. But we must now retain this diverse pool of drivers throughout their careers and keep encouraging those from underrepresented groups to consider a career as an HGV driver.
The newspaper for transport operators
To contact us: Tel: 020 8912 +4 digits or email: name.surname@roadtransport.com Editor Steve Hobson 2161 Head of content Tim Wallace2158 Events and projects editor Hayley Pink 2165 Group production manager Isabel Burton Layout & copy editor Nick Shepherd Senior display sales executive Barnaby Goodman-Smith 2128 Event sales Tim George 0755 7677758 Classified and recruitment advertising rtmclassified@roadtransport.com Sales director Emma Rowland 07780 604075 Divisional director Vic Bunby 2121 MT Awards Katy Matthews 2152 Managing director Andy Salter 2171 Editorial office Road Transport Media, First Floor, Chancery House, St Nicholas Way, Sutton, Surrey SM1 1JB 020 8912 2170 Free copies MT is available free to specified licensed operators under the publisher’s terms of control. For details, email mtsccqueries@roadtransport.com, or call 01772 426705 Subscriptions Email:customercare@dvvsubs.com Quadrant Subscription Services, Rockwood House, Perrymount Road, Haywards Heath, West Sussex RH16 3DH Rates UK £146/year.Cheques made payable to Motor Transport. Apply online at mtssubs.com Registered at the Post Office as a newspaper Published by DVV Media International Ltd ©2022 DVV Media International Ltd ISSN 0027-206 X
Got something to say?
If you would like to contribute to MT’s Viewpoint, email steve.hobson@roadtransport.com 25.4.22
Gas power
W
e know that the once-certain world of road transport – the one in which you could have any vehicle you liked as long as it was diesel-powered – is not going to be with us for much longer. The stay of execution for internal combustion engines powered by greenhouse gas-emitting petrol and diesel fuel is longer than it is for new cars and vans, which will be banished from showrooms from 2030, but even for heavier vehicles it will be 2035 when change begins and 2040 when the last new diesel-fuelled truck is likely to find a UK buyer. The debate about what will replace those fuels is far from over, and in the view of many, unlikely to present us with a single-fuel answer. Between now and then, it seems reasonable to expect that demand for road transport will continue to grow, and hauliers may increasingly be expected to find lesser polluting, lower-cost alternatives to diesel while longer-term replacements are under development. One of these is natural gas, the stuff we use for cooking and heating our homes. The fuel has been around for many years: MT MT’s sister magazine Commercial Motor carried out a head-to-head comparison of two Perkins Eagle Tx-powered ERF EC12s back in December 1996, for example, one being diesel-fuelled and the other using compressed natural gas. It concluded then that in terms of fuel consumption, there was little to choose between the two, while the gas-powered vehicle had a clear emissions advantage. Clearly a great deal of development has taken place since. Just the same, natural gas engines still have an emissions advantage when it comes to particulates and oxides of nitrogen, the two emissions from diesels that cause local air quality issues. In terms of greenhouse gas emissions, gas is little better, and methane, the base ingredient of natural gas, is a more potent greenhouse gas than CO2 if it leaks into the atmosphere. The big gain that natural gas can offer though is when it is produced from renewable sources other than fossil fuels such as North Sea gas. Methane is emitted from rotting biomass including landfill sites, food waste, human effluent, farm slurry, and many others. Often the gas simply escapes, just adding to the greenhouse gases already in the atmosphere. If these gases are captured and processed, and can be used as a substitute for gas produced from fossil fuels, we are not adding them to the atmosphere but merely recycling them, which is better for the planet than using gas from fossil sources. If biomass is processed in an anaerobic digester, methane can be produced, captured and used as a substitute for conventional natural gas. Peter Eaton, sales and business development director at CNG Fuels, explains: 12 MotorTransport
An interim solution? While longer-term questions about replacing diesel in heavy-duty vehicles remain, natural gas offers a good short- to medium-term way of reducing your carbon emissions – as long as gas price hikes and supply constraints can be resolved. John Kendall reports
FILLING UP: John Lewis Partnership already operates well over 200 trucks on biomethane and is expanding its use of the fuel with a further 100 vehicles this year 25.4.22
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“The way it works is it’s mass-balanced, so we source our biomethane from anaerobic digestion plants from across the UK. It can be injected at one point and that is measured – how many kilograms go into the grid. We can then dispense them at a different point. “Whether it’s fossil or bio, when it’s burnt, doesn’t make a difference because it’s the same CH4 molecule. It’s all about how it’s produced, so that is why it’s approved by the DfT – it’s mass-balanced inside the grid. It saves you transporting a gas across the UK to a filling station – we just pull it up from the grid. It allows us to inject at any point, then build a station at any point and still provide people with biomethane.”
Operator experiences
So much for the green aspects, but what about hauliers’ experiences with the fuel? Firstly, in terms of the cost, fuel duty on natural gas as a road fuel is set at 22.57 pence per kg, compared with 52.95ppl for diesel. Although we are comparing weight with volume, this has meant that gas has to date attracted lower duty rates than diesel, although prices have risen since Russia’s invasion of Ukraine. The Malcolm Group has operated gas trucks for a while. “The experience was successful for us,” says Helen Ryan, head of marketing. “At the time of our
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CNG FUELS PLANS FOR EXPANSION MT met Peter Eaton of CNG Fuels at the company’s latest fuelling station, based at Avonmouth, close to the docks near Bristol and among a number of RDCs such as Amazon, Lidl, Warburtons and DHL. “They all knew that this was coming,” he says. “They bought trucks in preparation for it, so every RDC you see round here has adopted gas vehicles and they are going to convert 100% of their fleet to gas.” Eaton says the Avonmouth site is the largest of its kind in the world, being able to refuel over 500 vehicles per day. Addressing the concerns of hauliers who are put off by the lack of nationwide coverage, he reckons that CNG fuels will have around 50 CNG fuel stations in three years’ time. “This is now our ninth large-scale public access station,” says Eaton, referring to the Avonmouth site. “We have Castleford just off the M62 and A1(M) opening mid-way through this year, which is in build already. Then we’ve got Corby, Livingstone and Newton Aycliffe, which will be going into build over the next couple of months. Then from next year the operational rate that we’re aiming to get to is one station opening per month every year.” Currently CNG Fuels has 12 UK sites planned for 2023, adding to the eight already open. Among the planned sites are three stations in Scotland. “The more stations we build, the more trucks operators will convert to gas,” says Eaton. “So having this site here means that depots can change, then we build another one somewhere else and those depots can change. “I think we’ve got six or seven in the land team now, purely purchasing pieces of land across the UK in key locations. Location is so important. We only build in the centre of hubs, or as close as we can to hubs or to motorway junctions. The more convenient it is for the customer, the better.”
trials, gas pricing was low and trucks covering over 400 miles were making good savings, while also reducing carbon emissions.” The John Lewis Partnership operates 228 trucks on biomethane, with over 100 others due to join the fleet later this year. The company hopes to stop using fossil fuels across its transport fleet by 2030. “The biomethane trucks are used as a direct substitute for diesel trucks, although we focus them on the longer-distance routes where the environmental and cost benefit is greatest,” says Justin Laney, partner and general manager of central transport. So far, Laney says the John Lewis Partnership has had few issues. “Overall we’ve been very pleased with how things have gone. We’ve done many millions of miles with the gas trucks with no operational impact, but really significant carbon and cost savings. Where we have had issues, it’s mainly been related to the way gas engines run hotter than diesel engines, so we have seen some exhaust system-related defects. On the other hand, we haven’t seen the issues that arise with the highly complex fuel and exhaust aftertreatment systems on Euro-6 diesel engines, so it goes both ways.” Leyland-based HPH Transport is ➜ 14 MotorTransport 13
Gas power
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at Evri (formerly Hermes) thinks this is not helping. “It is definitely preventing many operators from making the changeover,” he states. “It involves a large capital investment for the vehicles and the fact that there may well be no filling station nearby or en route makes it very hard to justify. Any route deviation to get fuel is expensive for the carrier and can have a knock-on effect on service levels. “We have worked closely with our CNG supply partner to ensure that we have filling as close to our sites as possible, and we have built up our capability to match the filling and route distances of the trucks. I believe that this type of engagement is key to making the solution truly work. “As the network in the UK expands, it means that at Evri we can lengthen the routes that we do and we hope that the CNG providers continue to build more multi-user access sites on main trunk routes.”
Scottish supply
SECOND TIME AROUND: HPH Transport director Steve Sugden is pleased with his second batch of gas trucks, even though he admits there are some limits on where they can be deployed
now on its second round of gas trucks. Both have been Iveco 4x2 tractors and there are now seven on the fleet, as director Steve Sugden tells MT: “Overall it’s been good; although the first generation trucks had reliability issues, they were very well supported by Iveco, and that’s what then drove the replacement order. “I can work with anybody with problems if I have the support and they supported us very well. The complaints of low power on the first-generation trucks don’t exist any more with the 13-litre engine and the feeling was that the torque curve resembled that of a diesel. The feedback from the drivers is that they don’t particularly see a difference power-wise, so that ticks all those boxes. I guess it’s early days for these, but reliability does seem to be much better.” What of the downsides though? National coverage of refuelling points is patchy and David Landy, head of fleet
For Malcolm Group’s Ryan, operating gas trucks in Scotland has had its problems. “The benefits have been offset by BOC ending supply to Scotland, leaving no LNG stations and current pricing going up to three times the price per kilogramme. At this point we would not choose to run vehicles on LNG as pricing has made it unviable.” Fuel supply is not the only issue that hauliers are facing, however. HPH Transport’s CNG Ivecos are running on a contract in the north of England, with a CNG refuelling station about half a mile from one end of the trip, so the vehicles are working well on that particular job, running round the clock. “Unfortunately, I’m limited to where I can go with these trucks, for a couple of reasons,” says Sugden. “One is they’re 4x2s and anything outside this contract is generally heavier work, so that limits what I can do. Obviously, they have to be 4x2s to have the capacity for a reasonable amount of gas, so there’s a very limiting factor on where I can send them.” Pricing should rectify itself, but the problem is when that might happen. “Gas has gone up, but diesel has too – everything’s gone up at the moment. It’s a bit of a crazy situation we’re in, but we know it’s going to come back down again, so we’re not worried,” says Eaton at CNG Fuels. “We know that over a five-year lifetime of a vehicle from now, there will be a 30% to 40% saving compared with diesel. We know that. It’s what it has been for the past five years. We’re in an anomaly phase now. It will go back to normal eventually.” ■
CAUGHT OUT: Malcolm Group says its experience with LNG was initially good, but that BOC has now withdrawn its supplies to Scotland while the price of the fuel has risen substantially
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Emissions reduction
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Evri trick in the book
Parcels carrier Evri is using all the means at its disposal to drive towards a net zero carbon emissions future, as its head of environmental, social and governance tells Steve Hobson
EVRI LITTLE HELPS: Evri runs 160 gas-powered Ivecos and suggests biomethane is a valuable route to cutting carbon emissions from heavy trucks now, rather than waiting for battery electric or hydrogen alternatives
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ancy Hobhouse joined parcels carrier Evri – then called Hermes – as head of environmental, social and governance (ESG) in May 2021 after over six years with John Lewis, latterly as senior sustainability manager. The first thing we learn on meeting for lunch in London is that she won’t eat fish. After completing her BSc in oceanography at Southampton and a master’s degree in environmental modelling and management at Kings College London, Hobhouse (pictured above) firmly believes humans should not be eating the dwindling stocks of marine life. She says her initial aim in life was to study biomechanics to develop artificial limbs but she “fell in love” with oceanography and environmental science. While at Kings she worked with the India A1 motor racing team and helped it switch to biofuels. At just 38, Hobhouse says she is one of the “oldest of the new generation of ESG professionals, which demonstrates how young the sector is”. “It wasn’t fashionable when I started out,” she recalls. “People used to laugh when I said I was going to work on the environment.” Her mission at Evri is to deliver the ambitious carbon reduction targets of the UK’s second-largest parcels delivery operator (excluding Amazon), in which private equity firm Advent acquired a majority stake in August 2020. “I came from the John Lewis Partnership, where I led sustainability for them,” says Hobhouse. “The Scania gas trucks were part of our net zero plan, but I can’t take any credit – Justin Laney [JLP fleet manager] worked very hard on them. “Before that I was at Barclays Bank for almost three years looking at environmental and social risk on credit. After that I wanted to go somewhere to feed my soul so
I went to John Lewis. Then I wanted somewhere that moves much faster in its decision-making and that was Evri. They are also really nice people who just want to get the right thing done.” One thing Evri and JLP have in common is a belief that investing in gas trucks is the right thing to do, at least in the short to medium term: Evri now has 160 gas-powered Ivecos, while JLP has bought 120 gas trucks and plans to have its entire fleet of 600 tractors running on biomethane by 2028. “I was brought in by Fash [Sawyerr, appointed chief transformation officer at Evri in October 2020] who saw that ESG within Evri needed better governance,” says Hobhouse. “Evri has always been an action-based business – if it sees a problem it just gets on and fixes it.”
Social responsibilities
Bearing in mind that Hobhouse’s remit covers social as well as environmental governance, “fixing” problems also included addressing the perception that Evri is part of the ‘gig’ economy and exploits its 18,000 self-employed ‘lifestyle’ couriers with low parcel delivery rates. “When it comes to our couriers we were the first to offer them employment rights,” she says. “Whenever we survey the couriers they are overwhelmingly against being made employees rather than remaining self-employed.” The couriers use their own vehicles – usually cars or small vans – and they will have to be brought along on Evri’s journey to net zero carbon emissions by 2035 (see box, p18), a target that is aligned with the British Retail Consortium’s goal for the UK retail sector to be net zero on its Scope 1 emissions (including transport fuel) by that date. “We are now building the roadmap of how we ➜ 18
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Emissions reduction EVRI COURIER ARMY NEEDS TO JOIN THE GREEN REVOLUTION While Evri trunks parcels from the hubs to its local depots mainly on its own truck fleet, the final mile is done by a small army of self-employed couriers using their own vehicles. Getting them to switch to zero-emissions vehicles to achieve the net-zero target will not be easy. As a resident of south London, Hobhouse’s ambition to get her own electric car has been thwarted by an inability to charge it at home, so she understands the problems – on top of the price tag – of going electric. She has measured the carbon emissions from the trunking and courier fleets and now knows the scale of the challenge. “The courier fleet emits around 100,000 tonnes of carbon per year, while the trunking and ‘middle-mile’ fleet emits around 70,000 tonnes per year,” she says. “The courier emissions are more complicated as we don’t have control over them. “We have now built in a way to non-invasively track the carbon coming from each courier as we understand what cars they have and can now incentivise them to move to an EV future.” The tracking is done via a new mobile phone courier ‘community’ app, which also enables Evri to communicate better and has proved popular and useful among the couriers. “Part of it is that they declare their car to us and we know their mileage from the app so we have a lot more data,” Hobhouse says. “We are also learning what they want to do because at the end of the day it is their car and their decision. We are working on a lot of different ideas about what we think we can do that will not leave them out of pocket. That is key for us – we have to balance the ‘e’ [environment] and the ‘s’ [social] on this. “We can’t just say ‘everyone needs an EV and it’s going to cost you £30,000 more’ – that is not okay. So we are working through how this can be cost-neutral for our couriers, which might be matched funding on a leased EV or an electric car club, for example. We are talking to the GMB union on this and it’s going to be a slower process than our own operations – but we will get there.”
are going to get there,” Hobhouse says. “The most complicated bit is the transport. We had 12 of the top manufacturers come in recently to present their plans for low- or no-carbon vehicles. That will enable us to say ‘we need to go methane at this point and EV [electric vehicles] at this point’. But it is a bit of voodoo magic at the moment, trying to predict the future of low-carbon transport in terms of which technology will work when. “Luckily we have the amazing Dave Landy [Evri head of fleet] helping me work it out.”
Biomethane solution
Like JLP, Evri sees biomethane as a valuable route to cutting carbon emissions from heavy trucks now, rather than waiting for battery electric or hydrogen to ride to the rescue at some point in the future. “It isn’t zero emissions but we regard it as a stepping stone – an important one that is overlooked by the government,” Hobhouse says. “Especially if you look at it well-to-wheel – we use slurry sludge biomethane, which is almost carbonpositive. It’s not perfect or the final answer, but for us it is an important step towards zero carbon.” Evri buys its biomethane from CNG Fuels, which by coincidence also supplies JLP. The carrier has also just started a trial with HVO biodiesel. “That is exciting for us because it will fill in areas like Scotland where the CNG Fuels network is not there yet,” says Hobhouse. “We have around 250 large vehicles and 40% of those are now running on bio-CNG. HVO comes with its own problems and that is mainly the supply, because everyone wants it. “I can’t see why we wouldn’t be able to get 100% bioCNG 18 MotorTransport
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or HVO on our fleet and we will have to work with our suppliers of subcontract transport that we use at peak.” But biofuels are just a stepping stone to EVs and on this score, like many operators, Hobhouse sees the lack of recharging infrastructure rather than vehicle price, range or payload as the main barrier to mass adoption. “We have committed to trialling an EV this year,” she says. “We don’t know yet what the level of EVs will be when. What the manufacturer has said in terms of range and what will happen in real life, we still need to work through.” Evri is open to reviewing its long-haul operations in terms of the size of trailer and routes to accommodate EVs, which are unlikely to be able to haul a fully laden double-deck trailer 300 miles anytime soon. “We are not at that stage yet, but we are working it through and we will get there,” says Hobhouse. “It’s like a jigsaw.” So does she believe it will be possible to phase out internal combustion engines by 2035 – even those running on renewable fuels? “It is hard to predict,” she says. “2035 is a bit less than 15 years away and the LED light bulb was only invented 15 years ago. If we have the technology we have now my answer is probably ‘no’, but we may have flying cars by then – who knows? “We just need to embrace the innovation that is going to come through – fast. The government has set some targets and the manufacturers will be racing to keep up with them.”
Battery swaps
Hobhouse has her own theory on how heavy EVs can be made to run further without en route fast-charging, which would require serious investment in the electricity infrastructure along the UK’s trunk roads. “What I really want to see are swappable batteries,” she says. “No one’s doing it yet. I ask every manufacturer if you can take the batteries out and swap them and the answer is always ‘no’. I can’t see why you wouldn’t have a point where you go in for a battery swap so you don’t have to worry about charging. Maybe that’s my simplistic mind.” Hydrogen remains the great enigma in the future of long-haul road transport; while several truck manufacturers and energy suppliers are working hard to develop hydrogen vehicles and a refuelling network, there remain several obstacles to its widespread adoption. But if the government decides to replace methane with renewable hydrogen in the UK national gas grid as a way to decarbonise heating for buildings, then it would make a lot of sense for trucks to tap into it. This isn’t as far-fetched as it sounds – readers around in 1965 will remember the national switch from town gas to North Sea gas, a 10-year process that saw the boilers and cookers in 13.5 million domestic and 650,000 business premises manually converted to run on natural gas (methane). “I think heating will go to hydrogen,” says Hobhouse. “There is nothing really new. Milk floats have been electric for years.” Moving from Scope 1, which includes vehicle tailpipe emissions, to Scope 3, which also covers the carbon embedded in all leased or purchased assets, will be much harder for transport operators who have limited influence over the carbon content of the vehicles they buy or lease. “We haven’t got to that stage yet,” says Hobhouse. “It is a natural progression. That is one thing about batteries – they are generally not very good for the environment. We are in conversation with all the manufacturers and they are in conversation with their own manufacturers – this is such a tiered system. “This is something we know we have to concern ourselves with, but it is probably further down the line than the tailpipe emissions.” ■ 25.4.22