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RHA campaigns: a long agenda

By the time you read this we will probably know – or have a good indication – what the Chancellor is doing about fuel duty. And I can only say that a tremendous amount of work has been done to carry forward the great campaigning successes of 2011 into this year.

Whatever happens, we must not lose sight of the fact that the RHA’s involvement and support for FairFuelUK has been a resoundingly effective political lobby, with a number of proposed increases in duty being dropped or postponed and a real reduction being achieved.

But our campaigning is not restricted to fuel duty – important thought that undoubtedly is. In fact, the RHA has a very long list of issues that are being tackled and we are making progress on most fronts. Space does not allow me to mention everything, nor to give full details of the topics that are referred to. Members are kept up-to-date on progress in a variety of ways, including our on-going programmes of members’ meetings around the country, e-newsletters from both the regions and Weybridge and, of course, ROADWAY. I urge all members to read as much of this as possible, so you are kept in the know. In no particular order, here are some of the things we are dealing with, together with a short note of the current situation:

On lorry charging we are supporting the latest proposals: indeed, we would like to see them brought in sooner rather than later. We know this does not fully resolve the ‘level playing field’ but it is a step in the right direction.

In London, we are working with Transport for London (TfL) to ensure that members’ interests are taken fully into account in planning for the Olympics and we believe that everything possible is being done to tackle the obvious challenges we will face during the coming summer.

We are also working with TfL to address the real difficulties that arise from trucks sharing congested streets with cyclists. The tragic loss of life that can occur seriously affects everyone involved, and we hope that all interested parties will work together to find effective ways forward.

Also in London, we are considering if and how the FORS scheme might be developed, without simply adding to the administrative burden that all hauliers face.

Another problem being addressed is the wide-ranging area of driver skills, training and recruitment. This is a longer term issue in some respects, as the fact that many more drivers are leaving the industry than are passing LGV tests will not have an immediate impact on members, but when economic growth returns, there is every chance that recruitment will not be simply a matter of waiting for drivers to come knocking on your door.

Finally, there are two issues in the recovery industry that are being tackled: hard shoulder safety and statutory fees. Neither is going to be resolved overnight, but we will make sure that progress is made.

Charging Heavy Goods Vehicles

The above headline is the title of a recently published consultation document in which the DfT puts forward its proposals to impose new charges on all heavy goods vehicles in excess of 12 tonnes GVW. It is a key part of the government’s commitment to take steps to level the playing field between UK and non-UK hauliers and is therefore welcome.

The charges will be graduated according to the existing bands for Vehicle Excise Duty (VED) purposes, ranging from £85 to a vehicle in band A to £1,000 for vehicles in band G (these are typically 2+3, maximum weight artics). The rate for a 3+3, six-axle artic will be £640.

Most importantly, the consultation document spells out the government’s commitment to ensure that any HGV user charge imposes no additional cost overall for the greatest possible number of UK road transport operators. In doing so, they have to work within the legal framework imposed by European Union (EU) rules. The proposal suggests that in introducing the new charges for all trucks over 12 tonnes GVW, the current rates of VED for UK trucks will be reduced to at, or just above, the minimum levels dictated by the EU. By linking the new charge to the existing system of VED, it will minimise the administrative burden on UK operators by allowing the application and payment processes for both to be aligned.

The RHA has been concerned for some years about the impact of foreign trucks on the UK haulage industry, has repeatedly drawn government attention to the volume of foreign trucks on our roads, and has drawn both public and political attention to the fact they contribute little or nothing to the cost of providing and maintaining our road network. This unfairness has continued for far too long and the proposed new charging regime is a welcome first step. But it is no more than a first step which will impose some charges of non-UK trucks and will therefore add to the costs of our foreign competitors, while not adversely affecting our members.
In considering this proposal, we are mindful of the EU’s Transport White Paper: Roadmap to a Single European Transport Area – Towards a competitive and resource efficient transport system which proposes wide-ranging changes which could result in compatible road charging systems, harmonised EU rules and a restructuring of fuel taxes, as well as seeking the abolition of all restrictions on cabotage and improvements to the core network of principal routes across Europe. Such moves are controversial to say the least, but they are the way the European Commission is thinking.
Needless to say, the RHA is monitoring progress on these proposals very carefully and will be seeking government support if we see measures being brought forward that will disadvantage our members.

Commercial Vehicle Show 2012

2012 is going to be a big year for UK hauliers. You will be the ones who, quite literally, will be delivering the 2012 Olympics. Not just to the nation’s capital, but to all the other venues around the country which will be hosting events.

And if you’re not involved with or affected by the Olympics, life will still go on. Road haulage has always been a very accurate economic barometer for the rest of UK plc because if manufacturers are producing the goods, farmers are growing crops, retailers are selling products, or builders are constructing houses or offices, we are meeting the vast majority of their freight transport needs.

Road transport is always going to be high on everyone’s agenda and top of the list for those involved in road freight transport has to be the Commercial Vehicle Show 2012 and Workshop 2012, which will be held at Birmingham’s National Exhibition Centre from 24 – 26 April 2012.

As chief executive of one of the show’s partners – the others being the Society of Motor Manufacturers and Traders (SMMT) and the Institute of Road Transport Engineers (IRTE) – I am particularly proud of the Commercial Vehicle Show.

On that basis, I am delighted that bookings for the 2012 show have already surpassed expectation. We now have 260 exhibitors booked: that’s a 48% increase compared with this time last year and equates to 23,000m2 of exhibition space booked. Again, that’s up 43% year on last year.

This is great news for us as the only UK trade association focusing solely on road freight transport; and also for the industry on which the rest of UK plc is almost totally reliant.

However, the Road Haulage Association won’t just be at the 2012 CV Show for fun.We have a responsibility to be there, for our members in particular and for the industry as a whole. We shall be fielding a team of experts on every aspect of running a haulage business from training and tachograph analysis to fuel savings and insurance. From employment issues to technical matters, there is no area of the industry that we can’t cover.

In 2011 Transport Minister Mike Penning accepted my invitation to visit the CV Show to meet RHA members and also see the vast range of products and services supplied by the exhibitors. Such was the success of his visit that I have already invited him as my guest to this year’s show and, although I am waiting for official confirmation, I am very hopeful that he will be joining us once again.

The strength of the RHA comes from its staff and its membership. We take great pride in our ability to help and advise members on any issue or aspect of their particular operation. So please, if you come along to the show, make sure you visit us on stand 3A40. Even if it’s just to say hello, it will be great to see you.

What does OCRS mean to you?

With apologies to those who can already answer the question, please bear with me and read on.

The Vehicle and Operator Services Agency – widely known as VOSA – devised a system called Operator Compliance Risk Score (OCRS) some time ago. With the intention of using it to target their limited resources on the operators who are less likely to comply with the various rules and regulations that apply to road haulage, the system has been refined since its introduction and now includes 10 levels in each of two areas: Roadworthiness and Traffic. The 10 levels are split into bands of red, amber and green, so the best rating you can get is Green 00 in either area, and the worst you can get is Red 10.

To further complicate the system, your individual score is based on your performance, such as the test history of your vehicles or the results of roadside checks. Where there are no actual records, the typical standard of other operators, who are similar in size or type, are used. It is important to bear in mind that your score can change without you doing anything, as the score is designed to compare your performance with other operators. So if the average improves, your score goes down – and vice versa. So far so good, but we have to ask if the system is working and how it could be improved.

Clearly, the larger the fleet, the more likely it is that VOSA will have real data on which to base the score and therefore the more accurate the score will be. We have heard from large members with Green 00 scores who say they are not being stopped at VOSA checks – and that is a good thing. Smaller operators, however, are less likely to be checked, having fewer vehicles for testing, and it can therefore take many years before an historic score can be established.

In my view, the system is limited, as it relies on a very small base of information. So why not give operators credit for the actions they take to ensure compliance? Why not allow operators to register their membership of the RHA as a sign that they are trying to operate to high standards? Why not encourage operators to have their systems and procedures audited by RHA, and then record this on their OCRS score as an indicator of their efforts to comply? The concept of VOSA using data and intelligence to target their limited resources on the small but significant number of firms which deliberately seek to cut corners and therefore put lives at risk and compete unfairly is sound. The RHA wants to help VOSA make the system more effective, allowing responsible operators to go about their business without undue interference. There is still a major problem with so-called cowboys, and we need VOSA to concentrate its limited resources on rounding them up.

Digital tachos: retrofit now!

I would strongly advise members to consider the views aired in the September edition of ROADWAY concerning the differences between the first and second-generation digital tachograph.

When the digital tachograph was first introduced in May 2006, the European Union issued clear guidance about the relationship between the way analogue and digital tachographs record driving time and how enforcement by member states should reflect this. I refer to Guidance Note 4 to Regulations EC 561/2006 and EEC 3821/85.

The guidance note points out that drivers involved in frequent or multi-drop or stop/start operations may be faced with higher records of driving time when using the (first generation) digital tachograph than would be the case with an analogue tachograph. Compensating for the differences, the EU said that member states could allow up to 15 minutes tolerance over a 4.5-hour block of driving time, provided such claims could be supported by evidence.

At the time the EU said this was because the digital tachograph recorded driving time more accurately than the analogue. We all know that it was because it rounds up driving time to the next whole minute.

The introduction of the second-generation digital tachograph means that the operators of large commercial vehicles now have the opportunity to redress the balance. Operator tests, run in conjunction with the tachograph manufacturers, have proved that there is a profound difference between the way the old and new digital tachographs record driving time. The second generation only records the activity that accounts for the larger part of a minute and there are significant productivity gains to be had, as was illustrated by the trial conducted by RHA member Smith’s of Denny. Operators can retrofit the new tachograph now and, according to the tachograph manufacturers, the cost of doing so should be recouped in a relatively short time. All newly-registered vehicles must be fitted with version two from 1 October this year.

A major aim of the EU’s “Social Legislation in Road Transport” – the legislation behind all of this – was to harmonise conditions of competition between operators. The existence of the second digital tachograph raises the distinct possibility of competing operators being in a position where one would be prosecuted while another does not breach the regulations for the same working practices. As driving time recorded on an identical journey by both types of tachograph can vary up to as much as an hour – favouring the second generation unit and by even more if it is true multi-drop work – there could be legal challenges in the pipeline.

Unfortunately the RHA’s view is that there is very little prospect of VOSA or the DfT being minded to change its policies on enforcement. Currently, the official view is clear: the driver has driven the number of hours that the tachograph fitted to their vehicle says they have driven.

At some point the EU will no doubt issue guidance on this, but that will take some time and will need member states to lobby for it. So our advice to members is retrofitting is the best way to address the current imbalance.

Prepare for new O-licence rules

On 4 December there will be a significant change to the rules regarding operator licencing, with new regulations on admission to the occupation of road transport operator coming into force.

This major development in the industry will be covered in detail at the RHA Roadshows which are running from September to November (see page 9 for details) and members should attend these events to hear how their licences will be affected. We are grateful to transport lawyer Lucy Wood, of Rothera Dowson, who has assisted the RHA in preparing for these events.

The regulations replace the European directive that brought the transport managers’ CPC, rules on financial standing, and the concept of good repute to the UK: the original directive was one of the first pieces of legislation that the UK adopted after joining the Common Market.

As far as professional competence is concerned, the National CPC examination ends and all entrants will sit a combined National and International examination. Existing CPC holders who gained their qualification by examination will retain their certificate but holders of ‘Grandfather Rights’ certificates will have to demonstrate they have either been a transport manager on the same O-licence continuously for 10 years prior to 4 December 2009, or provide signed declarations from previous operators that they have worked for and been a named transport manager during the required 10-year period. Exemptions for holders of certain other professional qualifications will continue.

The new rules for financial standing will require operators to demonstrate that they meet the specified conditions in one of three ways, including annual accounts certified by a properly qualified person. The accounts must follow a specified form and content, including a balance sheet, profit and loss account, and notes on the accounts.

A new business without access to accounts will require a statement by a properly qualified person setting out assets and liabilities or an opening balance also certified by a properly qualified person.

The third type of evidence that will be acceptable is a financial guarantee of some sort, ranging from an overdraft facility to an invoice finance agreement. Please note that the ‘properly qualified person’ will need to include a statement giving personal details and their qualifications.

As far as good repute is concerned, the new regulations allow the Traffic Commissioner (TC) to take direct regulatory action against transport managers who no longer meet the requirement of good repute or professional competence and the TC must declare the transport manager ‘unfit’.

Such a declaration would remain in place until the TC determined good repute or professional competence was restored and the TC would establish what rehabilitation is required for the transport manager to regain his good repute or professional competence.

This could affect companies who use external transport managers because the loss of good repute due to an issue with one company would prevent them from being the transport manager for any others with whom they have a contract.

Too wrapped up in red tape?

I met Transport Minister Mike Penning recently and discussed a wide range of issues that affect our members and an email update was sent out after the meeting. One way or another the issues all boiled down to legislation, so it was encouraging to hear that he is keen to get rid of bureaucracy by removing as much of the red tape that surrounds us as possible.

We have had similar initiatives before and it can be difficult to identify areas where life could be simplified without jeopardising the purpose of the legislation. This might be health and safety, employees’ rights, the environment or fair competition – the four main objectives of much of the legislation which applies to RHA members. So where can we see opportunities for simplification?

One obvious issue is the overlap between the Working Time Regulations and the Drivers’ Hours Regulations, which can appear to conflict with each other at best, and contradict each other at worst. But, sadly, the potential to tackle this nonsense is limited because the government is not in full control here. These are pieces of European legislation, so Westminster’s options are limited. Indeed, it may fall to the RHA, through its network of fellow associations across Europe, to get the process going and we know how long that can take.

We will be pursuing this and updating members if and when any progress is made. On the purely domestic front there are quite a few pieces of legislation we believe could be removed altogether or simplified to the benefit of RHA members. Take employment law for example. This is a field well known for its complexity, with many employers falling into legal ‘traps’ because they fail to follow complicated and – with justice in mind – unnecessary procedures that are well intentioned but contribute nothing to the fairness of the process overall. Why can’t we make dismissing someone guilty of gross misconduct much simpler? We have seen cases lost against people who have assaulted colleagues or clients because of procedural failures.

That cannot be right and the employer must have some protection in law just as much as the employee. The other area of law which is particularly – many would say ridiculously – complex is health and safety (H&S). However, I must qualify this by saying that much of the needless difficulty could well be caused by external H&S consultants or in-house managers who have become so risk-averse that they impose totally unreasonable demands on the poor visiting haulier. How many members carry a full wardrobe of PPE kit because the demands of consignors and consignees are different? The Health and Safety Executive is often unfairly blamed for the more ridiculous examples – the so-called ban on ladders being one example – but it can help by giving guidance along the lines of “please do not use H&S as a smokescreen for your own stupidity” as well as by simplifying the regulations themselves.

Turnover is vanity – profit is sanity…

… I suspect that many people have heard that saying – it’s been around for years. I also suspect that many might think that profit is difficult if not impossible in the current climate, with fuel prices at record levels and customers very reluctant to accept rate increases that pay the higher diesel bills or, for that matter, other cost increases such as wages and insurance.

Having said that, the published accounts for some firms in the industry make interesting reading, with decent levels of profit being reported in quite a few cases. The trade press also publicises success stories as well as the spectacular failure of some high-profile and well-known names. We are now something like 30 months into recession, with no clear and substantial evidence of recovery, so demand for our members’ services is probably at an all-time low, but the number of vehicles available, and the number of businesses competing for the work, have both declined.

We eagerly anticipate the publication of the Traffic Commissioners’ annual reports, as they will show how much of a decline there has been. We know there was a drop of some 3.6% in vehicle numbers from 2009 to 2010, although the drop in restricted licensed vehicles was higher than in standard licences. But how big has the drop been in the past 12 months? In the last six months, my visits to RHA council meetings suggest we are reaching a stage where there are real shortages of certain types of vehicle and, in some markets, bringing supply and demand for haulage into a better balance than has been the case for some years.

Perhaps we are now in the situation where real negotiation can take place rather than customers offering work to operators desperate for business on the basis of ‘that’s the rate, take it or leave it’. Perhaps we are even in the situation where RHA members are able to ‘leave it’, because they know there is enough work out there, and there is no need to accept whatever a customer might be willing to offer.

But, despite being in a stronger position, it is no use getting plenty of work at rates that might seem very attractive if the customers pay when they feel like it. A member once said to me that things were so bad that even the customers that don’t pay had stopped giving him work!

We are not in that position now, but it goes without saying that getting paid is absolutely central to making a profit. It is clear that some members are better at this than others. Get the basics right: agree terms in writing, invoice promptly, chase up overdue payments and check the credit rating of every customer regularly so you get fewer nasty surprises. This is common sense, but is it common practice?

The All Party Parliamentary Road Freight Group

This meeting, Chaired by Rob Flello MP, considered a number of current issues, starting with a proposal for the insurance industry to make the Motor Insurance Database available to the Police at the site of crashes. The Police could then contact the insurer who would ensure that an operator’s preferred recovery company is called out whenever possible, and would deal with such issues as special loads including livestock or dangerous goods. The insurer would also be able to contact the insured – if not at the site – allowing a claim to be opened much quicker than normally. The insurance company would then be better place to limit any additional costs that would inevitably be passed on to the operator. This could have real benefits for hauliers, as it may reduce the cost of recoveries and storage.

The meeting then went on to discuss the issue of foreign vehicles and steps that might be taken to address the imbalance between the UK and other EU countries’ vehicle operating costs. It is clear that the Government are keen to make some progress with the Coalition’s aim to tackle the issue of unfair competition from foreign hauliers, but that the scope for action is limited. Previous efforts to design an effective Lorry Road User Charging Scheme proved unsuccessful so the DfT is now looking at a time-based scheme that will impose charges on a daily, weekly, monthly and annual basis. The RHA has always maintained that any scheme must be simple to operate and cost neutral as far as UK companies are concerned. We expect formal consultation on the Government’s proposals to start this summer.

Finally, the meeting discussed the challenges that result from the Olympics next year. This massive event – and the associated events such as the Queens Diamond Jubilee and the Paralympic Games – will bring significant disruption to the streets of London for several months next year and trade and industry must start planning now to deal with it. A large number of issues were addressed, including the limited road space that will be available because of the Olympic Route Network, the substantial number of temporary and amended loading and access restrictions that will apply, the need for consignees to be aware of limits that the delivery industry will be subject to and the difficulties that recovery companies will face in getting to incidents. Transport for London, who are now responsible to making the transport network work during this period, have assured RHA that they are aware of the concerns being expressed and will be working very hard to resolve them as soon as possible.

VOSA Chief Executives’ Meeting

This meeting concentrated on VOSA’s Business Plan for 2011/2012. This is based on four “pillars” – Testing and Inspection, Licensing and Authorisation, Enforcement and Supporting Industry. RHA is pleased to see strong emphasis on VOSA’s three main roles: we are keen to see improvements to the HGV Testing scheme and proper consideration being given to operators’ needs when taking forward the plan to open more Private Testing facilities whilst at the same time closing their Test Stations.

The RHA strongly supports the Operator Licensing system in the UK, believing that it has produced one of the safest haulage industries in the world. A central element of O’ Licensing is the independent Traffic Commissioners (TCs), and, whilst we recognise the need to ensure efficiency and good service from the administrative support that VOSA provides, it is essential that there is ‘clear blue water’ between VOSA and TCs. The plan also includes a reference to a Service Level Agreement with the Traffic Commissioners, which has not yet been signed off and is a cause of some concern because of the potential for a clash of interests within the TCs’ system. The third ‘pillar’- Enforcement – is an absolutely essential part of VOSA’s work, so the emphasis that the Business Plan puts on this area is welcome. The Plan sets out to identify “…drivers, operators…” against whom it may be appropriate to take action for non-compliance, describes how they will do that and what sanctions might result for those who are found to be offending.

The fourth ‘pillar’ – Supporting Industry – includes five work streams, each of which has some significance for the industry. The first is enforcement and this complements the enforcement issues mentioned above by seeking to identify trends in non-compliance in order to produce a plan to educate those most likely to fail to comply. VOSA are looking into some form of accreditation for the many and varied quality assurance systems that are used across the industry, the trade bodies, including RHA are exploring with VOSA how we might promote higher compliance standards in those areas identified as above and a communication plan is being developed to encourage higher compliance standards. Finally, work is being done to ensure that the statistics that are produced by VOSA are relevant and can be used to identify why some operators are less inclined to comply with the vast range of regulation that affect us all.

The meeting concluded with a brief discussion about the potential for a Compliance Forum that would bring together the full range of bodies involved in maintaining and improving standards in the industry. This is in the early stages of development and RHA was asked to come forward with affirm proposal as to how it might work.

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