2023 a pivotal year

2023 HAS continued to be pivotal for the logistics sector: delays to the UK’s transport decarbonisation agenda were announced; the HS2 extension between Birmingham and Manchester was cancelled; significant changes to customs and border processes were implemented and further delays were confirmed; and industry has worked with Transport for London (TfL) on changes to the Direct Vision Standard (DVS).

DECARBONISATION

With the net zero by 2050 deadline in place and low and ultra-low emissions zones being installed around the country, logistics operators face the challenge of achieving efficient deliveries with minimal environmental impact. The logistics industry is working hard to decarbonise – Logistics UK’s Electric Vehicle (EV) report 2023 identified that 62% of its survey respondents plan to decarbonise their van fleets by 2030 – however, a lack of certainty from government is currently hampering the progress needed on the energy infrastructure and incentives businesses need to work towards reaching net zero. 

This was specifically highlighted in September when government announced its decision to delay the ban on the sale of new diesel and petrol cars and vans from 2030 to 2035. In the view of Logistics UK, rather than pushing back deadlines, government needs to be looking forward to ensure both business confidence and that the vital supporting infrastructure is in place. As of 1 July 2023, there were 44,020 public electric vehicle chargepoints available in the UK – an overall percentage increase of 19% since January and while this is strong growth, if only 7,000 new installations take place every six months, the UK will have only half the targeted amount of public chargepoints – 300,000 as set by DfT – by 2030.

In 2024, significant progress will not only need to be made with electric light commercial vehicle infrastructure, but for heavier vehicles too. In October, government announced a package of decarbonisation measures that included the long-awaited outcome of the Zero Emission HGV and Infrastructure competition (ZERFD) as well as the Call for Evidence to inform and support the development of the zero emission HGV and coach infrastructure strategy which is due to be published in 2024. However, ultimately, progress needs to be faster. Recharging and refuelling infrastructure will take significant time and investment to fully to support the zero-tailpipe emission vehicle fleets of the future, and work for that must start today. 

Some operators are already starting to adopt Low Carbon Fuels (LCFs), such as hydrotreated vegetable oil (HVO) and biomethane, to reduce HGV emissions now. However, currently, LCFs come at a high cost and lack the necessary infrastructure, such as refuelling stations. This, along with questions regarding government’s long-term commitment to LCFs – following its response to the Transport Committee’s Fuelling the Future report – is a significant barrier to uptake. Publication of government’s Low Carbon Fuels strategy is now significantly late. With LCFs able to produce immediate carbon emission reductions of up to 80% without the need for large vehicle modifications, the lack of strategy and clarity for operators is creating wasted opportunities for vital wider emission reductions. It is therefore vital that this is addressed in the coming twelve months.

HS2 CANCELLATION

Many operators have been looking at modal shift, where possible, to help reduce emissions. Rail produces significantly lower emissions than other modes and with one freight train able to carry the load of up to 129 HGVs, railways are being increasingly used for freight across GB, transporting 10.48 billion net tonne miles of rail freight in 2022 – an increase of 11.3% from 2021. However, the rail freight sector currently faces capacity constraints, competing with passenger travel for space on the network. As a result, the cancellation of the HS2 extension between Birmingham and Manchester, as announced in October, was particularly disappointing. In the view of Logistics UK, HS2 was a vital plan to unlock economic growth across the UK with the additional capacity across the rail network which it would have released critical to expanding rail freight opportunities and enabling a shift from road to rail to cut carbon emissions. Additionally, putting high speed trains on the existing line between Birmingham and Manchester will make today’s rail freight capacity issues even worse.

At the time of the announcement, Logistics UK also highlighted how the decision would damage investor confidence and harm the development of the national logistics network that the UK needs to thrive. In the next twelve months, Logistics UK will continue to assess the long-term impact this will have on rail freight capacity and road improvement as well as urge government to provide detailed confirmation that the funding previously ringfenced for the construction of the Birmingham-Manchester stretch of HS2 will be reallocated to upgrading transport links across the UK, including across the north of England and the Midlands.

CUSTOMS

In October the ‘red’ and ‘green’ lanes went live as part of the Windsor Framework. This scheme allows food and drink goods moving from GB to final destination in NI access to the ‘green’ lane and requires prepacked meat and minimally processed dairy products like fresh milk and cream to have ‘Not for EU’ labelling to ensure products remain in NI as intended. Goods for onwards travel to the EU must use the ‘red’ lane and meet all EU Official Controls Regulations. 

2024 will see further significant trading changes for UK PLC and its European trading partners, with the planned introduction of the Border Target Operating Model, which sets out a new approach to importing into Great Britain. In August, government confirmed a three-month delay to the implementation of phase one and two of the model, with the first phase now set to go live on the 31 January 2024. This will include the introduction of health certification on imports of medium-risk animal products, plants, plant products and high-risk food and feed of non-animal origin from the EU, as well as full customs controls for non-qualifying Northern Ireland goods. Phase two, which includes the introduction of documentary and risk-based identity and physical checks on medium risk animal products, plants, plant products and high-risk food and feed of non-animal origin from the EU, will be implemented in April 2024 and under the final phase – set to take place in October 2024, Safety and Security Controls on imports into Great Britain from the EU and Rest of World will be introduced. Alongside the final phase, the introduction of the UK Single Trade Window is expected.

With significant gaps in the detail and guidance required – including how the import controls will work for the Short Straits, how the groupage model will work and what Common User Charge government will impose at its Border Control Posts, there is still much to be done with implementation dates fast approaching. Logistics UK will continue to press for these urgent details as well as highlight the challenges surrounding the short timelines given that adaptation of business operations and models, including developing, testing, and operationalising new IT systems will take a minimum of six to 12 months. With further roll out of the Windsor Framework also due to take place in 2024, Logistics UK will continue to work with members and national and regional government to ensure any disruptions are minimised.

DVS

A key priority for road operators this year has been the upcoming changes to the DVS scheme, due to be implemented in October 2024. First implemented in March 2021, the scheme is targeted at HGVs over 12 tonnes and is enforced across Greater London, 24 hours a day, seven days a week. It operates via an HGV Safety Permit Scheme in which a star rating system ranks the HGV vehicles from zero to five stars, based on how much vision the driver has directly through their cab windows. While currently a minimum rating of one star is required to qualify for the required HGV Safety Permit – with operators of zero star rated vehicles able to comply with the scheme and obtain a permit only by evidencing the fitment of additional safety equipment (the Safe System) – from October 2024, changes to the scheme will see will see HGVs over 12 tonnes and with a star rating of zero, one or two needing to comply with updated requirements. Additionally, the Progressive Safe System (PSS) will replace the current Safe System.

While the safety of all road users remains a crucial priority for the logistics sector – according to a report issued by TfL in June 2022 more than 94% of HGVs in London were operating with a Safety Permit – and the sector remains fully committed to this, there is significant frustration among industry that operators will be required to replace equipment already installed by the sector in good faith to meet the current Safe System, without any clear explanation on why existing kits may need to be replaced under the new requirements. Additionally, there are challenges surrounding short lead-in times, a lack of available kit and a shortage of qualified fitters to install it, all of which will make it impossible for the industry to be ready for the implementation date next autumn. This will remain a key priority for 2024 and Logistics UK will continue to work with members, TfL, RHA and the Mayor of London to highlight the challenges and work towards achievable – and reasonable – solutions. 

Overall, logistics is an extremely complex industry and there are multiple changes and challenges operators must navigate. However, industry is also highly adaptable and will continue to work together to ensure the smooth flow of goods.