Select Committee on Environment, Transport and Regional Affairs Appendices to the Minutes of Evidence


Memorandum by Frank Worsford Esq, University of Westminster (IW 04)

INQUIRY INTO THE POTENTIAL OF INLAND WATERWAYS

INTRODUCTION

  The fuel crisis earlier this month has jolted many in the logistics industry to seriously focus on the consequences of having too many eggs in one basket, ie road transport. As a result there is a growing interest in the use of alternative freight modes. This is something new and to be welcomed on both economic and environmental grounds. Indeed, until relatively recent little effort was made at an official level to implement either a coherent or consistent transport policy aimed at utilising all available transport modes, especially waterborne transport. In retrospect, this would have been a sensible policy measure towards reducing lorry road miles, switching freight to/from the regional ports and major inland waterways. In the process removing road traffic away from the heavily congested South-East road network. Instead, market forces were more or less left to sort out freight transport issues. The years of neglect and lack of vision have left a residue of problems, which unfortunately we are now all too familiar. The urgent need for action and solutions has become all the more apparent with growing recognition that conventional fuels, petrol and diesel, is a finite and expensive resource.

  Following publication in 1998 of the integrated transport White Paper, subsequent daughter documents and PPG13 it would appear there is stronger official recognition and encouragement towards promoting the use of alternative transport modes, such as waterborne transport wherever possible and appropriate. In the context of Britain waterborne transport is usually defined to include:

    —  coastal shipping; and

    —  inland waterways.

  Coastal shipping, is taken to mean short sea shipping and is usually regarded as involving those vessels trading within a limited zone, such as in the waters around the British Isles or west European waters. Coastal ships are capable of taking reasonably large sized cargoes.

  Inland waterways includes canals, navigable rivers and tidal estuaries. It is recognised that a large element of Britain's inland waterways consists of narrow gauge canals which are principally suited to tourism and leisure activities. Their cargo potential is very peripheral in the context of total freight movements. However, Britain also boasts a number of strategically located canals, rivers and estuaries, many of which are capable of taking relatively large sized ships. Moreover, some can also cater for ocean-going ships, such as the Manchester Ship Canal.

  The important point, from a logistics perspective, is that waterborne transport modes have the potential to play a greater role in overall freight movements. Furthermore, provide an environmentally acceptable and sustainable transport mode for the future.

BRITAIN'S ISLAND STATUS

  The case supporting waterborne freight transport is strengthened by Britain's geographical position, maritime history and natural coastal highway assets. Britain as an island nation with a long maritime history is in a good position to gain maximum environmental and economic benefits from waterborne transport. Furthermore, as a nation with an island status and on the periphery of Europe the idea of maintaining a strong maritime sector is a prudent move. Britain's island status means there are many natural and man-made advantages to be exploited and therefore potentially gain the maximum benefits from waterborne transport. For example, the British coastline is over 7,240 kilometres long; there are 1,548 kilometres of coastal waterways and the major estuaries account for over 373 kilometres and tidal navigation 578 kilometres.

  Additionally, there are over 638 kilometres of canals and river navigation in commercial use. The Manchester Ship Canal, the Severn, the River Thames, Ouse and Trent, the Solent and Hull Estuaries and many other waterways allow ships to penetrate deep into the inland markets. It may come as a surprise to discover that there are over 300 ports in Britain of various sizes. Most of Britain's major conurbations (Manchester, Bristol and Yorkshire) could be served by waterway. Indeed, no industry in Britain is more than 75 miles from the coast: in terms of major inland waterways even less so in distance.

WATERBORNE ADVANTAGES

  Many advantages are claimed for water. Water is a major transport asset and a safe, economical, fuel efficient and eco-friendly mode for conveying a wide variety of freight. This is something that the Government is trying to get more industry sectors to recognise. Since the 1990s there has been a flood of publications praising waterborne freight transport (see selected reading). For example, in 1992 NUMAST, the Merchant Navy Officers Union, produced a report The Case for Coastal and Short Sea Shipping, pointing out the advantages of waterborne transport. Highlighted among these was the claim that ships are an extremely energy efficient means of transporting goods, far outstripping both air and road transport in the relation between energy consumption and the volume of freight carried.

  In total terms, the UK commercial road transport industry consumes almost 10 times as much energy as domestic shipping to carry about twice the amount of freight. According to the NUMAST report switching more trade to water would make a major contribution to energy conservation and would assist in curbing transport air pollution. Furthermore, the transfer of freight to water could also play an important role in easing traffic congestion and the pressures to build yet more roads. In the new millennium the notion of conservation and environmental protection will gain greater significance in the light of Governmental international agreements and following numerous eco-disasters.

WATER MARKET SHARE

  Presently, coastal shipping accounts for 7 per cent of Britain's domestic freight tonnage (goods lifted), or around a quarter of domestic freight (goods moved). The coastal shipping market has mainly been petroleum products and aggregates. In contrast the actual amount of traffic on Britain's inland waterways network has been in decline for many years. This traffic is tiny, accounting for less than 1 per cent of domestic freight moved. Unfortunately, much of Britain's inland waterways are unsuitable for carrying significant volumes of freight, being more suitable for narrow barges and leisure activities.

  As recent DETR figures reveal road transport still remains the dominant mode, with virtual stagnation in the other modes. The figures below illustrate the situation over the 10 year period between 1987 and 1997.

DOMESTIC FREIGHT TRANSPORT BY MODE: 1987-98

Goods Lifted—million tonnes/percentage

  
1987
1990
1997
1998
Road
81
81
81
81
Rail
7
6
5
5
Water
7
7
7
7
Pipeline
4
6
7
7


DOMESTIC FREIGHT TRANSPORT BY MODE: 1987-97

Goods moved—billion tonne kilometres/percentage

  
1987
1990
1997
1998
Road
58
62
67
65
Rail
9
7
7
7
Water
28
25
21
23
Pipeline
5
5
5
5

Source: Transport Statistics Great Britain, 1999, DETR.

  Britain's use of waterborne transport for domestic freight movements sharply contrasts with the European network of inland waterways, where much more financial investment, imaginative, visionary and innovatory approach is very much evident. As a result there has been a continuing expansion of waterborne transport in Europe. For example, Europe Combined Terminal (ECT) have recently established a point to point barge service from Rotterdam to the inland port or Duisburg in Germany.

  The concept of barges and small ships penetrating far into the European hinterland is assisted by a comprehensive network of inland waterways and canals. The European inland shipping group Deutsche Binnenreederei operate a large fleet of barges and small ships serving ports from the Dutch coast throughout continental Europe to Russia travelling on the Maas, the Rhine, the Danube Canal, the Elbe Havel Canal and the Oder.

RESEARCH STUDIES ON WATER

  During the last decade, and in response to concern over worsening road congestion, an increasing amount of thought has been given to the question of waterborne transport. In the early 1990s the then Department of Transport (DoT) commissioned a study into UK coastal shipping, Roads to Water. The objectives of the study was to identify:

    —  where water could be competitive for internal UK freight movements; and

    —  where there could be scope for reducing or eliminating the road transport element for external freight movements by encouraging greater use of regional port facilities.

  The DoT study was undertaken by Jonathan Packer, a maritime specialist and consultant, and completed in 1994 (see references). From a shipping perspective this made depressing reading. According to the study the growth of the UK's internal road freight market has been particularly marked, increasing from about 100 billion tonne kilometres in 1979 to just over 130 billion tonne kilometres in 1991. Improved road freight efficiency was responsible, bringing about changes to distribution systems and heightened expectations about cost competitiveness and quality of services, such as flexibility, speed and reliability.

  The study pointed out that there were limited new markets to be gained by water from existing road routes. Available statistics indicated that a high proportion of total inland freight movements were concentrated within a central geographical triangle of London-Middlesbrough-Liverpool. In other words, involving distances no greater than 250 miles. These are distances and trip times which shipping cannot normally compete other than for non-time sensitive freight and low value bulk cargoes. For example, the Scotland to London trip can be achieved in 8 hours by road (or rail), giving an overnight delivery service.

  The study maintained that the only significant true coastal freight movements remaining were for petroleum products, stone and coal where large movements are matched with coastal sources and coastal delivery. Interviews conducted with senior management in various industry sectors indicated there was little optimism about the potential for switching to coastal shipping. There was a deeply held perception that ships were slow, involved double-handling, risk of delay and disruption.

  However, within the short space of a few years the scene was changing. In 1997 Jonathan Packer in a follow-up study Roads To Water Revisited, was much more optimistic about coastal shipping's future. A number of factors has helped in bringing about change and there kick-start waterborne transport.

  First, the focus in the UK and the wider European Community was increasingly turning towards the use of rail and the encouragement of combined transport (intermodalism) as the best way of accommodating road traffic growth without new road building. For example, a great deal of thought and effort has been given to creating a system Trans-European Rail Freight Freeways. During recent years the idea of also including waterborne transport in the overall framework of combined transport has become more accepted.

  Second, there was now general acceptance that something had to be done to protect the environment and tackle head on issues like poor air quality and worsening road congestion. The old solutions no longer worked (if they ever did); new solutions had to be found. Shipping is a relatively environmentally friendly transport mode, even more so than rail, and does not require the construction of major new infrastructure, highways and freight corridors.

  Third, in 1997 a new Government came into office which put transport (and the environment) higher up the agenda, including shipping, as an integral part of its integrated transport policy.

  Fourth, as a policy objective the Government sees integrating road transport with major transport freight interchange points, such as the new concept multimodal freight villages, as essential towards making better use of all modes. During recent years the private sector has increasingly injected massive sums of money into building and developing these new freight facilities, a number of which can be serviced by water transport in addition to road and rail. For example, Liverpool, Thamesport, Tilbury Docks, Southampton, Felixstowe, and Cabot Park at Avonmouth. In February this year the owners of Cabot Park and Bristol Port announced a multi-million pound joint venture, thereby fully integrating both the port and park.

  Earlier in the year Burford Holdings and Shell announced proposals for the development of a major new freight multimodal freight village planned for a site south-east of Manchester and adjacent to the Manchester Ship Canal to be known as Trafford Interchange. In the new millennium developments such as these will assist in providing the essential infrastructure required to interface between road, rail and water, thereby producing the synergistics effects for long term sustainability—offering greater customer choice, cost reduction, high quality and added-value logistics services.

FREIGHT FACILITY GRANTS

  The application of financial inducements is one of the Government's methods to encourage more freight movement by water (and rail). In recognition of the environmental and wider benefits derived from freight waterborne movement (in preference to road) there is a Freight Facility Grant (FFG) scheme. The scheme has been available for rail since the 1980s and was extended to inland waterways in the 1990s. There is a strong possibility that later during 2000 the Government will extend the FFG scheme to also include coastal shipping. As Lord Widdy the Waterways Minister pointed out:

    Tidal rivers and estuaries commonly used by sea-going vessels, the waters around our coasts and the short sea waters between Britain and the continent, probably have a greater part to play in taking more freight from our roads, thus relieving congestion and pollution. It is therefore our intention to bring forward legislation to extend the application of the freight grant regime to include coastal and short sea shipping. Source: Britain's Water Highways—A New Agenda for Freight, Birmingham 19 October 1999, Conference organised by Central Conference Consultants Ltd.

  As an incentive for getting freight onto water the Government's FFG scheme assists companies with:

    —  the capital costs of new freight handling facilities;

    —  the improvement of existing facilities or investment which will reopen; and

    —  investment that will reopen dormant facilities.

  Recent example of FFGs to companies to restructure their logistics planning and simultaneously provide real environmental benefits include a £1.5 million award to Baldwins Industrial Services PLC. The grant was used to develop the company's wharf on the River Tees for the transport of heavy cranes by inland waterways. Rix petroleum Ltd also received a grant of £884,000 in order to consolidate their Humber North Bank activities in Hull. Without the upgrading of the company's Fountain Road facility, barge operations for primary distribution would have ceased and there would have been an avoidable annual increase of 24,000 lorry journeys in the Hull area. A more recent example of FFG funding involves the movement of grain from Liverpool Docks up the Manchester Ship Canal and an integrated rail/ship operation involving Blue Circle on the upper reaches of the same canal.

  However, it has not all being sunshine. The FFG scheme has came in for severe criticism resulting in low up take up companies and complaints about bureaucracy, long delays and the complicated formulas used to work out the grants. In response to this criticism and to encourage more companies to apply for FGG's the Government has cut the amount of red tape surrounding the scheme and increased the budget to £50 million for 1999-2000. Furthermore, in an effort to encourage applications for inland waterways projects the Government is presently looking again at the rules of the FFG scheme.

GOVERNMENT ENVIRONMENTAL POLICY

  Encouraging waterborne transport dovetails neatly into the Government's environmental policy, especially on the issues of global warming and CO2 emissions. Under the 1997 Kyoto Protocol, Japan, the Government committed the UK to a 20 per cent reduction in CO2 emissions by the year 2010. Transport plays a major role in contributing to CO2 emissions and is therefore a target for Government amelioration action. Shipping is responsible for about 1 per cent of CO2 emissions. In contrast road transport is responsible for almost 20 per cent of CO2 emissions. This trend was further strengthened in 1999 following the UK's Government signing in Gothenburg of a new international Protocol to cut levels of transboundary air pollution across Europe and North America.

OVERCOMING OBSTACLES

  The Government's 1998 intergraded transport White Paper referred to research that indicated that there may be scope to divert up to 3.5 per cent of the UK's road traffic to water, split roughly equally between ships re-routing to ports nearer their origin and destination of loads, and the potential for bulk and unit loads to shift to the coastal highways. However, to survive, expand and prosper in the freight market of the new millennium, waterborne transport needs to consolidate existing markets and diversify into new markets. In seeking a modal shift the waterborne freight industry is confronted with a number of obstacles. These include:

    —  overcoming the resistance against waterborne transport from many operators and customers who have only experienced road transport; this means positive action in encouraging a cultural change in attitudes towards waterborne transport;

    —  undertaking research to identify end-users motives for choice of transport, favourite routes, frequency, quantities and types of goods being moved around the country;

    —  ascertain which market sectors may or may not be suitable for waterborne transport expansion, eg foods (especially chilled or frozen), fast moving consumer goods (FMCG), parcels or other time-sensitive goods;

    —  acknowledgment that there is a limited domestic market for waterborne transport as over 60 per cent of road freight movements in Britain are short-distanced (50 miles);

    —  acknowledging that many British markets can only be served by road, therefore water (or rail) is not a viable option in many cases;

    —  acknowledging that modern logistics requirements means that customers demand small and regular deliveries of goods—the just-in-time concept—an important limiting factor for the growth of waterborne transport;

    —  accepting that a large number of coastal ships have been designed to carry dedicated cargoes, such as petroleum or aggregates, and this limits their potential for greater cargo flexibility;

    —  that investment will be required to build and equip a fleet of modern sophisticated coastal ships—who initiates; and

    —  that many of Britain's ports require upgrading in terms of infrastructure, handling equipment and accessability for road and rail.

NEW TECHNOLOGY

  On a positive note many of the UK's ports in the 1990's began a process of enhancing and upgrading the services and facilities they provide and have penetrated other markets, such as containers. Coastal container ships provide a regular "feeder" service between Thamesport and Scotland. In the early 1990s the Dutch proposed a Port Hopper scheme for coastal ships doing a milk-run from the continent and serving a number of ports throughout Britain and Ireland within a set number of days.

  Another important factor helping to boost and promote waterborne transport is the application of new technology and investment in modern sophisticated and more versatile ships. The new generation of coastal ships, such as low profile ships allow greater inland market penetration. Ships with portable bulkheads assist towards accommodating different sizes and types thereby allowing for greater flexible cargo capacity. This technology helps create the potential for waterborne transport to capture a greater market share.

  A good example of the latest generation of coastal ships is that provided by the family firm F. T. Everard & Sons Ltd shipping company's new tankers ASPERITY and her sister AUDACITY. These ships set new standards in coastal tanker operations, their deep well cargo pumps and segregated ballast tanks providing safe and speedy cargo operations with greatly reduced turnround times. The heart of a tanker is the cargo system. Great pains have been taken to combine past experience and new technology to produce a system which will create new standards in coastal tanker performance. There are five cargo tanks in the new ships, all with different capacities to facilitate the carriage of differing quantities of multi-grade cargoes. Given the right conditions ashore it will be possible to turn the ship around in about three hours. To reduce workload in port, the moorings are monitored on the bridge using a closed circuit television system. The moorings themselves can be adjusted using bridge wing consoles.

  In order to maintain a high degree of flexibility and efficiency the road transport industry have equipped their vehicles with a wide range of independent on/off loading handling technology. This technology provides for greater economics, added value and increases the attractiveness of road transport. However, the concept of independent on/off loading equipment can also be successfully applied to water transport. For example, the PortHopper technology developed by Kantor BV in Holland has been designed for this purpose. As a special loading facility it can be installed on any type of inland water vessel. The system enables independent on/off loading an any location/time and allows transport services by waterways which were previously not attainable. There is no shortage of innovation and imagination so far as maritime technology is concerned. A further technological development is the Split Ship. This is a seagoing canal vessel which splits into two canal barges capable of penetrating far deeper in to UK and Continental waterways than conventional vessels.

CONCLUDING REMARKS

  Today, it is now possible to identify a host of factors which could assist towards boosting the future demand for waterborne transport services in the logistics industry. As detailed, among the key factors are the Government's integrated transport policy, growing environmental concerns, the growth of multimodal freight villages, new ship technology and of course Britain's natural water advantages. However, most people see the key driving force for change as being worsening levels of road congestion.

  Indeed, in January 2000 the Government admitted that over the next ten years road congestion levels would become worse unless radical measures are introduced. In July 2000 the Government announced a £1.2 billion package for roads technology measures in an attempt to keep down congestion levels over the next decade, but doubts have already been cast on this policy. As Britain's road network becomes increasingly subjected to road congestion the inland waterways and coastal highways are the major single natural asset which could provide almost unlimited spare capacity for freight movements.

  Therefore, inland waterways should be viewed presently as an under-utilised transport resource, but one that has great potential and is recognised as being fuel efficient, economical and eco-friendly. Also, that it should not be viewed a competitor but as a means of complementing other transport modes. In an age of sustainability this is an important consideration, assuming one can overcome inertia and bring about a culture and mindset change throughout industry towards the advantages and benefits to be gained from the use of alternative freight modes. The reality of the situation is clearly recognised. That is a modal shift towards water (or indeed rail) cannot be expected to offer an overnight solution or panacea to Britain's many transport problems. What is required is the issue being viewed in a long term context and addressing numerous issues involved. This approach may assist towards speeding up the revival of waterborne transport. For example, allowing 44 tonne lorries to move goods to/from ports, developing better railheads at ports, extending freight facilities grants to coastal shipping, capital grants for inland port development and new equipment and encouraging industry location to multimodal freight villages. To end on an optimistic note while waterborne transport has always played a role in the logistics industry there is every reason now to believe it may have an even bigger role to play in the future.

Frank Worsford
Transport Studies Group at the University of Westminster

18 September 2000


 
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