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Blog - Published 11th May 2017

Dirty Diesel

Dirty diesel and the transport and logistics

It is clear there are radical changes being made in transport and logistics sectors, much of it thanks to technological innovations emerging from “Silicon Valley”. After decades with very little innovation, some of the most radical and sweeping changes are coming which will transform the sector as we know it.

Diesel and the environmental

Environmental factors are becoming a larger and more important part of government policy. With global events such as COP21 in Paris last November, it is an issue that is harder and harder for world leaders to avoid – even President Trump!

An issue particularly relevant to haulage companies, and one that has received significant attention in the news recently, is the threat to public health that air pollution poses across England and Wales.

Current government plans to tackle air pollution are inadequate and have been deemed illegal by the High Court. The increasing pressure to cut emissions and improve air quality is likely to see the introduction of charges for diesel vehicles entering city centres.

The Mayor of London, Sadiq Khan, has recently committed to try cutting smog by introducing a “diesel” tax.

From 2019, diesel cars will be charged an extra £12.50 on top of the normal congestion charge, a move which looks likely to be followed by other cities in the UK. Should Mr Khan follow his counterparts in Paris, Mexico City and Athens there could be a complete ban on diesel vehicles altogether by 2025.

This has serious implications for haulage companies with diesel vehicles in their fleets, with further increased costs squeezing already tight margins, or diesel powered vehicles being banned from metropolitan areas.


Opportunity

The drive for cleaner air is likely to result in the government incentivising the adoption of cleaner vehicles and more efficient driving technologies as soon as possible.

A report published on 15th March 2017 by the House of Lords Science and Technology committee highlighted the huge potential economic benefits and efficiencies which autonomous vehicles could bring to the transport and logistics sector.

Chairman of the committee, The Earl of Selborne, believes autonomous vehicles;

“Have the potential to bring about transformational change to society but these changes will only take place if society is willing to both pay for and to adapt its behaviour to fit the technology.”

The committee recommends that the government should position itself so it is ready to adopt and embrace autonomous driving as soon as possible in order to enjoy the resulting benefits.

It did not take long for the government to act on this advice, and on 11th April 2017 the government announced over £109m worth of funding for driverless and low carbon transport projects, which will be coordinated by BMW and Ford, amongst others.

Following the snap General Election on 8th June, it is yet to be seen whether future policy initiatives will be made in the near future.


Beyond economics

With the efficiencies associated with cleaner vehicles and efficient driving technologies health benefits will come as well.

Autonomous lorries would cut pollution by driving in ‘platoons’, sticking to fuel efficient speeds, and also spending a greater percentage of time travelling at night. Low carbon emission vehicles will go straight to the heart of the problem and cut fumes.

With so much emotion around the damage emissions are doing to our health, and the huge pressures on the NHS, this could be another positive argument for the adoption of autonomous vehicles.

For more information on the business impact on changes to diesel vehicles, contact Jon Miller by phone on 01372 360130 or by email at jmiller@menzies.co.uk.

Jon Miller is a member of Menzies Transport & Logistics team who work closely with transport and logistics companies to find solutions to industry issues, utilising our expertise in everything from business strategy and corporate finance, to audit and tax advice.

Find out more about Menzies Transport & Logistics services.

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