The Scottish Government

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Chapter 1
Context and key issues for freight in Scotland

Context

This Action Plan supports the National Transport Strategy and, in turn, the Framework for Economic Development in Scotland, Scotland's Sustainable Development Strategy, Scotland's Climate change Programme and the Air Quality Strategy. As such, our objectives and actions will contribute to achieving the key strategic outcomes identified in the NTS:

• Improving journey times and connections
• Reducing emissions
• Improving quality, accessibility and tackling affordability

The Framework for Economic Development in Scotland recognises transport infrastructure is one of the major enabling factors supporting modern economies. Scottish businesses are clear about the importance of an effective national transport infrastructure in Scotland. They want an infrastructure that allows goods to move quickly and reliably in response to market demand; they recognise that considerations about accessibility are vital, given the diversity of destinations across Scotland; and they understand the importance of environmental sustainability in the movement of goods.

This Freight Action Plan is the result of a major consultation undertaken by the Scottish government with key stakeholders ^{. 1} The freight sector has been crucial in building a picture of the future of freight across Scotland. So, too, have been manufacturers, the service sector and others in the Scottish economy.

The success of the Freight Action Plan will require a partnership approach between the Scottish government, other public bodies and industry. The Scottish government, and regional and local transport authorities have a role to play, not simply in providing and maintaining infrastructure but in stimulating actions that the market may not undertake by itself, where there is clear and persuasive rationale for such market-enhancement interventions. The Freight Facilities Grant scheme - which is helping to move freight from roads to water and rail for environmental benefit - is a case in point. More broadly, it is the market itself - and more particularly businesses across Scotland - that has the leading role in developing flexible and innovative freight operations, stimulated by the competitive pressures that exist. By working together, the flow of goods across the economy will benefit. Thus responsibility for delivering the actions identified in this Plan will be shared between partners.

Issues such as vehicle and fuel taxation, the working time directive and enforcement are not devolved to Scottish Ministers. However, we will continue to liaise closely with relevant departments to ensure Scottish interests are fully considered at national and European levels.

Trends

Globalisation-

• Continued expansion in trade, relocation of production, and wider sourcing and distribution of goods
• Fast developing economies such as Eastern Europe, China, India, Russia and Brazil offer massive potential as new markets for Scottish goods
• Good internal and external transport links are therefore vital for continued competitiveness and growth

Changes within the Scottish economy -

• Stronger and new export markets opening up for food and drink sector
• Increased demand for consumer goods, with resulting increase in imports
• The restructuring of the global economy makes it imperative for Scotland to develop high value activities, based on quality, innovative design and superior performance
• Freight and logistics connections can play a key role in stimulating Gross Domestic Product growth

Changing Customer Demands -

• Between January 2000 and December 2005, the value of on-line retail sales in the UK grew roughly twenty-fold.
• Just-in-time delivery
• Narrowing of delivery time windows
• Scottish freight and logistics must be sufficiently resilient and flexible to accommodate changing demand

Restructuring and changes to distribution networks -

• Out-sourcing of freight and logistics services
• Hub and spoke networks
• Centralisation of inventory
• Distribution centres for imported goods
• Collaborative initiatives.
• Businesses must continue to innovate to gain competitive advantage

Key Issues

The industry consultation and Scoping Study highlighted a number of specific issues for freight in Scotland. Among them were the following.

There are obvious concerns about traffic congestion making it more difficult for businesses to meet delivery requirements. The sector has been facing rapidly increasing fuel prices in recent years, and cost increases are felt more acutely in Scotland because of longer distances to important markets. More specifically, there are high cost and long journey times to and from Highlands and Islands and other rural and remote areas.

Some feel that there is a negative perception of the freight industry and a need for it to raise its professional image and develop the wider business skills required of modern services sectors.

On policy matters, the consultation suggested that there is a lack of appropriate freight and logistics data for transport planning. In addition, there is a perception that freight needs are not being fully considered in transport planning and point to the need for closer dialogue between freight and passenger interests. More needs to be done on the co-ordination of freight policy at local, regional, Scotland-wide and UK levels.

Heavy goods vehicle emissions standards have improved significantly over the past decade. With the introduction of the Euro 4 standard for new heavy goods road vehicles in October 2006, emissions from new vehicles since 1990 have reduced as follows:

• carbon monoxide down from 11.2g/kWh to 1.5g/kWh
• hydrocarbons down from 4.2g/kWh to 0.46g/kWh
• nitrous oxide down from 14.4g/kWh to 3.5g/kWh
• particulates down from 0.5g/kWh to 0.02g/kWh

However, local air quality and noise levels need to be monitored and improved further. In line with the National Transport Strategy we will ensure that the impact of the Freight Action Plan is reflected in the proposed carbon balance sheet for transport.

There is also a desire to continue to encourage modal shift from road to rail and shipping - this is consistent with the aim of the National Transport Strategy to reduce emissions.

Ports are key to the logistics chain in providing the interface between land and sea and the infrastructure to support cargo movements by sea. To enable ports to fully exploit this strategic and economic role, as well as future potential opportunties such as international transhipment, they need to have effective landside transport connections.

There are also emerging opportunities to develop Scotland's transhipment capacity and the consultation suggested a need for on-going improvements to Scotland's freight connections to markets in the UK and Europe.

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