Joined up thinking for the UK’s Roads.

The last couple of weeks have seen some significant announcements regarding the UK’s road network.  And the interesting thing is that many of them seem contradictory, making it clear that the UK seems to have no clear direction as far as road strategy is concerned.

• At the beginning of December the Dartford Toll crossing saw increases in charges during the daytime, with nighttime crossings, and crossing for locals made free.  The reasoning being to move traffic form the busier daytime into the quieter nighttime.
• Last Week, Manchester’s population voted 4-1 against the introduction of a Manchester Congestion Charge, which would have seen £1.5bn invested into alternative public transport.
• Boris Johnson announced that he was abandoning the controversial western extension to the London Congestion zone, and giving everyone a Christmas free of
• The M6 Toll road announced daytime road toll increases, with weekend and evening prices to remain unchanged. 
• And at the same time announces that there is a 12% drop in usage, based on the weakening UK economy.charging.

This week also saw the Scottish Executive put forward plans for a new second Forth Road Crossing, which is according to experts, insufficient to cope with the current traffic levels, and abandon plans for a rail link between Glasgow City Centre & Glasgow Airports.

It seems that the UK is suffering a panic attack when it comes to how we should use the roads. 

The politicians and the government favour congestion charging and effectively road rationing, forcing people out of their cars by making it prohibitively expensive.

The problem with this though, is that there are no alternatives.  And so the voting public stamp their feet and reject strongly all road pricing policies.

It’s a classic chicken and egg situation.  Governments & Councils are relying on the money from the congestion charge to fund the improvements in public transport.  And it doesn’t work that way.  The public and haulage/delivery industries need a viable method of travelling now, not in 5 years time when enough tolls have been paid to pay for some new trams.

Edinburgh is a city in traffic Chaos.  The residents voted against congestion charging back in 2005, and the tram works are currently substantially behind and substantially over budget, a tram network seems to have degenerated into a tram line.  And the road works and closure associated with this are bringing the city’s roads to a standstill.

Part of the problem is that Roads is a local government issue, which is why we see the big cities trying to persuade the public to vote for road charging, whilst the government quietly offers bribes to the councils in the background.

But our roads, by definition, are a national network, and therefore it would make sense for the problem of congestion and road usage to be addresses nationally, as one policy, instead of what we see here which is a bottleneck by bottleneck approach.  However such an approach, although sensible, will require a brave body to take it on.  Part of the reason that Scotland faces such a crisis point with the Second Forth Crossing is because no government, Westminster or Hoolyrood, have been prepared to face head on the contradictory demands of the local activists, the environmentalists and local authority politics.

I think that the changes to the Dartford tolls summarise the UK’s attitude towards road usage and charging simply and perfectly.  Increase the charges for other people to pay, but keep the local votes on side with a special freebie for locals.

The Road charging argument looks set to become the biggest example of nimby-ism that we’ve seen for a long long time.

The Top 10 Best & Worst Roads in Britain

The ministry of Transport has published it’s annual survery into the Road Conditions of England (2007), and we are bringing you here the top 10 in the best and worst roads.

The results show the percentage of the road network for each local authority responsible, that require further investigation.

The Best;

1. Reading 2%
2. West berkshire 3%
3. Blackburn 4%
4. Waltham Forest 5%
5. Hampshire 5%
6. Calderdale 5%
7. Medway 6%
8. Kensington & Chelsea 6^
9. Sutton 6%
10. Wokingham 7%

And the Worst;

1. Salford 66%
2. Lambeth 50%
3. Barnsley 49%
4. Windsor & Maidenhead 49%
5. Oxfordshire 48%
6. Worcestershire 47%
7. Leceister 47%
8. Luton 46%
9. Telford 46%
10. Rotherham 46%

One thing that stands out is the vast difference between the best and the worst performing authorities.  For example two different London Authorities, both with some of the busiest roads in England, but with hugely varying rates, 6% for Kensington & Chelsea, and 50% for Lambeth. 

So, if location isn’t impacting on the state of the roads, maybe it’s the local council’s spending priorities.  A review of political control of local authorities shows some very telling results with regard to this.

Of the top 10 local authorities with the best road condition, 5 are in the control of the Conservatives, along with a further 4 with no overall control by any particular party, the last one being in Lib Dem control.

A different political picture is shown for those authorities with the worst condition roads, of the worst 10, 6 are under Labour control, with 2 to each the Conservatives, and no overall control.

When the local councillors are lobbying for our votes there are many things included in the manifestos, lots of local issues, and also, lots of attention given to the national political priorities.  However, what this report shows clearly is that the choice of political party in our local government can have huge implications on the spend, and therefore quality of our local road conditions.

We are approaching that time of year when the number of road accidents increase quite dramatically, where potholes appear with overnight frosts, sudden railfalls washing debris and mud all over the roads, and minor issues such as leaves on the road can contribute to accidents.

So next time your local councillor is campaigning for the vote, ask them how high high road repairs are on their list of priorities.

Citylink Results show hope for Rentokills Parcel Division

Citylinks Q3 results recently published show that although the company is still a major loss making company, it is reversing some of the trends that have contributed to its previously stuggling history.

Citylink states that it still on course to make a £45 million loss for the 2008 year, however it is pleased to say that the losses are reducing by £1m per month due to cost reducing strategies including reducing the vehicle fleet by 10% and employee numbers by around 1000 during the last year.

A major turnaround as far as Citylink is concerned is concerning customer service.  In the year to April 2008 Citylink made £20m worth of credits to its customers, for late or non deliveries, breakages, losses etc.  Improving customer service has been a major target for Citylink, and recent results indicate that Citylink is now providing a 99% on time service, which is operational excellence as far as the parcel industry is concerned, as a result credits to customers for the next twelve months are expected to be 75% lower at only £5m.

All of this has been acheived in what Alan Brown (CEO of Rentokill) describes as a “rawly flat” market, with a worsening revenue trend.

The challenge for Citylink, and all of the parcel networks, will be delivering the Christmas parcels. 

Traditionally the spending for Christmas starts in November, and November’s parcel volumes show the start of the Christmas rush.  This year however, it looks as if November’s parcel numbers will show little or no increase on Octobers.  Alan Brown voices concern that there could be a “huge surge” in the last two weeks of December, and that the logistics and distribution industries are on “tenderhooks” waiting for the seasonal uplift to start.

The overall statement that sums up the entire industry very well is that it is in a “complicated situation”.  And that is a fair summary.

UK Motoring Costs rising year on year

Motoring costs have increased by 30% since 2006.

On average, the private motorist has seen increases in the cost of motoring of over 30% since 2006.  The cost of motoring in 2008 is set to be 14% more expensive than in 2007, and 2007 was recorded as being 16.2% more expensive than 2006.

 

The main factors in these cost rises are Fuel, and Road Fund Tax, 2006 seeing a massive 32.5% increase in the cost of tax for the average driver.  However, all of the main costs, with the single exception being breakdown insurance, have increased by substantially more than inflation.

 

This is feeding through the industry and resulting in the lowest number of new car registrations in recent years.  Of those people who traditionally replace their car with a new car, research by uSwitch shows a quarter will this time not be looking to purchase a new car, and will be instead replacing with a secondhand vehicle.  And those who do still intend to buy a new car are intending on downsizing their budget by an estimated £3000 each, due to economic uncertainty.

 

Recent UK market information shows that instead of consumers buying new cars outright, they are looking at other financing alternatives, including contract hire.  But then the major companies underwriting contract hires are arms of the big banks, and recent activities have shown us all that banks do have a tendency to act with their own interests at the forefront.

 

The motor trade is facing crunch time, it is probably one of the major industries that will be required to look at every aspect of their workings, and change or die.  If consumers can’t get credit, they can’t buy cars, instead maybe the motor manufacturers will need to supply their own credit lines if they want to shift cars, but most of the major car manufacturers are struggling to obtain credit as it is.   The big 3 American car manufacturers, Ford, GM & Chrysler are looking for a government bailout.  And it will be interesting to see if the US government is forthcoming with such a proposal. 

 

What will this do to the price of cars on the forecourt?  Will the lack of demand push the retail prices down?  Or will the reduction in production result in long term higher car prices.  Many argue that new car retail prices have been overpriced for years.

 

So will the UK motorist be looking at 2009 seeing another rise in motoring costs?  The indications at present look like this is likely to be the case, with the long term fuel price set to rise, the green taxes pushing up the tolls, and the road tax on the larger vehicles, and the insurance industry continuing their perpetual 10% a year increase.

Van Running Costs – How much does it cost per mile?

Same day and next day couriers price their jobs usually based on a set price per mile.  At present in the UK, this price is around £1 to £1.50 per mile, depending on the company that you use, and the load in question.

Many customers look at this and think that this is an extortionate rate, particularly when you  consider that many customers are comparing the courier price with the price of a next day parcel service.

So what makes up this price, apart from the obvious fuel etc, what other costs do couriers need to consider when setting their prices.

1. Fuel.  We’ll start with the obvious one.  This works out at around 102p per litre, for diesel vehicles with engine capacities over 2000cc.  If you have a well maintained van, the 30 mpg should be achievable.   Making the cost per mile around 15-16p per mile.
2. Depreciation.  Say a new van costs around £25,000, and in 3 years it has a resale value of around £10,000 then that’s £15,000 of depreciation that needs to be included in the costings.
3. Financing Charges.  Very few van drivers or couriers can afford to pay for a new van in cash, and so that means that there is either bank interest, loan interest, or HP/Finance costs to be borne.  These will average around £4,500 depending obviously on the deals and rates around at the time.  Currently, these are very thin on the ground.
4. Tyres, Parts, Servicing.  If you’ve got a brand new van, then you should be lucky and get away with around £600 a year on servicing and tyres.  If the vehicle is older then these costs are going to be increased.
5. Insurance.  Van insurance is not cheap.  Van drivers often pay higher premiums due to the “higher risk” they are exposed to by the number of miles that they drive every year.  The average car driver drives 12,000 miles per year, a normal courier will be looking at least quadruple that, maybe even upwards of 90,000 miles per year.  Couriers van insurance also carrier premiums for goods in transit insurance, to ensure that the products that they carry for their customers are properly insured against loss or damage.
6. RFT & Breakdown insurances.  A necessary, unavoidable expense for all road users.  And if you earn your living by driving, you need to ensure that you have cover to keep your vehicle on the road.

If you add up all of these expenses, and work out a cost per mile, it comes in around 83p.  But there are two  very important cost that isn’t included in the list.  And that’s time.  The time of the driver, ie his wages, and the margin that the company/business requires to contribute towards the businesses fixed costs and overheads (for example telephone, office staff, premises, bank charges etc).

So, when the courier is asking £1 a mile, it isn’t really that expensive, it’s simply a fair reflection of the costs involved, and unfortunatley many people (couriers as well as customers) have a tendencey to underestimate those costs.