Freight and logistics is a highly reactive industry which operates on tight profit margins, and as such is highly risk averse and resistant to change. However, the rising clean air agenda, with its revised focus on heavy goods vehicles as defined in the Government’s recent Road to Zero strategy, and the increasingly demanding consumer, are driving the industry towards rapid change.
Recent TRL research on ‘The Future of Freight’, and our ongoing industry engagement within the sector through both ECOStars (a fleet recognition scheme) and the Government’s Low Emissions Freight and Logistics Trial (LEFT), suggests that market forces will be highly formative in the sector. This could lead to changes in operational practices and the vehicles used to provide services.
The most dominant force likely to shape the industry over the coming years is the clean air agenda which is being imposed at the local level in the form of Clean Air Zones (CAZ).
The tight margins on which the freight and logistics industry operates makes it highly sensitive to economic change, therefore the charges introduced as part of CAZ being implemented within the UK’s most polluted cities will force operators to consider new cost-effective solutions.
In a similar fashion to the larger nation-wide bus operators, larger multi-national and national freight and logistics operators will likely redistribute vehicle fleets compliant with CAZ emissions standards (Euro VI and ultra-low emissions vehicle technologies) within CAZ cities; resulting in lesser performing vehicles being deployed to non-CAZ cities and the countryside.
Operators who are unable to stomach the costs of fleet upgrades and who are more risk averse to the purchase of new vehicle propulsion technologies will likely seek solutions such as urban consolidation centres whereby the final journey is made by the consolidation centre operator using electric vehicles which are well-suited to short-range deliveries within urban areas, thereby avoiding charges and maintaining business-as-usual. This model will probably result in a larger embedded delivery cost for consumers in CAZ cities, and shift the risks of cleaner vehicle investments onto other operators.
Whilst some operators will adapt to the new legislation there will be some for which the impact of the CAZ agenda will be too much; independent operators are likely to be the casualties of the clean air agenda. We have already witnessed a number of small operators electing to go out of business in anticipation of CAZ.
If this trend were to continue nationwide it is likely that the industry will take the form of fewer, large logistics operators providing a larger range of services over wider areas. Although controversial and anti-competitive, this may result in a more sustainable sector since the provision of greater and broader services by fewer companies would allow operators to consolidate shipping volumes into fewer (potentially cleaner) vehicles. This would have the combined effect of delivering emissions reductions and importantly reductions in traffic volumes which are threatening the capacity of urban networks, which in turn are hampering the economic development of urban areas.
The second most influential force shaping the freight and logistics industry is the notion of on-demand freight driven by customer demand. Such attitudes have forced the industry to adopt otherwise unsustainable operations which result in poor utilisation of lorries, and a growth in freight vehicles on the roads. Under-utilisation of the available load space within lorries is not a new issue and has been one which operators have sought to address, but have been unable to resolve effectively due to poor knowledge of where and when empty running miles will occur between operators.
New vehicle technologies such as connected and autonomous systems, provide a means to overcome this issue. In a world where all vehicles are tracked and monitored by networked devices it becomes possible to identify exactly where and when freight vehicles are going, along with the prospective space which will become available as its delivery round is completed.
Such visibility of space would enable an automated/autonomous system to dynamically reschedule a freight vehicle to make additional collections and deliveries along its route as and when new customer demand occurs. Such technological applications could reduce the number of vehicles required on the roads whilst also reducing the number of vehicle miles generated as a result of diverting vehicles within the vicinity of customer demand to make collections.
The combination of new vehicle propulsion technologies, and connected and autonomous technology applications, are enabling the freight and logistics industry to adapt and change to the increasingly demanding and environmentally conscious society of the future.
TRL is currently involved in research that includes HelmUK, the UK’s first HGV platooning trial which will see three articulated lorries equipped with automated following technology on the UK roads within the next two years; the Low Emissions Freight and Logistics Trial, which is trialling 19 low and zero emissions vehicle technologies nationwide including biomethane fuels, hydrogen-dual fuel and electric vehicle technologies; and a study of autonomous urban freight vehicles.
While the widescale adoption of such solutions may be somewhat distant, our work at TRL clearly demonstrates a strong willingness for the industry to adapt and evolve for the future into an industry potentially very different from the one we see today.
Gavin Bailey is Technical Lead and Business Development Manager for Transportation Sustainability & Operations at TRL. He is speaking on the future of freight from the Burges Salmon stage at 16.30 on 7 November
Dr Gavin Bailey – Technical Lead, TRL