30 November 2000
Bad weather, fuel protests and rail delays have made life tough for logistics operators. Cathy Hayward asks whether government transport policy is adding to the uncertainty
Businesses carrying goods around the country have had a rough few weeks. Progress on the roads has been slow. If they weren’t blocked by rising floods, or disrupted by fuel protesters on a go-slow, then high winds forced lorries to overturn or turn back.
Air cargo into Heathrow was disrupted by high winds as cancellations or diversions left freight stranded miles from customers. The ports of Dover, Felixstowe and Calais closed, leaving cargo bobbing in mid-Channel.
But this was plain sailing compared with the rail experience. Freight was brought to a halt in many areas by Railtrack’s speed restrictions and repair work, following October’s rail crash at Hatfield. Bad weather and gales flooded tracks and blocked them with fallen trees and debris.
Rail freight contracts were left in jeopardy as emergency timetables forced logistics operators to use the roads, as reported on page 7. But while late running or non-existent trains raised few eyebrows, the government’s reaction was surprising. Although the government declares it is setting a pro-rail agenda for freight, critics argue that recent actions will force businesses to abandon the railways for the roads, and so clog up the motorways even more.
A confused logistics agenda means procurement professionals and supply chain academics will be arguing even more fervently about agile versus lean supply chains.
The agile side has been handed more ammunition. Consider these recent actions:
Chancellor Gordon Brown’s pre-budget announcement was equivalent to an 8p a litre cut for fuel and mollifed protesting lorry drivers. The Freight Transport Association (FTA) acknowledged that British hauliers were on a level playing field with their French counterparts. But not with the Dutch and Belgians, according to the Road Haulage Association, which called for more direct reductions to fuel duty. If the chancellor makes more concessions, then transporting goods on the road will be an easy and inexpensive ride compared to rail.
Shortly before the pre-budget bonanza, London mayor Ken Livingstone abandoned plans to charge lorries £15 to enter the city centre, reasoning that business traffic in London was there for a direct purpose and simply charging more would not discourage it.
Shipping companies, keen to use rail more often, are put off by high prices and a lack of investment, according to Sarah Watkins, the FTA’s rail freight policy manager. She called on the government to do more to make rail freight more attractive and develop it in line with industry’s needs. Direct government intervention was crucial, she said.
But the government’s reaction to Railtrack’s predicament has hardly been supportive. It is no coincidence that Railtrack’s chief executive Gerald Corbett resigned soon after a meeting at Number 10, said Brian Jeffrey, senior lecturer in supply chain management at Coventry Business School. Wouldn’t the government have been better to publicly support Corbett rather than encouraging his departure and less experienced replacement?
But Railtrack has not helped itself. Before his departure, Corbett publicly blamed heavy freight trains for the cracked rail that caused the Hatfield crash. The FTA dismissed his claims as nonsense. Railtrack has also proposed that, in future, freight trains should travel on different rails to passenger trains. Logistics firms, already discouraged by the delays and cancellations caused by the current repairs, must be delighted at the prospect of years of work on the new lines.
Transportation problems may be encouraging firms to reconsider their rail freight contracts long-term, but short-term, firms were more concerned about being stranded without vital supplies. Suffolk County Council, which was left without heating oil and other supplies, was not the only one considering keeping higher stocks in future. Just as the September fuel crisis saw just-in-time policies being reconsidered, the bad weather, go-slows and rail disruption made many firms look at stockpiling.
If the government’s actions make road more attractive than rail, there will be a concomitant lack of investment in rail, making it a poor option. Roads will get even more choked up. In this climate, procurement professionals would be well advised to have contingency plans to deal with further interruptions in supply.