Review of the Waterways Freight Facilities Grant Scheme

The main purpose of the study has been to review the workings of the Waterways Freight Facilities Grant Scheme (Section 36 Grant). Views of industry and institutions regarding the use of canals for the movement of freight were obtained in a series of interviews, together with information on the workings of the Grant Scheme. Case studies were used to test the effect of possible changes to the Grant Scheme. During the period of the study the ramifications of the progress of the Rail Privatisation Bill through Parliament meant that the situation regarding the Section 8 Grant (the equivalent grant for rail freight facilities) has become somewhat fluid. Major revisions, extending the scheme to cover lorry miles saved on motorways, have been announced; an additional grant to cover track costs is also proposed for rail, but the method of application or assessment is not yet clear. In order to encourage more traffic to switch to using waterway in the medium term, we recommend that: -Section 36 Grants should be extended to cover the high quality road network (including motorways), and that a higher valuation should be placed on the benefits than in the case of Section 8 grants, reflecting the higher benefits of water transport relative to rail. -That a new "waterways operating grant" should be available to operators of waterway craft, also at a higher rate per tonne kilometre than the proposed rail track costs grant. -That the reduction in road accidents and congestion be taken into account when valuing the benefits of inland waterway transport. Even with these revisions, however, we conclude the Section 36 grants will have a modest effect, in general only diverting traffic to water where this does not involve transhipment. Also, few waterway flows offer the sort of long run contracts necessary to justify a grant. As a result, we conclude that, Section 36 Grants will have limited success in satisfying the Department of Transport's overall objective of causing goods to be moved by inland waterway as opposed to road "where this would be in the interest of any locality or of some or all of its inhabitants". In our view a more successful method of achieving the Department's objective in the long term would be to encourage firms receiving or despatching commodities suitable for carriage by inland waterway to locate in premises alongside the canal network. This is even more important where the company is engaged in the import of raw materials. Such a method would require changes to the guidelines on planning and industrial development

Measuring the Benefits Gained by Industry from Road Network Improvements

Over the last twenty years, physical distribution has gone through a revolution (McKinnon 1989). Changes in industrial structure, the power structure within the supply chain, service quality standards, marketing and production methods, heavy goods vehicle productivity and capacity, and road network quality have all played a part. External factors such as high real interest rates have made firms acutely sensitive to the costs of holding inventory and to the scope for inventory rationalisation. The purpose of this study is to examine the contribution of road network improvement to the restructuring of physical distribution. There is a particular policy context to this. At a political level, the Government attaches prime importance to the effects of road investment on economic growth (DTp 1989). But at the level of economic appraisal, it is questionable whether the Department of Transport's (DoT) procedures give adequate weight to the benefits to industry of road network improvements. The D.o.T. currently take account of the direct savings which accrue from road improvement schemes (Dawson and Vass 1974)(DTp 1981). This allows for changes in mileage related and time related operating costs, including depreciation, based on the simple assumption that time savings are translated fully into proportionate increases in utilisation of vehicles and crews (Nash 1974). Although at first sight, the existence of scheduling indivisibilities and delivery time constraints might be thought to make this assumption unrealistic, such evidence as there is suggests that it is not an unreasonable rule of thumb (Mackie and Simon 1986). Economic theory suggests that in addition to the direct transport cost savings from road improvements, some indirect "reorganisation" or "restructuring" benefits should also be expected (Mohring and Williamson 1969)(Dodgson 1973). As real transport costs fall, firms should respond by substituting within the production and distribution process so as to arrive at a more transport-intensive, but lower cost solution. The restructuring of the brewery industry into an operation with a few large plants is often attributed, at least in part, to improvements in the road network. A number of restructuring responses to strategic road investment may be listed:- - Centralisation of manufacturing or production - Concentration of distribution into fewer depots - Changes to inter-depot boundaries - Increases in market areas served by regional firms - Improvements in service quality (24 hour delivery, etc.) - Changes in distribution methods (e.g. satellite distribution) This list suggests that the indirect benefits are likely to be some mixture of economies of scale in production or warehousing, inventory savings, and added value to products. A number of studies have been undertaken in the past into the benefits from road network improvements. It is claim they played a part in the decline of road haulage rates between 1974 and 1984 of 27% (Turner 1987). Their effect on transit times and reliability has been demonstrated (Cooper and Tweddle 1988), as well as on the cost of quality of service enhancement (Walker 1988). Benefits gained in terms of larger trading areas have been revealed by studies of the major estuary crossings, such as the Severn and Humber Bridges (Cleary and Thomas 1973) (Mackie and Simon 1986). Quarmby's studies of a major retail grocery operation are of particular interest in this context (Quarmby 1989). He examines the effect of reducing the number of depots in a distribution system following improvements to the strategic road network so that each depot now serves a larger area. He finds that the total systems benefits from restructuring the distribution and depot network could exceed the direct transport benefits by 30-50%. He does not demonstrate that either his initial or final depot configuration is optimally balanced with the road network conditions. However, his study provided the stimulus for the research proposal to ESRC and to partner industrial sponsors

Preliminary observations on the use of a frame trawl in hydroacoustic surveys

Thirteen hauls were made during the hydroacoustic survey of the Ugandan waters of Lake Victoria from 7-19 February 1999. Ten of the hauls were made above the oxycline which was clearly visible as a strong echo on the echogram at between 25 and 35 m depth in most of the sampled areas. The remaining three hauls targeted the oxycline. Approximate equal weights of Rastrineobola argentia and Haplocromine cichlids were caught in total, but with marked differences between hauls. Near the surface R. argentia dominated the catches. In midwater Haplochromines were dominant. At the oxycline Caridina niloticus was abundan

The status of the artisanal fishery of Lake Victoria, Kenya, with notes on improvements to the catch data collection system

Catch and effort assessment surveys have been used to assess trends in fish landings in Kenyan waters of Lake Victoria since 1976. Landings reached a maximum of 200000 t annually in 1989-1991 as Nile perch, Lates niloticus (L.), catches increased due to an expansion in stock size and increased fishing effort. CPUE peaked at 180 kg boat day-1 in 1989 and decreased thereafter with increasing effort. By 1998 total Nile perch catches were half those at the beginning of the decade despite increased effort. Catches of Rastrineobola argentea (Pellegrin) have levelled off despite increased effort

Taxation of Road Goods Vehicles – An Economic Assessment

This paper reviews the current position, recent research and potential future areas of research relating to road track costs, with particular reference to Heavy Goods Vehicles. It opens with a theoretical discussion, which concludes that the appropriate basis for changing is long run marginal social cost, but casts some doubt on whether the existing cost allocation procedure achieves this. The main reason for this is the likelihood that the marginal capital cost per unit of traffic of coping with an increase in traffic volumes greatly exceeds the average capital cost per unit of traffic at the present time. The DTp method of allocating track costs is then outlined, and the sensitivity of the results to variations in a number of the key assumptions is tested. The results show that the DTp method may only be allocating HGVfs as little as half of their costs. Hence instead of covering their allocated costs by some 30% to allow for environmental effects, as the DTp. claim, it may be that these lorries are only meeting 65% of their allocated cost. The sensitivity tests that yield the above results reflect the following concerns: (1) FUEL CONSUMPTION DTp measures lorry mileage and deduces fuel used and hence fuel tax paid. However, their fuel consumption figures look implausibly high. We have used FTA figures instead. (2) TRAFFIC FLOW DTp currently allocate many costs to vehicle kilometres (e.g. drainage, winter maintenance, traffic signs etc.), but accepts that the demand for a new road arises in proportion to PCUs (passenger car units), i.e. giving more weight to lorries. Our view is that once a road is opened any general costs involved in its continued use should also be allocated by PCUs. (3) LORRY WEIGHTS DTp use lorry weights as reported on a self completion questionnaire, which naturally omit any overloading. We have used observed values from a large study in Cheshire. (4) CAPITAL EXPENDITURE DTp charge only what is currently being spent. Following cutbacks in all government expenditure, this amount is now some 50% lower than in the early 1970s. Since capital expenditure was roughly 60% of total road expenditure, this implies that cost allocations have fallen by 30% on this account. Our view is that even this understates the true long run marginal cost of road traffic. Although the precise figures are subject to much doubt, in every case there seems good reason to suppose that the proposition is broadly correct. Taken cumulatively, they would be sufficient to convert the existing overpayment by HGVs (which presumably is intended to reflect unquantified environmental costs) into a substantial underpayment. If the increase in road haulage taxation which these figures would imply is politically unacceptable, then there is a good case for corresponding action to relieve the rail and water modes of part of their infrastructure costs

Valuing the Attributes of Freight Transport Quality: Results of the Stated Preference Survey

This paper presents the results of a survey of fifty firms transporting ten commodity groups, using an interactive stated preference game to obtain values of the rate reduction necessary to compensate for longer transit times, poorer reliability and the use of intermodal systems. Generally, the pattern of results is as expected, with the quality of the transport service being less important for low value products in industries with high levels of stockholding, and vice versa. Quality requirements are also generally less stringent when products are moving to depots than to customers. In a critique of the method, some reservations are expressed both about the reliability of the results, andabout the high cost and time of the survey method. Nevertheless, we conclude that overall the approach has worked reasonably well, and yielded much valuable data; we know of no alternative method which could have yielded quantitative valuations in these circumstances

New Inter-Modal Freight Technology and Cost Comparisons

Freight carried by rail has traditionally been mainly low value bulk commodities. As Western economies advance the market for such freight services is at best static, and forms a smaller proportion of the total demand for freight transport. There is thus an urgent need for British Rail and other rail systems to develop practical and cost effective inter-modal systems, which offer high quality services to consignors of consumer goods whose premises are not usually connected to the rail network. The new developments are of two types. Either they involve transferring the body of a road vehicle from road to rail, or moving the complete semi-trailer of an articulated outfit by rail. Each system has disadvantages in terms of volume or tare weight when compared to road, but each system may attract different commodities. Though the costs of inter-modal systems vary, their cost structures have similarities, consisting of collection and delivery costs, terminal, and rail movement elements. The break- even distance of each system depends on the extent to which low rail haulage charges offset the other costs incurred. However, traffic will only be attracted to inter-modal in sufficient quantities to enable viable services to be provided over a limited number of long distance routes. These services must also approach, if not equal the competition in terms of quality of service attributes, particularly reliability, if they are to overcome customer resistance. To assess the distances over which these new inter-modal systems will be cost competitive a cost model has been developed. The paper decribes how the model works, and the sources from which data was obtained. A separate paper (Working Paper 276) reports on a study to find the value placed by shippers on quality of service attributes, and a third paper (Working Paper 286) brings the two together to reach conclusions on the future role of inter-modal systems

The track and external costs of road transport

1.1.1 The purpose of this study is to review: i) Developments in methodology and data regarding issues such as vehicle delay, accidents, overloading and valuation of environmental effects. ii) The likely effect of harmonisation of taxes within the European Community. iii) Future prospects regarding the level of spending on roads. iv) Alternative methods of dealing with social costs, including lorry routing, regulation and subsidy. v) Experience elsewhere in Western Europe and in North America. 1.1.2 We review the theory behind the allocation of road infrastructure costs, finding a number of items on which the current British approach can be criticised, in particular the treatment of capital costs on a pay-as-you-go basis. Comparisons with other countries suggest that the British system is relatively sophisticated, but this and other evidence suggests that the proportion of capital costs of new roads allocated to heavy vehicles is too low. 1.1.3 A spreadsheet model of the current British track costs allocation system is constructed, and the effects tested of proposed increases in road spending, of overloading, of the allocation those items of cost currently allocated on a vehicle km basis in accordance with pcu km and of the allocation of the external costs of accidents. It is found that, even without adjusting the treatment of capital costs, an increase in taxes on the heaviest lorries of some 30 % is justified, and on buses 60%. Evidence on the values of vehicle delay and environmental costs is examined but it is considered that these factors are not yet sufficiently well quantified to test the adequacy of the current 30% margin to allow for them. More work in this area is recommended. 1.1.4 The possibilities for harmonisation of vehicle taxation within the European Community are considered. Since Britain has a far higher level of taxation than most other European countries, any move towards harmonising tax levels would reduce taxes in Britain at a time when they should be increasing. Such moves should be resisted, but if they come then there would be a case for compensating action to relieve competing modes of part of their infrastructure costs

Transport in the Trans-Pennine Corridor: Present Conditions and Future Options. Interregional Study Working Paper 3.

This paper reports on a desk study carried out by the Institute for Transport Studies as part of a wider study of opportunities for inter-regional working in the trans-Pennine corridor, considering economic, environmental and transport issues. It draws together available information on transport and movement flows in the trans-Pennine corridor. These patterns of movement are examined from a broad perspective which considers intra-regional, inter- regional and international movements within and across the study area. The report proposes a regional package approach to transport, based on demand management and modal transfer

Report on third FIDAWOG Workshop held at the Triangle Hotel, Jinja, 29 March to 1 April 1999: summary of proceedings

The FIDAWOG workshop held from 29 March to 1 April 1999 in Jinja was the third major stock assessment workshop attended by most of the participants during the project. It followed two workshops, each of which lasted three weeks, held in 1998