UK Government says it is set to allow unlimited cabotage within a 2 week period
The UK Government says it is “set to bolster supply chains by extending cabotage rights". The move would bring generate much needed capacity, but potentially allow European hauliers to cash in at the expense of British hauliers.
As it stands, the current UK-EU trade deal allows EU hauliers to perform two extra cabotage operations after delivering a load into Britain. This compares to the three cabotage operations that are permitted within EU member states (although ‘cooling off periods’ limit the amount of times this can be done).
Given the Brexit border friction and the likelihood of having to come back with an empty load, many European haulage firms have said they would need to do more cabotage in order to make trips to the UK worthwhile.
Trans.INFO has of course been reporting on this possibility for some time.
Maciej Wroński, President of Transport and Logistics Poland, told Trans.INFO two weeks ago that going back to the previous cabotage arrangement, which allowed for 3 trips, is the “only solution” for the level of the supply chain problem the UK has. In his opinion, Britain has never been self-sufficient in terms of transport.
Last month, we also spoke to Michael Clover from Transport Intelligence about the issue and Europe’s driver shortages. When asked if a relaxation of cabotage rules would make a difference, Mr Clover said that it was difficult to judge. Even so, he told Trans.INFO “it certainly wouldn’t hurt”:
“It’s an interesting question. I think we also have to consider that, obviously, there’s always been a disparity and a trade imbalance between the UK and the European continent. So, there would have to be quite a strong incentive to make it more worthwhile to send your trucks across into the UK, even a couple of extra trips within the UK market, to make what would probably be an empty load back worthwhile. It certainly wouldn’t hurt if companies were able to do that.
Even so, when you consider the structural problem in terms of the international drivers, the fact that there’s a driver shortage and high demand across the rest of Europe, moving your capacity into the UK market and then not having a load coming back, or 60% not having a load back, is not very appealing for many companies.
What would change things, however, would be those freight rates on the load into the UK being high enough to balance out the fact that there’s no backload. I think that’s more likely to incentivize more companies to do it.”
Would European road transport firms be keen on cabotage? So far, there have been mixed signs.
Dutch companies have openly talked about the possibility of helping British supply chains by doing more cabotage. A fortnight ago, over 30 Dutch hauliers wrote a letter to Prime Minister Boris Johnson that called a for a relaxation of cabotage rules.
In the letter, Ewals Cargo Care, as well as 30 other road transport firms from the Netherlands, argue that cabotage rules should be changed to allow more hauliers to support the UK transport market and increase the productivity per truck.
However, one of Europe’s largest road transport firms does not appear to be that keen on the idea. Roland Hegyesi, commercial director at Hungarian haulage and logistics company Waberer’s International, says any changes to the rules would just reduce capacity on the European continent:
“Currently, driver shortage is peaking in England, but the whole of Europe is struggling with the problem. Therefore, if we allocated our resources and used our existing fleet to serve England, it would cause similar symptoms in other markets as the crisis now in Britain,” – Hegyesi told Trans.INFO.
According to Waberer’s commercial director, there is a shortage of transportation capacity in the UK market at the moment. Indeed, Hegyesi adds that a reduction in the amount of transport required from Britain’s automotive sector “is the only reason that capacity has not yet collapsed despite the increased demands.”
“If Waberer’s or any other carrier starts to tie up its capacity with UK domestic transportations, it will not be able to serve its customers in other markets, so this is not a solution for any parties. Moreover, I think the crisis in England is unmanageable in the short term and will continue to deteriorate during the peak season as demand rises,” says Hegyesi.
At the time the aforementioned quotes were made, the possibility of relaxed cabotage in the UK was just hypothetical. However, the UK Government has now officially declared that it is looking into the idea.
In a statement describing a consultation on the relaxation of cabotage rules, the UK Government said the change could result in “thousands more” HGV deliveries each month, thereby bolstering supply chains.
In what some will see as an eye-opening proposal, the plans do not merely allow one or two more cabotage operations to take place. Instead, the proposal allows for unlimited cabotage operations within a two week period.
The changes, which are subject to a one-week consultation, would come into force towards the end of this year for up to 6 months.
According to the official consultation text, hauliers from Belarus and Morocco would also be able to take part:
“This change would also mark a departure from the principle of reciprocity (equal rights on both parties in an agreement) as UK-based hauliers would gain no more rights as a result of this move. This includes in the context of the EU. Operators based outside the EU (for example, from Belarus, Morocco, Norway, Russia, Serbia, Switzerland, Turkey or Ukraine), although present in the UK in low volumes, would gain disproportionately high rights per lorry present.”
The UK Government says the relaxation would apply to “all types of goods” but is likely to be particularly beneficial to food supply chains and goods that come via ports.
Commenting on the plans, Transport Secretary Grant Shapps said:
“The long-term answer to the supply chain issues we’re currently experiencing must be developing a high-skill, high-wage economy here in the UK. The temporary changes we’re consulting on to cabotage rules will also make sure foreign hauliers in the UK can use their time effectively and get more goods moving in the supply chain at a time of high demand.”
The announcement from the UK Government comes after it emerged earlier this week that only 20 lorry driver visas had actually been processed.
Reacting to the news on Twitter this evening, RHA Policy Director Duncan Buchanan said the proposals would put further pressure on lorry parking.
As recently as last week, Buchanan put things a bit more bluntly. He tweeted it would be an “abomination” to do a general relaxation of UK cabotage rules:
Cabotage rules set by TCA. It would be an abomination to do a general relaxation of UK cabotage rules. Selected special transport where general cabotage rules are absurd could be permit controlled (concert tours under ATA carnet is one), UK & EU side. @RHARichardB @transportgovuk https://t.co/acTHPuGuxf
— Duncan Buchanan (@RHADuncanB) October 5, 2021
It nonetheless appears that this “abomination” is very close to happening.