Tag Archives: haulage

More News On RET And Hauliers

cargo containers

Graham Laidlaw of Transport Scotland Ferries Unit flew into Tiree on the morning of Monday 30th January with Cllr Mary-Jean Devon and Cllr Roddy McCuish of Argyll & Bute Council, to meet 20 or so delegates representing the crofting, fishing, construction, retail, tourism and haulage sectors on Tiree and Coll.

The purpose of Mr Laidlaw’s visit was to listen to the islanders’ views on the government decision to remove commercial vehicles from the existing RET scheme. Mr Laidlaw left the island with a petition of 233 signatures.
In a well prepared, composed meeting, the Tiree community made its view clear that this decision will be ‘catastrophic’ for the economies of Tiree and Coll and will leave these fragile islands at ‘breaking point’ with unmanageable increases in costs for businesses and individuals.

Fuel prices, already 25ppl higher than the mainland will go up by another 1.25ppl. Tommy Barbour fuels has been quoted an increase in his ferry ticket from £214.80 to £370.80 for a tanker of fuel to the island. The cost of exporting livestock, the backbone of Tiree’s economy, will increase by 103%. Donald Morrison of United Auctions advised that this is going to make it very difficult to keep customers coming to the island to buy livestock. Small fishing businesses and croft businesses stand to lose £5 – 7 thousand a year. Iain MacKinnon of I.A. MacKinnon Haulage advised that the price of an articulated lorry carrying general goods will double. These costs will be passed onto customers increasing prices of building and agricultural supplies, coal, food and so forth.

Contrary to the government’s justification for its decision that ‘savings from RET have not been passed on by hauliers’ and ‘haulage is largely insensitive to RET’, there is a united view across all sectors that this is not the case. There was unanimous agreement that without RET freight prices would have escalated alongside the increasing costs associated with the industry. Tiree builder Angus MacKinnon pointed out to Mr Laidlaw that freight to Tiree and Coll is ‘ring-fenced’ and not driven by the price of the ferry tickets. Hauliers working on this route are providing life-line services carrying essential goods such as fuel, food and animal feed and exports of shell-fish and livestock. Councillor Mary-Jean Devon pointed out that she was ‘amazed that the government even expected there to be an increase in freight volume due to RET’. It was pointed out that whilst tourist traffic has increased during the RET pilot, tourist spending had not. Tiree was ‘full’ in the high season before RET and is still full. RET has encouraged the same number of visitors to bring extra or larger vehicles and trailers.

The notion in the Draft Ferries Report that tourism has seen the greatest benefit from RET has not been properly researched and the statement is distorted. Proposals put to Mr Laidlaw at the conclusion of the meeting were:

  • Ministers could simply instruct CalMac to increase fares across the board by a modest percentage to claw back the £2 million shortfall in the budget for RET.
  • That the implementation of the proposal be postponed pending full consultation on how the decision will affect the island economies.

Alan Reid, MP for Argyll & Bute has decribed the Scottish Government’s plans as ‘Outrageous ’. He told An Tirisdeach
“they are robbing Peter to pay Paul. I have written to Scottish Transport Minister Keith Brown pointing out that his proposals will increase the cost of living substantially on the affected islands. I have urged him not to go ahead with these proposals”.

Professor Neil Kay, an Economist at Strathclyde University said that the Scottish Government’s policy on cheap ferry fares is economically illiterate and misguided. He said
“What is the point of offering a shop assistant cheap fares to the mainland if she cannot afford those fares because the business she worked for has just gone bust? You do not need an economist to answer that question – just common sense. No self-respecting economist would support RET as a device to get fares down.”

RET And Hauliers

road to the oceanThe Tiree Branch of the Scottish Crofting Federation have been in touch with Keith Brown, Transport Minister in the Scottish Government, with regard to the removal of RET on Commercial Vehicles on ferries. The plan is to replace RET with an amended system of the former “bulk discount rate” which had been in place prior to the introduction of the RET pilot three years ago.

While RET is now extended to vans five metres or less in length, the fact is that most commercial carriers use vans six metres and over in length as five metre vehicles are few and far between. Crofters fear that the Scottish Government is sacrificing the former commercial RET for the sake of introducing RET to other islands without putting any more money into the scheme. One crofter said it does`not bear thinking about what the cost of freight to the island will be if RET is not reintroduced to commercial vehicles.

The Scottish Government report “Assessment of the impacts of the road equivalent tariff” pointed out that RET has made a positive impact on haulage businesses by lowering costs. The reports states that hauliers recorded savings amounting to an estimated 50% of ferry costs, and that whilst all of these savings might not have been passed on to the customers directly it allowed hauliers to offset other increased costs and therefore enabled prices to be pegged where they would otherwise have increased. Despite this, the Scottish Government recently announced the exclusion of commercial vehicles from the newly-extended RET, announcing instead that they would ‘replace RET for larger commercial vehicles on the Western Isles, Coll & Tiree, with an enhanced pre-RET discount scheme’. There is widespread concern that islanders will lose out heavily as a result of these proposed changes. David Muir of the Scottish Crofting Federation said:

“the SCF are calling on the Scottish government to provide urgent clarity on the situation as we are concerned that a reintroduced discount system could take away a great deal of the support that RET has brought to smaller hauliers. Any resulting increase in ferry fare cost will be passed on to customers.”

. Mr Muir concluded that “to support the fragile island economies what is needed is a fair syatem that retains the cost savings for hauliers and other commercials gained in the RET scheme”.
MP Angus MacNeil has called for clarity quickly on the new proposed ferry fares for hauliers if the government continues with its current proposal to get rid of RET for lorries. He said “the decision to remove RET from the hauliers is a mistake. The removal of RET will ultimately lead to an increase in prices for customers in our islands. I will be pressing for a meeting with the trasnport minister early in the year. Meanwhile a campaign group, hauliers for RET, has been assembled to both work on the RET case and to dispel the myth that arose in Edinburgh that island hauliers did not want RET. If this is not sorted freight costs and prices will go up which could ultimately impact on jobs” David Wood, the spokesman for “Hauliers for RET” commented that
“RET has benefited the islands and to remove it from the haulage industry will be detrimental to the whole community. Ultimately our customer will have to pay.”
The Scottish Ferry Services Draft Plan for Consultation states in the short term we are replacing RET for larger commercial vehicles on the Western Isles, Coll and Tiree, with an enhanced pre- RET discount scheme because:-

  • The RET evaluation report shows that savings made by hauliers through RET have generally not been passed on to the consumers.
  • In 93 per cent of cases, the reduction in ferry fares arising through the RET Pilot have been wholly or partially absorbed at some stage in the supply chain, without being fully passed on to customers. Only 7 per cent of firms in the sample of businesses indicated that the savings had been passed on in full throughout the supply chain from both their suppliers and on to their customers.
  • The cost of rolling out RET to larger commercial vehicles is an estimated 40 per cent of the total cost of RET. ? Before the introduction of RET, hauliers received discounts to their fares up to a maximum of 15 per cent dependent on their volume of business with CalMac. Island hauliers told us when we rolled RET out that they were concerned mainland hauliers would be able to compete more effectively with them now that the same discounts applied to all hauliers. We will reinstate the pre-RET discounts that were enjoyed by hauliers and increase for the Western Isles, Coll and Tiree the maximum discount from 15 per cent to 25 per cent.
  • For the Western Isles, Coll and Tiree the Government is considering how to extend the current discount eligibility criteria for hauliers.
  • The Government is open to discussing with businesses which use larger commercial vehicles the most equitable formula which could be used to apply these discounts so that they benefit both larger and smaller companies.
  • These improvements to the discount will be made for the Western Isles, Coll and Tiree only, where hauliers have received the RET discount since October 2008. While the discount has not been passed on to consumers we accept that in these difficult financial times some hauliers may find it difficult to now pay a fully increased fare. The increase to the maximum discount reduces the impact on these hauliers. We will revisit the discount again when we renew the Clyde and Hebrides contract in October 2013.
  • We will look in the next CHFS tender to extend the current definition of a commercial vehicle from 5 metres to 6 metres. This will be consistent with the position in the Northern Isles