Wednesday 18th Sep 2019 - Logistics Manager Magazine

A sweet deal for all

Heightened van growth is good for business, but the UK market must address the knock-on environmental costs. Alexandra Leonards reports.

When walking down a city street, you might pass five, ten, maybe even twenty vans. Not that you’re likely to notice. They often fade into the background, like the cars, litter and noise that city dwellers are so accustomed to filtering out. In the depth of the hustle and bustle it might not be so obvious, but the number of UK vans is growing at a remarkably speedy and significant rate.

There are currently 4.6 million vans on UK roads – the market has grown by 59 per cent since 2000, according to The Society of Motor Manufacturers and Traders (SMMT). That’s almost double the growth of cars. The economic advantage of growing numbers is marked, with one in ten British workers using a van to carry out their work, bringing in £56 billion annually, SMMT figures have shown.

Although more vans on the road are certainly good for business, the consequences for city congestion and air quality are palpable. With legislative pressures intensifying, a happy balance between meeting consumer demand, and addressing the environmental issues associated with van growth, is critical to guaranteeing a sweet deal for all.

“Light commercial vehicles are big business and with the growth of e-commerce and home deliveries, vans are playing an increasingly pivotal role in the UK’s transport, logistics and delivery networks,” says Chris Read, light business line director at Iveco. “They provide the wheels for all the small businesses our economy is built on.”

From parcels and white goods, to furniture, post and medical supplies, vans are essential to the delivery of goods and meeting evolving consumer demands. The shift towards e-commerce, especially in the UK where we shop online more than any other EU country, has been a key driver of growth.

“The rise in e-commerce over the past two decades has prompted a phenomenal increase in the demand for vans, in particular for the e-grocery and courier and express parcel providers,” says Simon Neill, sales director, Mercedes-Benz Vans UK.

Linked to the thriving e-commerce market is a shift towards downsizing from lighter HGVs to vans. The SMMT says that businesses want to find more agile logistics solutions, particularly for deliveries into congested and restricted urban areas. The society also notes that most of the recent growth of the light commercial vehicle market has been at the heavier end, appearing to demonstrate that freight is polarising into very heavy HGVs and upper end LCVs.

The rise of self-employment has also been a stimulus for growth, with many small companies and sole traders relying on vans for their business.

Vans are crucial to the e-commerce market and contributed more than €675 billion to the European economy in 2017 – but there are concerns about the impact their growth might have on UK roads, towns and cities.

Transport for London (TfL) recognises that vans are vital for London’s economy. But it says that the rise in numbers has contributed to poor air quality, congestion and road danger. TfL attributes around one fifth of road traffic in London, and about one third in central London during the morning peak, to vans and lorries. And according to the public body, between 200,000 and 400,000 personal deliveries are made to offices in central London every day.

Earlier this year the Mayor of London and TfL launched a plan to help tackle some of the issues associated with growing van numbers in the capital. The plan aims to reduce the number of vans and lorries entering central London during the morning peak by 10 per cent by 2026.

To help meet this target there will be more click and collect points at London Underground stations, with TfL launching a tender to bid for space in their stations and open more parcel lockers across the transport network. TfL will also make land available for micro-distribution centres in key locations to support sustainable last mile deliveries areas across London. Alongside these plans, TfL will work with businesses to encourage them to offer ‘green’ delivery slots, where customers can choose a delivery window when drivers are already in their area.

DPD is already building an all-electric fleet and a new network of micro depots across the capital. These depots will cut both journey times and van numbers on the road. According to the parcel delivery company, this approach will reduce miles per parcel by 49 per cent and save 45 tonnes of CO2 per annum.

“Smarter and more diverse last mile delivery solutions could relieve congestion, as well as connected technology to optimise route planning and multi-drop,” says James Douglas, head of sales operations for Volkswagen Commercial Vehicles. “In addition, technology can help reduce ‘empty legs.’

“For example, in Germany there is a company called MOIA – its long term vision is for vehicles to bring people into cities at the start of the day to work, and then to travel out again with, for example, parcels and deliveries, to reduce empty transport on the streets.”

According to the SMMT, vans are not actually a major contributor to congestion, as they only account for 15.4 per cent off traffic. But it’s clear that regional variances exist, with vans making up more than 20 per cent of London traffic during morning peaks.

Congestion is a big environmental issue for cities and towns, but its impact on van mobility is also bad for business. Last year on average road users lost 178 hours in congestion, costing £1,317 per driver, according to a recent INRIX report. The SMMT says that this accounts for a loss of around 9 per cent of the week, costing vans around £6.5 billion. It says that high levels of congestion may result in companies employing extra people and more vehicles than would be needed if conditions were better; further exacerbating traffic in cities. It’s a vicious circle that needs to be disrupted.

This year the mayor of London launched the London Ultra Low Emission Zone (ULEZ) charge, which means that all vehicles passing through the zone in central London must either meet the stricter emission standards or pay a daily charge (in addition to the existing weekday Congestion Charge.)

“The rise in low emission zones and urban housing estates means that van buyers have to now be savvier than ever before and not only ensure that their van is right for the here and now, but that it is also appropriate for potential registration changes,” says Simon Neill, sales director, Mercedes-Benz Vans UK.

With the ULEZ expanding to the North and South Circular roads in Autumn 2021, van users must get used to the charges, or start to comply with emission standards.

According to James Douglas of Volkswagen larger fleets and organisations often have the expertise and capacity to build the ULEZ into their planning.

“We supply to some companies who have already done detailed area-by-area analysis on ULEZ costs and worked out what changes they need to make to reduce cost impacts,” he says. “Smaller operators will find this more of a challenge and ultimately may have to build this into costs that will be passed on to their customers.

“Although the scale will hit larger companies harder overall, in the short term this could definitely have an impact on SMEs.”

Mercedes-Benz’ Simon Neil says that the van community may need to start thinking differently if they have only ever bought one type of van before. “Perhaps right-sizing or changing fuels from diesel to electric will best serve their needs operating in an inner city in the long run,” he says.

The good news is that over the past five or six years, vans have become cleaner and more efficient than ever before.

“When you look back to Euro 1, then Euro 2 etc, and compare it to the Euro 6 vehicles of today, the improvements are vast,” explains Neil.

According to the SMMT, CO2 emissions produced by vans have decreased by 10.4 per cent since 2013. 96 per cent of vans still use diesel – so the important role that Euro 6 diesels play is clear. The Euro 6 diesel standard has also reduced NOx by 84 per cent, and particulate matter by 95 per cent, compared with the Euro 3 standard.

There is still a long way to go. Alternative fuels are still much cleaner than the cleanest diesels, but uptake remains low. However, legislation pushing van users towards alternative options, these figures are sure to improve further.

Earlier this year the government announced that car drivers with a category B driving licence will be able to operate alternatively fuelled vans, provided they complete a minimum of 5 hours additional training.

“We support the introduction of the legislation to make it easier for more drivers to operate Alternative Fuel Vehicles,” says James Douglas, head of sales operations for Volkswagen Commercial Vehicles. “There are already numerous barriers to cross to make the transition and by adding more layers of complexity through vehicle license issues, it’s another element which will slow the adoption of these vehicles.”

Vans are here to stay, and there are no signs that market growth will slow. But as long as there’s a move towards smarter and more efficient delivery in towns and cities, this doesn’t have to be a problem. The design of vans must be fine tuned, their time on the roads cut and the emissions produced slashed to achieve the happy balance between meeting consumer demand and improving energy efficiency on UK roads.

 

 

This article first appeared in Logistics Manager, July 2019.