Hauliers’ long journey to go green

One of our senior underwriters to the UK transport and Metals sector, Nicola Harris, discusses the challenges facing Hauliers on their transition to a greener future. Hauliers’ long journey to go green This World Environmental Day, Atradius’ senior underwriter to the UK transport and Metals sector, Nicola Harris, discusses the challenges facing Hauliers on their transition to a greener future. This World Environmental Day, Atradius’ senior underwriter to the UK transport and Metals sector, Nicola Harris, discusses the challenges facing Hauliers on their transition to a greener future.     [Asset Included(Id:1657030396006;Type:AT_Media_C)]     Without the UK’s haulage firms, the economy would grind to a halt. Last year, HGVs carried 1.65 billion tonnes of goods[i], delivering food to supermarkets keeping shops full and hospitals stocked with medicines. However, in recent months and years in particular, their job hasn’t been easy. From Brexit delays to increased fuel costs to the shortage of drivers, haulage companies have faced huge challenges. Many in the industry that my colleagues and I at Atradius speak to are having to adapt their business model to survive. Others tell us they’re operating with lower margins. Against this backdrop, they’re also attempting to navigate another costly, but essential change: the transition to becoming a greener industry. From 2035, all new HGVs weighing under 26 tonnes sold in the UK will have to be zero emission. The deadline for other heavier vehicles comes five years later. The sector is particularly under the spotlight: HGVs were responsible for 19% of the UK’s transport carbon emissions in 2020[ii]. Many are already working hard to reduce their emissions and become more efficient. Some are changing their business practices and introducing technology to improve the efficiency of their fleet operations, or coaching their drivers in behaviours to lower fuel consumption and emissions. A 2022 survey[iii] carried out by Neos Networks found that 94% of transport and logistics companies are committed to actively reducing carbon emissions by 2027. When operators were asked which technologies they planned to adopt, the most popular solution was battery electric vehicles, which more than half (55%) of companies considered the most commercially viable green solution.   Challenges As we’ve recently explored in our own research, there’s a lot that needs to change for the transport sector to be able to fully go green, particularly when it comes to hauliers electrifying their fleets. According to Logistics UK, in 2022, electric vehicles represented just 0.9%[iv] of the UK’s van fleet, although this is up from 0.3% in 2019. The likes of Tesco and Amazon have announced the use of a small number of electric HGVs in their fleets, but they’re far from becoming widespread yet. Infrastructure is a huge part of the challenge. Not long ago, the Society of Motor Manufacturers and Traders (SMMT) published a shocking revelation: the UK doesn’t have a single public electric charger dedicated to lorries.   [Asset Included(Id:1657030397223;Type:AT_Media_C)]   HGVs would require huge amounts of energy from the grid to carry heavy loads for long distances. It has been said that just ten battery-powered HGVs drawing electricity from the grid at the same time would have an energy draw equivalent of a small town[v]. Battery electric lorries aren’t the only green solution, of course. Alternatives include the transition to hydrogen fuels where the challenges are similar – there isn’t a hydrogen refilling station dedicated to lorries to be seen either. As well as poor infrastructure to support electric HGVs, a lack of financial support is also hampering efforts to go green. The biggest barrier to net-zero targets for 61% of transport operators is high investment costs, the survey by Neos Network found, followed by concern that some shippers are favouring lower costs over greener practices. Adopting zero emission vehicles, and the depot investments also involved, will come at great expense to hauliers, and the government is under pressure to provide more financial support. After all, the SMMT points out that the UK is behind many other countries when it comes to subsidies, with the likes of France and Finland providing grants of up to triple the size of support available to UK operators. Financial assistance is just one piece of the puzzle and the government is under pressure to announce a strategy to help the sector decarbonise. Certainly, some things are changing for the better – such as the government’s decision in May to approve the use of longer lorries on British roads, meaning more goods can be transported by fewer vehicles. The government estimates the vehicles will save 70,000 tonnes of carbon dioxide from being released into the atmosphere over 11 years. There’s clearly still a long way to go before the haulier industry will be able to fulfil its green ambitions but with deadlines looming, we’re likely to see significant change in the coming years.   [i] https://www.gov.uk/government/statistics/domestic-road-freight-statistics-july-2021-to-june-2022/domestic-road-freight-statistics-july-2021-to-june-2022 [ii] https://www.gov.uk/government/statistics/transport-and-environment-statistics-2022/transport-and-environment-statistics-2022#:~:text=The%20biggest%20contributors%20to%20this,of%20emissions%2C%2016%20MtCO2e%20) [iii] https://neosnetworks.com/resources/press-releases/freights_clean_future_94%25_of_uk_companies_to_go_green_within_five_years/ [iv] https://logistics.org.uk/media/press-releases/2023/may/lack-of-government-fiscal-support-hampering-ev-upt [v] https://www.theengineer.co.uk/content/opinion/comment-tesla-s-electric-semi-truck-is-not-the-holy-grail-but-a-hydrogen-powered-hgv-could-be/