Chemicals firm to 'flag out'
Page 9
If you've noticed an error in this article please click here to report it so we can fix it.
by Karen Miles • A major chemicals manufacturer threatens to embarrass the Government twice over, by dropping plans to shift freight onto rail in favour of a "flagging-out" strategy that will strengthen its road fleet.
In a U-turn prompted by expected rises in Vehicle Excise Duty in March's Budget, Albright & Wilson says it is
looking seriously at the benefits of basing up to half the trucks it uses in Ireland.
If the company goes ahead, it will end plans to switch up to 40,000 lorry journeys a year from road to rail—and the Government's chance to announce the largest railfreight grant of all time in an industry widely considered to be among rail's best potential customers.
Basing up to 40 trucks—half its fleet—in Ireland would save Albright & Wilson up to £160,000 a year, in addition to the savings from cheaper fuel bought in Ireland. If the company then gained payload by operating 40-tonne vehicles from Ireland instead of lowerVED 38-tonners, it would save a total of £625,000 (12.5%) of the vehicles' £5m-a-year running costs.
"If we can do this trick it puts a nail in the coffin of rail," says an Albright & Wilson spokesman.
Management at the company is exploring whether its chief contractor, NFC-owned Tankfreight, could register up to 40 trucks in Ireland while retaining British drivers.
The moves are inspired by from the likelihood that Chancellor Gordon Brown's forthcoming Budget will inflict a large rise in VED costs for road-damaging 40-tonne trucks on five axles. Such a rise was signalled last summer when the Government published its Transport White Paper.
The Road Haulage Association is soon to publish a report on flagging-out. So far it appears a vehicle can only be based abroad and work within the UK if it is making an international journey or working within cabotage regulations. These say the vehicle can only remain "temporarily" in the UK—RHA lawyers are working to clarify what that. means.
The Department of Transport this week says if a company is considering moving its fleet and dropping rail it would be "keen" to discuss the issue.