BARGED UT
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Scottish timber hauliers claim a subsidised timber barge service is unfairly damaging their livelihoods—they want to see it axed.
• TARIFF REBATE SUBSIDY is available for "lifeline" shipping services to Scotland's western and northern islands under a 1960 Act. Shippers set a "commercial tariff" which is then reduced by 30/40% depending on the type of cargo and direction of carriage between mainland and islands. The Scottish Office pays the difference between the actual price charged to users and the commercial tariff to the shipping company. The bill for this has almost doubled in five years—from £5.3m in 1989/90 to an estimated £9.9m for the current year—fuelling speculation the Government wants it cut.
Hauliers benefit indirectly as users of RO-RO ferries covered by the scheme. On top of IRS, a grant is paid to Caledonian MacBrayne to cover losses on ferry services to the Hebrides and Western Isles which carry commercial vehicles as well as cars, loose freight and passengers. This ran to more than £6m in 1992/93.
• FREIGHT FACILITIES GRANT applies to inland waterways as well as rail transport. It aims to encourage companies to take heavy lorries off "environmentally sensitive" roads by helping them pay for rail or inland waterway freight facilities —rail sidings, jetties, cranes, rail wagons and associated land or buildings. Also known as the Section 8 grant, it is available throughout the UK but there has been little take-up: in England just 23.3m this year. Up to half the capital cost can be paid but the grant must tip the balance in favour of rail/waterways, and away from road haulage. Calculations allow "up to £1 for each lorry-sensitive mile saved". Urban roads are given a 50% heavier weighting than other roads. From April the scheme has been extended to cover motorways and inter-urban dual carriageways (at a rate of 5p/mile) and the DOT has increased the budget for the next three years. A total of £43m (including track access grants) will be available with additional allocations for Wales and Scotland, but Scotland's timber barging operation is not eligible. Glenlight MD Alex Fawcett is lobbying MPs and the Scottish Office for a change in the grant rules. Haulier Callum Boyd has failed to get a grant from any source so far, but hopes for some retrospective assistance from Highlands and islands Enterprise, which aims to encourage business in the region.
Sailing down the loch into the mist, the barge makes a prettier picture than an artic pounding down a country road. Argyll haulier Edward MacGinty loads this observation with sarcasm. The barge operation now transporting timber along the west coast and islands of Scotland threatens his business, he claims. And it is being kept afloat by government subsidies.
"I don't see why we should be paying so much tax when it's spent on someone competing directly with us," he says. MacGinty insists that the environmental claims for the barging service are exaggerated and conceal what is an inherently inefficient operation. He has forcefully argued his case to the Scottish Office and, seven months on, is awaiting minister I,ord James Douglas-Hamilton's reply.
MacGinty may be ignored as a voice in the wilderness calling for a level playing field for hauliers. But a change in Government policy may yet scuttle Glenlight Shipping's barge operation. Glenlight's supporters fear that a review of Scottish shipping services due to be concluded this month will lead to a cut in the 40% Tariff Rebate Subsidy (see box) for timber loads which is crucial to the service.
Discontinued
In January Glenlight discontinued its other bulk cargo services to the Highlands and Islands when the Scottish Office refused to bail out a £600,000 operating loss. One mode's loss is another's gain—the lion's share of this 60,000-tonnes-per-year operation is expected to switch to hauliers using RO-RO ferries.
Now Glenlight managing director Alex Fawcett and Scottish MPs are warning that a cut in the subsidy will scupper the barge service, sending thousands more heavy trucks scurrying down the single-track roads of the western Highlands. Reinforcing those fears is the suspicion that the review is designed to plot a course to privatisation for Caledonian MacBrayne, the shipping arm of the Scottish Transport Group (whose bus operations have been sold off). Left to market forces, the smaller shipping operators would sink, making CalMac more saleable.
The concern is shared by the Forestry
441 Commission, its customers and Highlands and Strathclyde regional councils. The commission is an enthusiastic supporter and has high hopes for Glenlight's barge service. It will help triple timber output from west coast forests over the next two decades to 900,000 tonnes a year. Between a third and a half—five times current levels—could go by sea, according to harvesting and marketing officer Hugh Insley.
The barge service makes harvesting of remote timber viable: physically in the case of some islands; financially, because the transport subsidy makes extraction profitable. And transporting the timber over fragile rural roads not designed for such traffic volumes carries a high environmental cost, Insley believes.
The commission and Glenlight calculate that transporting a tonne of timber by sea burns only 0.5p of fuel against 1.5p of diesel when it moves by road And the savings in wear and tear on the roads are also significant, they argue. Scotland's regional councils spend £120,000 per kilometre on average upgrading a minor road for heavy haulage.
They give an example from MacGinty's domain: from Torrisdale—on the Kintyre peninsula that stretches out south from Argyll—a 600-tonne barge load to Irvine, due east on the mainland, saves some 7,000 miles of road transport, "If we save the taxpayer a highly conservative 50km, or £6m, worth of haulage road, the advantages of barging are manifestly clear," they say.
Sensitive
MacGinty is not persuaded. There is a role for barges, taking timber from island forests, he concedes. But the most sensitive minor roads will not be spared thanks to the barge option, he insists.
It involves more trips between forest and barge because the need for truck-mounted cranes reduces the payload to 20 tonnes— and some of these trips are not so short as people think. Also, the timber needs to be handled three times before a second trip by road, from the barge to paper or sawmill— hardly the most efficient transport system, says MacGinty. Subsidy always carries inefficiency with it. "I'm totally opposed to subsidy. These things should stand on their own two feet."
He pulled out of timber harvesting two years ago because of falling prices and the high cost of the specialist machines, around a quarter of a million pounds. MacGinty now runs a dozen 38-tonners, with about 60% of turnover from timber and the rest general haulage. "We need the barges in the recession like we need a hole in the head," he says. His workload has been cut and rates squeezed as a result of the subsidised competition.
"They're getting 40% on top of the rate we're getting. If the Government" is going to continue with the subsidy it may kill off our business altogether," he says. "You can compete with other hauliers, but you can't fight the Government."
With two barging points in his area, MacGinty's is perhaps an extreme case. Other hauliers echo some at least of MacGinty's grievances.
"It's the old story—road haulage gets the side kick," says Ewen Bowman, based near Fort William, Where there's no alternative, the road haulier gets the work, but the barges would fail without subsidy. Archie Ferguson, a major timber and general haulier biased near Inverness, agrees. He complains that the barging option was cooked up behind closed doors and hauliers were not given notice that part of their business was under threat. But Ferguson says Argyll has probably been hit more than his operation.
Hauliers need not lose out, Glenlight and the Forestry Commission insist. The shorthaul work at either end of the barge voyage should be more attractive and profitable than long-haul journeys, often overnight, running home empty as much as 90% of the time, Fawcett suggests.
MacGinty dismisses this as nonsense. He claims backloads for about half of his return trips and says he will no longer be able to offer such competitive rates to his farmer and building trade customers. However, he mentions—while arguing the inequities of subsidy—that two hauliers loading and unloading a barge were paid more collectively than the commission pays him for an entire trip.
One haulier who endorses the Glenlight/Forestry Commission line that profitable haulage and barging are complementary is Callum Boyd, based near Fort William. He has invested about 160,000, without any grant (see panel story) developing a barge facility nearby on the shore of Loch Eil. As a timber contractor as well as a haulier running five 3 8-tonne Volvo artics, his strategy has
been to concentrate on premium short-haul work "rather than running a way down south and w" looking for a return
load back for which you only get peanuts". He hauls the commission's wood pulp to Inverness for the twice-weekly rail trip to Shotton in north Wales. It is also stockpiled by his jetty for 700-tonne bargeloads south to the Iggesund carton board mill in Workington. Incoming barges bring logs from island forests for BSW Sawmills nearby at Killmaffie. "So hopefully, we get a load both ways," he says.
Unpredictable
Boyd's workload is up 25% and the work is more profitable. However, the barging operation is prey to the region's unpredictable weather and needs to be developed and run more smoothly. He sees the sense of encouraging an alternative to trucks "up here on one of the poorest road structures in Scotland".
If the commission's calculations are correct, hauliers in the north of Scotland will carry as much timber if not more in the future.
Output there is forecast to grow from just over a million tonnes this year to a million and a quarter by the decade's end. Barging's potential is constrained by weather and geography. The eastern seaboard is hostile to barges and Grampian's forests are better served by roads. It may not placate Edward MacGinty, but most hauliers can continue to count on a steady trade in timber. And some will profit from serving the barging operation—subsidy willing.
17 by Eugene Silke