On April 4, the long-awaited and much-debated Road Transport Directive comes into force. It's been seven years in the making, but still there appears to be widespread confusion around how it impacts on the food supply chain.
Speculation has varied wildly, from panic-inducing proclamations of escalating transport costs and severe driver shortages to point-blank denials that anything will actually change. As is usually the case, the reality probably sits somewhere in the middle.
In a nutshell, the directive limits a driver's working week to an average of 48h over a 17 or 26 week period (the latter subject to a collective or workforce agreement). Drivers cannot work more than 60h in any week and night work is limited to 10h, although this too is flexible, subject to workforce agreement.
The Freight Transport Association is unequivocal about who the legislation applies to. "There's no company in this country operating a truck that can afford to ignore it," says spokesman Geoff Dossetter.
But he does say it's been the bigger logistics companies and supermarkets that have got their act together, making pay deals with their drivers and reorganising their systems.
Unfortunately, it seems the smaller players haven't been quite so quick off the mark. Carol Broadbent, general manager at Wincanton, says: "I worry for the smaller hauliers and contractors who don't have central people management support and are really on their own interpreting the regulations."
So what challenges has the directive thrown at the food distribution industry? With drivers working an average of 55h a week, the Department for Transport originally estimated that an additional 12,600 vehicles and 21,900 drivers would be needed across the entire transport industry. But Ian Cooper, project manager for the directive with Exel, thinks the food and drink industry will get off more lightly than that, because driver terms and conditions tend to be modernised, so drivers don't work too far in excess of 48h.
In addition, relaxation of the directive to include periods of availability (time not driving) and longer night working softened its impact considerably.
As Wincanton's Broadbent says: "When we first looked at this legislation before the draft regulations were published, there was a whole host of scare mongering. Periods of availability and extended night working have reduced any cost impact to our business."
This is borne out by research conducted by Scala Consulting at the end of last year involving 5,000 drivers across 23 companies (Food Manufacture, March 2005, p24).
So for most sites the emphasis has shifted from reducing drivers' hours to logging and classifying their time. Exel has developed software which Cooper says serves two purposes: to ensure compliance and to better forecast and plan driver hours.
Refrigerated transport firm Noel Zwecker in Northern Ireland will use tachographs to record waiting time. This looks like the cheapest option, but somebody still has to draw the data from the tachograph and analyse it.
The company is also considering subscribing to a service offered by the Road Haulage Association, which eliminates the need to collate and analyse data. Subscribers download software on to their drivers' mobile phones. When drivers report for duty and each time the function of their duty changes, they just tap a message into their phone, which is transmitted to the main computer in the company's traffic office. The subscription cost is £1 a week per driver.
This is all well and good as long as time is accurately recorded and classified. Md Noel Zwecker is still concerned there might be cases where lorries are held up and some of that time might not be counted as availability. "Customers have a habit of telling drivers they'll be ready in half an hour and that runs into an hour-and-a-half," he says.
So rather than relying solely on periods of availability as a get-out clause, Noel Zwecker is working with customers to reduce waiting time and inefficiencies. For example, when a driver is loading small amounts from one or two pallets, the cold store is putting that stock in a central collection point to reduce loading time.
A nation-wide network of depots combined with overnight depot to depot movements has helped Yearsley Group reduce driver time. Depots are located close to the majority of manufacturers and retailers, allowing stock to be transported to a depot nearer the final destination prior to delivery. Yearsley says this enables it to meet booking times more accurately than if product had to be transported hundreds of miles.
Potter Group has found another way of minimising the impact of the directive. "If transport is over a long distance, the impact is far greater and there might be road congestion you can't plan for. So where possible, for long haul transportation we're adopting rail freight," says md Derrick Potter.
Greencore is one of the first food manufacturers to take advantage of Potter Group's rail distribution centres. On arrival in Felixstowe, imported raw materials are transported by rail to Potter Group's warehouse at Selby, which also serves as an inland customs clearance point. With Greencore's production facility just a mile away from the warehouse, ingredients can be rapidly shuttled to the production line and the empty containers filled with finished product to be stored in the warehouse until delivery to retailers.
But the vast majority of goods are still delivered by road. And even with periods of availability as a buffer, it remains to be seen whether all drivers will consistently stick to the weekly 48h average. So will that mean increased driver and vehicle numbers? And what will be the knock-on effects for food manufacturers that outsource their logistics? Scala's research found that the number of companies that believed they would need to increase driver numbers had dropped dramatically from 88% last July to 15% in December.
Exel has taken on more drivers and expects to recruit more, although Cooper says it is likely to be a modest number. "I'd be surprised if it numbered more than 100-150 across our total food business. It's certainly not on the scale of magnitude we once feared it might be."
Wincanton says pressure on costs is coming from wage inflation to maintain an existing driver headcount rather than from recruiting new drivers. But Broadbent believes this is linked to an overall issue of driver shortages, rather than the directive specifically.
But both Exel and Wincanton deny that the directive has had any real impact on operating costs -- at least not to the extent that they have had to consider customer price increases. "Despite the fact we're open book with our customers, it's still incumbent on us to ensure any costs are managed or mitigated before there's any discussion of passing on our residual costs," says Cooper.
John Perry, md of Scala, on the other hand, thinks cost increases are inevitable. "Logistics companies are working on extremely tight margins, so where they genuinely have cost increases, they will want to recoup that from their customers." And Zwecker agrees: "I think costs will have to be passed on to customers because transport at the moment is running on a knife edge."
Zwecker is also worried that strict interpretation of the directive here puts UK transport providers at a disadvantage. "Some businesses could go overseas as a result," he warns.
Cooper shares his concerns. "It's being implemented in parts of northern Europe, but the enforcement is such that it will have little effect. In other countries such as the Republic of Ireland, the government would appear not to have even agreed the legislative process for transposing the directive into law, let alone start that process. Potentially there's a skewed playing field."FM
Rack and column protection
Damage to racking caused by forklift collisions is a common problem for many warehouse managers. But now they can protect against such expensive and potentially life-threatening structural damage, thanks to the introduction of semi-flexible, moulded plastic guards that form a 'protective bumper'.
Rack Sentry and Column Sentry from Hi-Lo Storage Systems can easily be attached to racking or columns to minimise the force of fork truck collision.
Simply positioned in two halves, the Column Sentry is said to remove the need for expensive and difficult to install gravel ballast or concrete protectors.
Contact: Hi-Lo Storage Systems,
Tel: 020 8855 6000
WMS for the smaller warehouse
A 'mid-tier' warehouse management system has been launched for small and medium-sized warehouses in the range 1,000 to 6,000m2. The TrackTen system from ATMS complements its StockTrack Plus system for bigger warehouses.
TrackTen uses the latest touch screen colour hand-held barcode terminals, including equipment from Symbol, Teklogix and Intermec.
TrackTen is based on Microsoft SQL technology and works with Microsoft Great Plains, Navision, Sage, Baan, SAP, etc.
Tel: 0121 628 9000
- Exel01908 244000
- FTA01892 552222
- Noel Zwecker028 3752 2143
- Potter Group01353 646704
- Road Haulage Association01932 841515
- Scala Consulting01484 422084
- Wincanton01963 828282
- Yearsley Group01706 694620