Road freight transport - Paying its way?

Authors Avatar

ROAD FREIGHT TRANSPORT - PAYING ITS WAY ?

The taxation for heavy goods freight vehicles should reflect the damage they cause to the infrastructure and environment ; the logistics industry owes that at least to society.

 - Introduction -

 - I - How logistics industry cause damage

- Infrastructure

- Environmental costs

- Congestion

- Accident externalities

 - II - How to tax HGV

   - Directly on the vehicle

- Charges more directly linked to the road use

- Other charges and Fuel based

 - III - How HGV are currently taxed in Europe

- Eurovignette countries

- Countries with tolls on specific roads

- Countries with no direct road charging at all

 - Conclusion -

ROAD FREIGHT TRANSPORT - PAYING ITS WAY ?

- Introduction -

According to a British government report (BBC News 2000), one Heavy Good Vehicle (HGV) is estimated to generate £25,000 per year in taxes, but the problem is that the same vehicle can do £28,000 of damage every year. Indeed, in its current consultation paper on Modernising the Taxation of the Haulage Industry(*), the British Government states as one of its objectives that road users should contribute towards the true costs that they impose on society (CfTI 2001). Many specialists argue that a lorry causes much more damage than lighter vehicles, some claim that a HGV causes as many damage as 30 000 private cars, and other that a 40-tonne freight vehicle causes 60,000 times more damage to the roadway than a car (GFTM 2002). In any case, current HGV taxation does not take in account the real damages caused by this type of vehicle. This is the case in Britain but as well in all European Union countries. The best way to tax as efficiently as possible, is not yet known, because it is really difficult to determinate the real cost of HGV damages. If infrastructure damages are easily calculable, those which concern environment are very hard to estimate, because they are very variable depending on weather, congestion and peak-hour, the current vehicle condition, its motor type, its journey time, and so on. The other difficulty, once cost estimated, is to know in which way HGV will pay. Few methods already exist in EU, either directly on the vehicle or on road use but also through the Eurovignette. We will try, in a first part, to show the different damages caused by HGV, and in the second part, we will see different ways to charge HGV, on fuel and direct taxes, and in the final part we will see the illustration of the taxation in some European countries.

I - How logistics industry cause damage

All vehicles cause damages, but HGV are those which do the most, of course because they travel proportionately more on motorways and on trunk roads than cars but also because they are weighter, so they wear more roads, and their bigger engine make more noise and pollute much more, in particular during congestion time (CfTI 2001). For all these reasons, they damage road and environement much more, the following section deals with this matter.

- Infrastructure damage 

Transport infrastructure is defined as the physical and organisational network, which allows movements between different locations. These are the roads and the organisation of the traffic (e.g. police), (Link & Maybach 1999). Therefore, road damaging caused by heavy vehicles on the road pavement increases with the vehicle weight and axle load. Most taxes are currently based on the vehicle proportional damaging power (europa.eu.int). But, damages concern also all the road facilities (systems managing). Consequently, taxes which concern these damages should reflect the cost of infrastructure and regular maintenance. Unfortunately, today’s taxation and charging systems, in most EU country, are not linked to the entire cost. But, there are indirect charges (e.g fuel tax, vehicle tax) which are aimed at covering the total infrastructure costs (Link & Maybach 1999).

- Environmental costs

Environmental effects of road transport cover a wide range of different impacts, including the impacts of noise and emissions of pollutants (CO, NC, NO2) on human health, materials, wildlife habitats and landscape (DfT 2003). the effects of greenhouse gases emission occur from the local to the global scale, and depends on which geographical location the pollution was done, for example, when the weather is nice in Mexico city, air pollutions there, are multiplicated because of the heat. In the other side, when a lorry crosses a tunnel, the noise made is very low for people living in the closest area. The impacts on enviroment depend also on the vehicle category, condition and location during its journey. Moreover, environmental damages caused by transport activities may be instantaneous (noise), but also extend far into the future to several hundreds of years (greenhouse gases) (Ricci & Rainer 1999). Again, current taxes on lorries, do not reflect the real damage they cause to the environment.

Join now!

        Pollution

The first dimension of the environmental impact is air pollution, the transport sector accounts for about 23% of total carbon dioxide emissions, and within this, road traffic is one of the fastest growing sources. While, road transport accounts for the highest proportion of all CO2 emissions from transport (CfTI 2001), the European Council and the European Parliament have targets to reduce CO2 emissions from motor vehicles by 2010 (EDIE 2002). A relevant share of the damage caused by emissions of air pollutants does not occur near the emission source, but, after transport and chemical transformation of the pollutants, hundreds or ...

This is a preview of the whole essay