Decoupling of Road Freight Transport and Economic Growth Trends in the UK: An Exploratory Analysis

Abstract

Between 1997 and 2004, gross domestic product increased in real terms in the UK by one‐fifth, while the volume of road freight movement remained stable. This suggests that the long‐awaited decoupling of economic and freight transport growth has begun, possibly leading to a new era of sustainable logistics. This paper reviews previous research on the decoupling issue and recent trends in gross domestic product/freight tonne‐km elasticities in Europe and the USA. It then examines 12 possible causes of the observed decoupling in the UK using published statistics from a wide range of British and European sources. This analysis indicates that around two‐thirds of the decoupling is due to three factors whose impact can be quantified: the increased penetration of the British road haulage market by foreign operators, a decline in road transport’s share of the freight market, and real increases in road freight rates. Several other factors, most notably the relative growth of the service sector, the diminishing rate of centralization, and the off‐shoring of manufacturing, appear to be having a significant effect, though this finding cannot be measured on the basis of available statistics. The paper concludes that, while the decoupling is in the right direction from a public policy standpoint, the net environmental benefits are likely to be quite modest.

Acknowledgement

The author would like to thank the two referees for their constructive and insightful comments on this paper.

Notes

1. As the present paper views decoupling from a road freight perspective, modal split is defined here as the division of freight tonne‐km between road and alternative modes.

2. In trucks with a gross weight of 3.5 tonnes or more.

3. Transport intensity has several different definitions in the literature (e.g. SACTRA, 1999; Banister and Stead, 2002). In the present paper it is defined as the ratio of freight tonne‐km to economic output.

4. This modal split stage in the framework is oversimplified as different modes have different handling factors and average lengths of haul. No mode‐specific handling factors values are available for the UK over 1997–2004.

5. The modal shift cell is exceptional as it shows changes in a percentage value (i.e. road’s share of the freight market) and not an absolute value. This explains why the average exponential growth values do not sum from left to right across the bottom of the diagram.

6. A new system of stratified sampling was introduced in 2004 to the Continuing Survey of Road Goods Transport for vehicles with gross weights of 33 tonnes and above. This is unlikely to have affected the tonne‐km estimates. The decoupling of the road tonne‐km and GDP trends was also well established before this change in sampling method took effect.

7. Note that shortening product life cycles may also, other things being equal, accelerate economic growth. This would tend to have a neutralizing effect on the tonne‐km/GDP relationship.

8. No comparable data are available for the period since 1995.

9. Input–output tables indicate the level of external expenditure on different modes of transport and differentiate service from non‐service sectors. The UK tables do not distinguish expenditure on freight and passenger services, however, nor is it possible to estimate the level of in‐house expenditure on transport using this data source.

10. The CSRGT monitors the movement of freight within the UK by British‐registered operators. The only international traffic it covers are the UK legs of cross‐border journeys operated by British carriers.

11. Cabotage penetration rate is defined as the share of cabotage transport in total national transport, where total national transport is the sum of national and cabotage transport (by country in which cabotage takes place). (Sciullo and Smihily, 2005).

12. These handling factor estimates, like the value density figures discussed above, were imputed from international trade statistics. They are, therefore, subject to the same caveat issued by Kveiborg and Fosgerau (2004).

13. The Road Transport Directive is the application of the EU Working Time Directive to mobile workers in the road transport sector. It imposes restrictions on drivers’ working time.

14. The average length of haul does not measure the mean trip length. Trips lengths relate to vehicle movements whereas the average length of haul applies to freight consignments. The two measures are, nevertheless, quite closely correlated.

15. Expressed as “the ratio of actual goods moved to the maximum tonne‐km achievable if the vehicles, whenever loaded, were loaded to their maximum carrying capacity” (Department for Transport, 2005c, p. 28).

16. The Department of the Environment, Transport and the Regions (1998, p. 21) admitted it was “unable to model the elasticity of road freight traffic with respect to unit costs directly” and based its estimate on a review of previous research.