The rising cost of roads
How new plans to ease congestion could make roads more expensive
There are some truths about modern day supply chains that many of us would rather not recognise. One of which is that roads are increasingly becoming overcrowded. There are now 10 million extra cars on the road than there were in 1995 and infrastructure has not grown significantly to support this.
This issue is most noticeable in larger cities like London where average speeds in the greater London area has dropped from 20 mph in 2013 to 17 mph in 2016.
Congestion is certainly an issue but is manageable at the moment. What is perhaps more concerning for supply chains is the methods that are being introduced to ease this congestion. Governments and city councils around the world are taking greater notice and are suggesting more radical solutions for dealing with it; many of which involve increasing costs to motorists. It is very likely that in the next 10 to 15 years all supply chains will be dealing with these policies, so it is worth preparing now to avoid costly shocks in the future.
Why the sudden impetuous to deal with congestion?
You may be questioning why there is pressure to implement congestion easing processes now when the number of cars on the roads has been rising since 1995. The answer is simple; the amount of money generated to maintain roads is decreasing. Modern vehicles are more efficient than they have ever been and as a result, revenues generated from road taxes and fuel duties are decreasing. According to figures from the economist Gergely Raccuja the tax take from fuel and vehicle duties has declined by £812 million per year over the past five years whilst the number of miles driven has increased. Upcoming legislative changes like all cars becoming electric by 2040 will only worsen this issue.
For local councils and governments, the new impetuous to ease congestion comes from this “perfect storm” of issues. Roads are becoming increasingly damaged due to overcrowding whilst simultaneously, the money used to fix these roads is shrinking. This also means that whatever congestion easing methods are implemented, it’s very likely that they will aim to also increase revenues at the cost of motorists.
What is being suggested?
One solution that is being suggested will already be familiar to London motorists, the congestion zone. These policies undoubtedly work and since the year 2000, the number of cars entering central London area has fallen by a quarter whilst £1.2bn of revenue has been generated. There is now discussion about creating similar zones in 16 further cities around the UK. The problem with congestion zones (in London at least) is that congestion hasn’t actually eased. Instead road space has been taken up by more taxis, vans and cyclists and as a result, more radical solutions are now being discussed.
For many councils, Singapore is the model to emulate. In 2008 electronic sensors were set up around their congestion zone and if speeds were deemed to be too low, prices were automatically raised. This encourages motorists to seek alternative routes or travel at off peak times when charges are low. In 2020 Singapore are going a step further by using GPS to track drivers in and out the zone. Prices will then vary depending on distance, time, location and the vehicle they are using. Many new cars are coming with GPS as standard, so this kind of tracking is very possible.
What should I do about these policies?
The argument could be made that these policies are not worth worrying about. After all nothing has been implemented yet and with changes to road systems, there are always hurdles to overcome (policies like this are always hugely unpopular with motorists for example). However, this would appear to be a short-sighted view. These policies won’t be implemented suddenly, but it seems inevitable that motorists and supply chains will have to start paying more for the miles they travel.
What should be avoided is a sudden need to change, brought about by the realisation that your supply chain has gotten more expensive. Making changes when you are already suffering heavy costs is never easy or quick. Instead there are solutions that can pre-empt issues that may arise from policy changes, one of which is moving to deliver during the night time when traffic is lighter and there are no congestion charges.
Switching to nightly deliveries is not without its own hurdles; few companies are currently set up to accept deliveries at night, but with some basic infrastructure changes it becomes much easier. At ByBox our answer is to use lockers. Lockers are accessible 24/7 and allow for consolidated deliveries. This has become a staple of our operation and all our parts are delivered this way. Not only does this avoid congestion, deliveries are also more reliable. Our average first-time delivery success rate is 99.5%.
What is next?
Whatever decisions are made about how to ease congestion, it seems likely that motorists and supply chains will be encouraged to think more holistically about their travel and take routes with less traffic. What is important to remember is taking steps to avoid congestion is already very beneficial. At ByBox we have been able to reduce transit time and emissions levels of our deliveries by making them at night. In short, why wait until the government starts charging to make processes better?
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