Published: March 2008
Freight baseline and growth trends
Over the last 15 years the industrial structure of the Irish economy has changed radically and the rate of economic growth has been among the fastest of all developed economies. The economy of Northern Ireland has grown steadily and is amongst the fastest growing regional economies in the UK.
- The current modal position for the island of Ireland can be summarised as:
Road freight has long had the overwhelming share of inland freight movements within the island of Ireland.
- Rail freight has declined in absolute volume in recent years and appears unlikely to recover much of this lost traffc, though it still continues to have a role to play for certain specialised movements but only within Ireland, rail freight having ceased completely in Northern Ireland in 2003.
- Port and shipping services are of major and increasing importance to the island of Ireland because of its open economies and its peripheral location relative to European and World markets. In line with the rapid growth in economic trade, containerised traffc over the decade to 2006 through the island of Ireland’s ports has increased by 125 per cent in units of TEU, while Ro-Ro has increased by 70 per cent in units of vehicles.
- Air freight has grown in recent years with a small base in terms of tonnage moved, but it is signifcant in terms of the value of the goods that it moves and their importance within high-tech industry sectors.
3 major trends are driving freight growth:
- Construction: A major part of the recent rapid growth in road freight in Ireland  (and to a lesser extent in Northern Ireland) is associated with the high recent levels of investment in new construction of dwellings, commercial buildings and transport infrastructure. By 2006, construction materials comprised almost half of all tonnes lifted in Northern Ireland by Northern Ireland registered goods vehicles, as well as almost two thirds of all tonnes lifted in Ireland by Irish registered vehicles. The massive infrastructure spend planned on the island of Ireland, coupled with continued demand for new dwellings, supported by rapid population growth, means this is unlikely to reduce greatly in the medium term. Traffc volumes in the other sectors are much less sensitive to short term changes in the economy.
- The Economic and Social Research Institute (ESRI) Medium Term Review (2005) in its high-growth scenario for Ireland forecasts an annual real growth rate in Gross National Product (GNP) of 4.9 per cent from 2005 to 2010 and then of 3.3 per cent through to 2015. While some correction is likely, the ESRI Quarterly Review (Winter 2007) still forecasts real annual growth in GNP growth of 2.3 per cent in 2008 . Current Department of Enterprise, Trade and Investment (DETINI) expectations are for real growth in Gross Value Added (GVA) of 3 per cent per annum in both 2007 and 2008 in Northern Ireland, up from the 2.5 per cent experienced in 2006 and growing at a higher rate in 2008 than the average for the rest of Great Britain.
- Even if economic growth eases somewhat, population growth pressure will ensure that the future demand for road and port capacity runs well ahead of that indicated by past official forecasts. The recent official projection of population growth in Ireland presents a 26 per cent increase in population in the 14-year period 2006 to 2020. The recent official projection of 4 per cent growth in Northern Ireland population in the 5 years from 2006, is close to double the past growth rate, and will lead to a 10 per cent increase in Northern Ireland population by 2021. Taken together this would render a population of 7.2million on the island of Ireland by 2020.
In summary, the combination of these 3 trends; rapid population growth, high levels of construction activity and continued economic expansion suggests that the growth of vehicle traffic on the road networks will continue at a rapid level.
Key findings and recommendations
Understanding Freight Growth Current official projections for freight transport growth are much lower than the recorded recent growth in movements through ports and on roads.
The observed rate of growth in both car and HGV traffic on roads in Ireland and of unitised traffic through the ports, North and South is running at a rate close to double that assumed in the various forecasts that are currently being used by government to plan infrastructure investments in Ireland. Northern Ireland’s fiat 2 per cent growth in road use also seems conservative.
The simple reason for this underestimation is that the underlying assumptions on which the projections were originally constructed have changed considerably. Most significant is the upward revision to population growth forecasts that will inevitably induce higher freight demand. Evolving best practice in Europe is towards better data recording, supporting more complex models, to provide the necessary evidence base for long term transport planning.
In the absence of reliable forecasts the evidence base does not exist to adequately prioritise freight needs within transport planning. This has implications for the utilisation of our existing stock of infrastructure and for future investment in our port capacity and shared road network. Examining the current investment strategies in Northern Ireland and Ireland in light of the higher revealed freight movements, points to certain gaps and an overall need to expedite delivery of strategic transport projects.
Recommendation 1: The forecasting tools that are used to estimate future capacity requirements and to assess competing investment schemes need to be updated to take account of increases in underlying population growth projections. To improve the effectiveness and efficiency of the substantial planned investment on transport infrastructre the forecasting methodologies need to be improved to bring them in line with best practice (See Section 3.3)
Ports are the nodal points through which the island of Ireland connects with the global economy. In relation to ports there are 2 issues: capacity and connectivity. Outside of ports the movement of freight is impeded by city congestion and the state of completeness on the inter-urban road network. Underlying these points is the utilisation of transport infrastructure, the regulation of the freight industry and the provision of a skilled workforce.
Port capacity is currently stretched and will need to expand in the medium term to cater for continued freight growth. The Department of Transport Ireland (2006) commissioned a report from Fisher Associates to asses the future seaport capacity requirements for unitised trade on the island of Ireland. Working on the normal scenario, Lo-Lo would effectively be fully utilised by 2014 while an approximate 9 per cent increase on 2005 Ro-Ro capacity would also be required.
It seems likely that additional capacity, for both Lo-Lo and Ro-Ro, will be needed by this time if not beforehand.
Although some uncertainty exists regarding future economic growth in Ireland, most forecasts predict a short term dip in 2008 returning to strong economic growth thereafter . Fisher’s normal growth scenario was based on 4.7 per cent annual GDP growth to 2014. The ESRI 2005 medium term review forecast that 4.8 per cent growth in GDP to 2015 would represent a high growth scenario. To date the high growth forecast has been conservative and it would seem that, a short term correction not withstanding, economic growth will continue to propel freight increases. Northern Ireland will also contribute to demand with real GVA growth of 3 per cent predicted for 2007-2008.
For both Ireland and Northern Ireland the upward revision of population projections to 1.8 per cent and 0.7 per cent per annum to 2016 should help sustain a higher trend in import volumes and the movement of goods.
Observed growth rates for unitised traffic in Ireland in 2005 and 2006 ran at double those predicted by the Fisher normal growth scenario. Similar levels of growth in container traffic through Northern Ireland have also been recorded during the same period. While over a short time span, this does indicate that the island, North and South is currently registering high growth in freight movements. Recently published figures for 2007 by Dublin Port suggest this trend has continued.
The need for extra capacity has been recognised by the port sector and major expansion plans are underway. It seems clear that expansion will be privately financed, both governments should facilitate this through timely planning procedures and supportive infrastructure that connects ports to the wider transport network.
There is inevitably a delay of some years between approval being given for a major new port facility and the date when it becomes fully available for use. Major long term damage would be caused to both economies if there was an interim period with inadequate port capacity for the import and export of unitised goods. Without spare capacity within the port system there will be no effective competition and little pressure to control prices or improve service levels in individual ports. The resulting price increases and congestion delays experienced in ports would impact on the competitiveness of exporting firms and on their ability to serve existing markets, causing serious potential long term economic consequences for the island of Ireland.
Recommendation 2: Unitised port capacity on the island must be expanded. Belfast Port has set a target of double capacity by 2020. Other ports have similar ambitions. These need to be delivered, particularly the development of Bremore new port, the Lo-Lo expansion in Dublin port and the Cork Lo-Lo Terminal in Ringaskiddy. Planning permission affecting their expansion needs to be progressed rapidly. (See section 3.5)
Decisions on investment need to take account of the worldwide move towards larger container vessels that call at fewer and larger ports with greater depth. A similar trend in increasing vessel size also applies to feeder vessels. Future investment must ensure that larger vessels can be accommodated and that freight can be transferred readily onto the wider transport network. This emphasis towards concentration needs to be counterbalanced by the desirability of competition to control prices, improve quality of service, as well as to serve the natural hinterlands of different parts of the island of Ireland. (See Section 3.5)
Port Connectivity to the Road Network
For ports to function effectively they must link seamlessly to the inland network. Particular bottlenecks exist in getting lorries in and out of ports, impacting on efficiency and the wider community. Given the significance of the land bridge to Europe, similar issues facing a number of key ports on the west cost of GB merit a co-operative East-West approach.
Recommendation 3: Improve local access routes adjacent to a number of ports / airports.
These are: Belfast Port (York Street/Westlink junction); Belfast International Airport (upgrade
road connections to M1 and M2); Warrenpoint (Newry Southern Relief road); Larne (full dualling
of the A8); Rosslare (port access road andcomplete the N25); Drogheda (Northern and Southern Relief roads) and Cork (road system around the Jack Lynch Tunnel and N28 to Ringaskiddy). Though a number of these routes are contained in investment plans, it is important to implement these improvements early enough to support the rapid expected growth in future port traffic. (See Section 5.2)
British land corridor
A large proportion of the higher value trade between the island of Ireland and Europe (approximately 1.5million tonnes of imports and a little lower volume for exports) passes overland by lorry through GB, mainly down to the ports of south-east England and the Channel Tunnel. This relies on the quality and usage cost of the infrastructure in GB.
A lack of reliable road links to the ports of Pembroke and Fishguard (A477/A40), Heysham (construct Lancaster by-pass) and Stranraer / Cairnryan (A75/A77) has been identified. This is a serious issue facing hauliers and those ports on the island of Ireland which are geographically tied to these routes. This was mentioned regularly during the consultation. In the longer term, if the quality of access continues to deteriorate due to the growth of local congestion, this could seriously hamper the ability of the corresponding port, North or South to compete with others on the island of Ireland. Any erosion of competition between ports on the island of Ireland is unlikely to be in the public interest. (See Section 6.2).
Recommendation 4: Cooperation with the authorities in England, Wales and Scotland is required to ensure that these improvements are prioritised - EU structural funding could also be sought for what are strategic international rates. This might best be taken
forward within the machinery of the British-Irish Council. (See Section 6.2)
Impact of City Congestion
Beyond the immediate access routes to ports is the broader issue of congestion in the major cities in which the strategic ports are located.
Congestion in our cities is a critical issue for the delivery and export of goods, acting as a thrombosis to the rapid circulation of goods within the economy.
There is a strong likelihood of continuing congestion in and around Dublin, particularly on the M50, which must be used to access the key gateway of Dublin Port. As well as the current M50 widening, other options that should be considered to lessen congestion impacts include the following:
Recommendation 5: Construct an eastern port access route to avoid the need for lorries from the south and south west to circle Dublin on the congested M50. If this scheme were not to proceed, then as a fall-back reduce for some or all of the day, the current restrictions on lorries passing from the south through the city to the port.
Recommendation 6: Apply demand management / pricing policy on the M50 in congested periods to discourage excess car traffic volumes but using technology to ensure it does not generate bottlenecks at toll booths.
Current congestion problems are often exacerbated by the delays associated with major construction works.
Recommendation 7: Re-organise the construction work on road widening, particularly on the M50, to reduce its impact on the throughput of traffic during congested periods. In Ireland night time construction, in line with international best practice, should be considered. A good positive example of best practice in this regard would be the planning and delivery of improvements to the Westlink in Belfast. (See Section 5.2)
Inter-Urban Road Network
While ports are of critical importance to the ability to import and export, these only form a small proportion of the total freight movement on the island of Ireland. Of critical importance to all freight is the quality of the major inter-urban routes. In order to ensure the needs of the freight industry are taken into account when planning future investments both governments could consider:
Recommendation 8: Establishing Freight Quality Partnerships to deliver freight solutions at a local level, on issues such as night-time curfews, no car lanes, drivers’ rest areas and bridge and road strengthening. Examples of how this might be done are provided by the Belfast Freight Quality Partnership and by the Freight Action Plan for Scotland (Scottish Executive, 2006). (See Section 5.1)
Within Ireland the perception is that Transport 21 will deliver the necessary road connectivity. Care must be taken that, in line with the experience of the M50, a good supply of infrastructure does not induce demand resulting in congestion. Moreover, as Dublin acts as the central hub in the wider inter-urban network, congestion there has a national and indeed island wide effect.
Recommendation 9: Give go-ahead for the proposed Leinster Outer Orbital route (Drogheda - Navan-Naas), which is not currently in Transport 21, in order to relieve pressure on the M50. Adopt road use pricing policies and land use planning to discourage urban sprawl around it and support the development of national distribution centres adjacent to this route.
The planned rate of road investment in Northern Ireland needs to quicken in order to support the Northern Ireland’s Executive’s stated aim of balanced economic development. Given its peripheral locality and the associated high transport costs that accrue to companies and consumers, there is great urgency to complete road investments in the Key Corridors of Northern Ireland sooner than is currently indicated in the recent Draft Investment Strategy, 2008-2018
(Northern Ireland Executive, 2007).
This is necessary to enable enterprises in Northern Ireland to cooperate and compete effectively both with those in Ireland and in other regions in GB. It would also provide the help that freight transport companies need to meet the increasing demands of customers with respect to: more frequent deliveries; the increasing use of Just-in-Time (JIT) systems; reduced stock levels combined with more global sourcing which increases the requirement for delivery reliability; and in general much more streamlined supply chain management.
Recommendation 10: Northern Ireland should accelerate the pace of investment in key road corridors for freight and expedite the completion of schemes to dual the A5, A6 and A8, before congestion and delays escalate and add to (in part due to growth in Irish based traffic) the relative peripherality of western counties.
In order to maximise the benefits from the roads investment programmes in Ireland, it is important that road upgrades be complimented by improvements in traffic and congestion management. This is an area where there have been major improvements in Britain in recent years, providing free, real-time information to users of England’s network of motorways and trunk roads, allowing them to plan routes and to avoid areas currently indicated to be congested.
Recommendation 11: There is considerable scope for developing similar technology-based solutions on an all-island basis. The potential in this regard should be considered in detail by the two Governments. (See Section 5.2)
Road Pricing / carbon taxes within the island of Ireland.
Within the short to medium term, EU policies to reduce carbon emissions are likely to lead
to signifcant increases in road and air transport costs.
Given the limited scope for modal shift within the island of Ireland, the response to increased road costs will need to focus on improving efficiency in road transport and logistic structures. The main overall impact of carbon taxes on roads would be to reduce the consumption of carbon based fuels through reducing both HGV and particularly car traffic. In this way an indirect side effect would be to ease the growth in congestion, particularly on inter-urban roads.
Road Pricing/ carbon taxes within the EU.
This cost impact will bear most heavily on the longest distance road movements. However, future increases in lorry weight and /or size limits to allow longer / heavier vehicles (LHVs) could permit greater load consolidation and cut costs per tonne - and cubic metre-kilometre for long distance movements to the island of Ireland , alleviating a part of these cost impacts.
Recommendation 12: Adoption rates of LHVs elsewhere in Europe need to be monitored to ensure the competitive position of the freight industry on the island of Ireland is not undermined.
For medium value goods or those with flexibility in delivery schedules it is likely that alternatives to the current use of road transport will be actively considered. This implies that Lo-Lo services direct to European ports or unaccompanied Ro-Ro routes that economise on road distances will gain some share from accompanied Ro-Ro services using the British Land Corridor down to the Channel ports.
There is a need to investigate the feasibility of new international services that are less road-intensive. There is substantial EU funding available through the Marco Polo II, Motorways of the Sea and other European Commission (EC) programmes which actively encourage such initiatives. Surprisingly, to date, little use of this funding appears to have been made on the island of Ireland, when compared to elsewhere in Europe, despite the very high dependence of both jurisdictions of Ireland on its maritime connections.
Recommendation 13: Both governments should be proactive in publicising and providing support to encourage greater involvement in European funded programmes that are focused on
improving international freight transport connections to the island of Ireland, making use of the North/South Ministerial Council and the British-Irish Council as appropriate to progress joint funding applications. Otherwise the impacts of future increases in international road costs could prove problematic. (See Section 6.3)
Regulating the Freight Industry
The fndings and recommendations of this report are designed to enable governments and the freight industry to take action to develop freight transport within the island of Ireland with a consequent contribution to economic growth and industrial development. As such, there could be value in their being examined by the North/South Ministerial Council which has an important role in considering strategic transport issues within the island of Ireland.
The fndings, however, have a relevance beyond the island of Ireland in that they raise issuesw hich relate to links between the island of Ireland, GB and beyond. There could also be a case for these issues to be considered within the framework of the Transport sector of the British – Irish Council (the sector for which Northern Ireland is the lead administration) to explore the scope for appropriate action to be taken.
With all ports directly competing on an all-island basis and greater synergies in the road networks North and South, a joint approach to certain regulatory issues could provide mutual beneft.
Recommendation 14: Adopt common vehicle height restrictions based on the UK de-facto
limit of 4.95 metres. The proposed lower limit of 4.65 metres in Ireland would increase costs for trade to and from that jurisdiction because access would be denied to high-cube / double-deck vehicles which have become increasingly popular in the UK and which have lower ferry rates per cubic metre of load.
Recommendation 15: National speed limits for HGV should be equalised on the island of
Ireland. This would include increases in Northern Ireland from 40mph to 50mph / 80kph permitted on high quality single carriageway roads. On economic grounds, the Irish government should consider increasing the current HGV speed limit from 80 to 90kph on the national road network for (some or all of) motorways and dual carriageways, for (some or all types of) HGV. On safety grounds, the Irish government should consider lowering the speed limit on regional roads for (some or all) HGVs to 70kph. Through encouraging HGV movements in Ireland to switch to the highest quality roads, the combined result of these speed changes should generate safety gains (provided that the limits are then rigorously enforced) because such roads have the lowest accident rates per vehicle km.
Recommendation 16: Centralise and improve the efficiency of providing permits for the movement of abnormal loads. Currently in Ireland, each of the 36 local authorities through which an abnormal load passes, needs to provide a separate permit, causing delay and cumulative costs. In contrast, to move a large load along Northern Ireland’s roads requires only two authorities to be informed: Northern Ireland Roads Service (NIRS); and the Police Service of Northern Ireland (PSNI). The ideal approach would be for the North/ South Ministerial Council to consider an all-island system that requires hauliers to contact the minimal number of separate
Recommendation 17: There should be a joint approach to the licensing of commercial vehicles and enforcement of Vehicle Standards. The response to cost pressures by local hauliers has often been to cut corners in many areas of legal compliance related to vehicle roadworthy condition, overloading, driver’s hours, etc. The existence in both jurisdictions of different regulations and permit systems for transport movements creates many difficulties for companies operating across the island of Ireland. This is an area in which there is also an East/West interest, given the movement of vehicles from the island of Ireland to Scotland, England and Wales and, therefore, an area which might usefully be considered within the British-Irish Council. (See Section 5.3)
Provision of a Skilled Workforce
The freight industry has identified a particular need to raise the professional image and profile of the industry. To address this issue the Chartered Institute of Logistics and Transport (CILT), has been working to improve the skills base in logistics and to enhance its image. There is also a need for continuous education to develop the wider business skills appropriate for a contemporary service sector, as well as for safety and energy efficiency. Lessons can be learned from Skills for Logistics :, the sector skills council for logistics in the UK, which provides a wide range of apprentice training opportunities to younger people entering the
industry. It is developing training units that will enable the UK Council for the Curriculum,
Examinations and Assessment to approve Transport as an additional occupational area, ideally leading to a NVQ Level 2 Transport qualification. This would potentially help recruitment to address the shortage of drivers.
Recommendation 18: Investigate the scope for increased joint provision of certified and recognised training at all levels, across the island of Ireland, making use of the North/ South Ministerial Council. (See Section 5.1)
We have identified 2 areas where the evidence base for important future decisions is weak and for which future analytic studies should be carried out.
Recommendation 19: A study is needed of the impacts on imports and exports from both jurisdictions of expected future major road cost increases across the EU. This study would provide an up-to-date evidence base to guide on future short sea shipping demand and particularly on the balance of the associated future port capacity requirements for accompanied and unaccompanied Ro-Ro and for Lo-Lo. This study should be an all-island study because of the unified market for unitised shipping. The deliverable from this study would be authoritative guidance on the options and requirements for future increases in port and shipping capacity on each of Lo-Lo, accompanied and unaccompanied Ro-Ro services (See Section 6.3).
Recommendation 20: Create an up to date, behaviorally based modelling system for the forecasts used for longer term strategic planning of both the Northern Ireland and Ireland road systems. This model would forecast the joint influences on traffic volumes across the road network of: improved road infrastructure; and of potential future charges on lorries and cars that aim to reduce CO2 emissions. Ideally it would be an all-island study to ensure that the vehicle movements across the border were consistent, particularly those for freight. This model needs to examine cars, vans and lorries in tandem, since they compete for the same road capacity. This model would provide improved estimates of local traffic growth and would identify areas subject to future congestion problems for passenger and freight traffic, for which suitable policies or
investments could then be examined further. (See Section 3.3)
Recommendation 21: To support the above studies and to provide a sound evidence base
on which to make future policy and investment decisions for both jurisdictions, there is need for a number of improvements to the assembly and publication of statistical data both in Northern Ireland and across the island of Ireland. These would provide greater consistency in statistics across the island of Ireland and would address particular weaknesses such as the absence of published information explicitly distinguishing van traffic, which is likely to be a significant and increasing future source of traffic growth in congested areas. (See Text Box 5.1)
Efficient freight transport is essential to the economy and to the quality of life across the island of Ireland. Economic growth generates increasing demand for freight transport. Goods have to be moved freely, reliably, efficiently to meet business needs, while minimising the impact on safety, on other transport users and on the environment.
This study has set out to understand the opportunities, constraints and key issues for freight on the island of Ireland. Through review and analysis, a baseline to help understand the trends of freight growth has been built up. A wide range of stakeholders have been consulted seeking their views on the current freight transport system, future trends, and the key policy objectives that should be addressed by government. Supported by the consultation and analysis, we have put forward a number of priority options for consideration in improving the provision of freight and logistics services across both jurisdictions have been put forward.
The most critical of these are:
- to improve data collection andforecasting of freight transport;
- to increase port capacity and targetbottle necks in the road network;
- to co-operate North-South and East-West toregulate and support the freight industry; and
- to involve hauliers in transport planning.
The economy of Ireland has grown rapidly in the past and expectations are that this growth will continue, though probably at a less extreme rate. Economic and population growth in Northern
Ireland have also recently started to accelerate recently. It is crucial to ensure that an efficient
freight and logistics system is in place on both sides of the border, in time and with sufficient
capacity, to encourage rather than to constrain this expected economic growth.
 Over the decade to 2006 the movements of construction materials on Irish roads increased 6-fold, growing from 14 per cent of all road tonne-kms in 1996 to 31 per cent in 2006.
 Davy Stockbrokers forecast 2% this year, returning to a potential growth rate of 3.5-4% for 2009-1011.
 The Dutch have recently approved 60 tonne 25.25 metres LHV, the Danes are trialing them from Jan. 2008 and a UK study on the issue should be published soon.
 See www.skillsforlogistics.org/en/ for further details of the activities of the Skills for Logistics Council.
You can download a copy of the full Freight Transport on the Island of Ireland report.