EU report admits road freight fundamental to economic growth 02/Mar/2007

The European Environment Agency (EEA) has published a new report on the state of the European transport and logistics sector. Despite the logistics industry generally having little confidence in the output and pronouncements from Brussels, the report contained some quite useful information and common-sense statements.

First of all the report comes to an important but unsurprising conclusion that economic growth and transport demand show no signs of 'decoupling'. In fact the role of transport is growing as a proportion of the economy. The report asserts that, "More goods are transported over longer distances than ever before. As a result freight volume growth has grown by 43% since 1992.
After some years of moderate growth, volumes grew strongly once again in 2004. Over the same period GDP growth grew by 30%. Therefore freight intensity has increased over the past decade".

The next interesting statement is the admission by the EEA that road freight is simply a superior transport mode in many situations. In 2001 the EU committed itself to reversing the loss of transport market share that rail
had consistently experienced. The EU has now abandoned this "blank cheque" in favour of supporting modal shift "where appropriate". Rail projects, the report states, should be supported by the EU on a "case by case basis ". The reason for this is that, "road transport is simply more flexible than rail transport, and can therefore adapt much faster to changes in production sites". The report goes on to observe that the only viable way to reduce the
role of road freight would be for "development policies in other sectors to be built around sustainable transport policy rather than transport systems trying to adapt to development". Leaving aside the implied weak understanding of how advanced market economies work, this statement is a strong implicit admission that transport activity is one of the fundamentals of economic activity and it cannot be controlled by government policy.

There is a growing threat to transport activity from governments trying to apply so-called environmental taxes and even attempts to ration transport.
This report from the organisation created to generate ideas on environmental policy in the EU tacitly admits that transport is basic to contemporary advanced economies and trying to control either its pattern or growth is likely to fail. This may be an unwelcome message to a few but it is the only basis for any viable environmental or transport policy.

VGP