Introduction
Other ports should sit up and take note, said UK communities and local government minister Baroness Hanham as she launched the Haven Gateway’s $12 million Low Carbon Freight Dividend project.
This unique initiative is designed to shift containers from road to rail; aimed specifically at small and medium enterprises (SMEs), it offers them a grant of up to 30 percent for moving their freight from truck to train, where traditionally they would have used road transport.
“Innovation is the key to strengthening the economy and this project has enormous potential to be taken up elsewhere; it can give the lead to other container ports as to how they can manage and help small businesses as well,” said Baroness Hanham. “This innovative and practical project will bring greater awareness of how business growth can go hand in hand with carbon reduction, which is part of all of our lives today.” But it’s not only the UK department of communities and local government which will be, as the minister promised, watching this project closely. The breakfast time launch at Felixstowe attracted a full house of SMEs, who are working through some pretty gloomy economic times. As Oliver Howard, office manager at Orchid Transport Services put it: “It’s not very often that money from Europe goes into real business. In an industry that is struggling, anything that can give us an advantage or slightly increase our competitiveness is very welcome.”
The project
The rules of the game are that the maximum payment will be £75 (about $120) per container switched from road to rail, for a minimum of 14 containers. The maximum number of containers eligible is currently set at 90. However, this limit will be reviewed and possibly increased as the project progresses, depending on participants’ needs.
To qualify, an SME must have fewer than 250 employees and either an annual turnover of less than £50 million (around $66 million) or a balance sheet of less than £43 million (around $56 million); the SME must be based in the East of England; and eligibility also depends on any previous state aid funding received, and details of parent or subsidiary company ownership. “This is definitely something we are looking to get involved in,” said Oliver Howard at Orchid. “It is well documented that the haulage industry is struggling with fuel prices; any incentive to move traffic on to rail has to be welcomed.”
Dennis Simmonds, managing director of WS Logistics, said: “With the roads as clogged up as they are, there must be alternatives, and we are open to look at anything that will enhance our business.” At the launch of the initiative, Haven Gateway projects director Richard Morton highlighted road congestion problems that existed whether you are in the freight industry or driving a car across the East of England and beyond. Add in the rising cost of fuel and the likelihood of carbon taxes sooner rather than later, and there was a clear need to find alternatives to the traditional routes for freight, he said.
“This is a pilot scheme; we want to prove that the concept works and that we have the ability to help change some of the culture and traditional methods of moving freight for SMEs. We know the [UK] government doesn’t have a clear understanding of how it will achieve its European target on carbon emissions.” The project includes a series of ‘Optimization of Freight Movements’ workshops, which will provide advice, guidance and practical examples of how to reduce carbon emissions. Alongside these, the Haven Gateway is offering a Low Carbon Transport Marketing Package, enabling SMEs to market their services as carbon friendly and thus attract new customers.
Another crucial element is access to the Containerized Cargo Carbon Calculator, an online tool for comparing and contrasting cargo movement methods (road, rail and water) and the carbon emissions for each method.
In fact, the project has attracted the interest of feeder and coastal shipping operators as well – if the concept works for rail, why not water, said one.
Lord Berkeley, chairman of the Rail Freight Group, said: “What I like about this project is that it is going to bring the use of rail to small businesses, which don’t have much time to investigate the complexities – and it is a very complex industry. I am also pleased that there is a follow up to this launch to educate people how to make it work. SMEs have the ability, generally, to be very innovative and I think the more innovative we get in this sector, the better.” Of course, the day to day reality for many SMEs is focusing on what they actually make or produce, not how they transport it. If their supply chain works, they won’t fix it; many simply don’t have the time or resources to do so anyway.
That’s something the Haven Gateway has taken note of. The project has been organized to keep paperwork and bureaucracy to a minimum. Only two forms have to be signed and they can be returned together. From that point forward, everything else is electronic. Our focus is trying to make the process as easy as possible. The onus is on the project team, not the SME, to do the work – and that is the way it should be. We are there to support them every step of the way.
There was significant interest in the project even before the launch and so far over 20 SMEs have formally approached the Haven Gateway.
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