London’s New Ultra Low Emissions Zones and What it Means for Fleet Managers
Following the election of Sadiq Khan as Mayor of London back in May, London is due to get a new ‘ultra-low emissions zone’ (or ULEZ) by September 2020. Now that the clock is ticking on what is likely to be a costly new set of charges for many of London’s millions of drivers, it is well worth looking at what this is likely to mean – and what you should do to prepare.
Higher charges = lower pollution?
It is worth saying from the onset that this is not a policy without merits. The proposed ULEZ will reduce harmful nitrous oxide emissions as well as a number of particle emissions that, together with other forms of air pollution, have been linked to an astonishing 40,000 deaths per year. Clearly better air quality is welcome – the question is how these improvements can be made without hitting London drivers and businesses (meaning, ultimately, their consumers) hard.
What is the charge and which areas will it apply to?
Vehicles that do not meet the ULEZ standards will have to pay a daily charge of £12.50 to travel within the zone. This zone stretches roughly from the Euston Road (A501) to just south of the river (specifically to the A3204). It is bordered by Hyde Park in West London and Commercial Street, Whitechapel, in the east. While geographically tight, this means that it encompasses many of the capital’s most well-loved commercial and cultural districts – including Oxford Street, Soho, Farringdon, Marylebone and the South Bank.
Current vehicles that pass ULEZ standards
At present, motorcycles must be Euro 3 standard or cleaner to pass ULEZ standards; petrol cars, vans and minibuses must be Euro 4; and diesel cars, vans and minibuses as well as lorries, buses and coaches must be Euro 6. As carmakers will doubtless be busily innovating and keen to offer new vehicles that pass these standards, one question for central London drivers is whether to upgrade to a cleaner vehicle now, or wait until closer to the September 2020 implementation date.
Consultation on earlier implementation
Drivers may not have been consulted as to whether London should have an ultra-low emissions zone (unless you count the mayoral election as a consultation). However, fleet drivers are now being given the chance to give their views on whether or not the zone should come into force earlier than the current 2020 implementation date. There are also proposals to extend the zone to the North and South Circular. A detailed consultation is expected to be published in October to take the views of London’s drivers.
The consultation comes as a clear majority of Londoners have expressed support for the implementation of the ULEZ. However, while people were consulted on their support for the Mayor’s proposals to clean up their city’s air, they were not consulted on what extra costs they would be prepared to pay for them. Sources within the industry have stated that it is likely that costs will be passed on to consumers – that means central London businesses. The chances are that these will in turn pass the change on to their customers at the till.
Whether to upgrade, and when to upgrade
As mentioned above, drivers will wonder whether to upgrade to cleaner vehicles – and if so, when to do so. As touched on above, there will likely be advances in new vehicles’ emissions standards as the 2020 implementation date comes into view. For commuters, the question is simple enough. For haulage companies, there are a few more considerations.
First is the consultation, and the broader noises made by politicians on the subject. With thorny issues like Brexit and party-political shifts high in the minds of our country’s lawmakers, there may not be much political appetite for hammering London’s drivers too hard. This may mean some stepping back on the ULEZ, but more likely it will simply mean that it is not brought forward. There may also be attempts to offset the impact on central London’s businesses, especially as 2020 gets closer. It is well worth keeping an ear to the ground to see how this political mood develops ahead of any big spending decision.
Behind every cloud, goes the proverb, there is a silver lining. The silver lining in this case will almost certainly be that vehicle manufacturers will want to get ahead of the curve and there may be cost savings for fleets prepared to invest in the long run. Transport for London (TfL) has clearly taken this view, with the world’s first all-electric double decker bus introduced this spring and the city’s all-electric bus fleet set to rise above 50 vehicles by the end of 2016.
Electric buses, and soon electric lorries
London’s first electric bus is manufactured by a Chinese company, BYD. Other manufacturers are also investing heavily in similar technology. London is becoming a hotbed for drivers of electric cars, and in the more leafy parts of the city driveways with cars charging in them has become an increasingly common sight. BMW has already developed a 40 tonne truck which has been used to transport automotive parts between facilities in Munich since 2015. It is only a matter of time before all-electric lorries come on to the market. When they do, London will be a prime target market, with a growing network of electric vehicle chargers and a clear political desire to clean up emissions on a grand scale.
Getting added value from the changeover
For fleet managers, while the prospect of an electric or part-electric fleet will undoubtedly involve some cost savings on fuel, these will at least in the short term be negligible in comparison to the initial investment needed to update a fleets vehicles. This is not to say there are not opportunities for further benefit, though. The most obvious is in public relations – even one new all-electric vehicle is a PR gift and given the majority of Londoners are in favour of the ULEZ, it certainly seems that green lorries are en vogue. Tying in fleet management with canny advertising brings opportunities to seek out new customers.
Upgrading a fleet also brings the chance to look at additional upgrades. Another change in the pipeline is the busy Mayor’s desire to see lorries fitted with safer side windows, for better road safety. Another is the potential gains to be had from fitting in-vehicle cameras and vehicle tracking systems. The question still comes down to how much investment you can afford to make in your fleet – but given that the ULEZ makes this a question more of ‘when’ than ‘if’, this is something that the city’s fleets should start planning for now with a view to implementing by the 2020 deadline.
Sitting it out
There is, of course, another option. As green vehicle technologies come forward in leaps and bounds, so too is the industry powering ahead with driverless vehicles. The implications could be equally significant, and the question is whether or not these technologies will be anywhere near mature enough to wait for. The speed of developments in the last couple of years suggests that they might be.
Here again, politics might have a lot of bearing on how fast things move. The last government announced back in March that driverless lorries would be trialled in the UK. Carmakers are working with British universities to investigate the safety of smaller vehicles. There are many questions as to how much of the previous administration’s programme will be carried over by the new one. That being said, there is clearly an appetite in Westminster and City Hall for the UK’s traffic to be ahead of the global curve. This presents a whole new set of opportunities for drivers with enough appetite (and deep enough pockets).
Strategies for London’s fleets
While London’s ULEZ might be the most immediately impactful change heading towards the UK’s haulage industry, there are plenty more on the horizon. Firms will find themselves in both a costlier environment and a more competitive one. This means decisions about when and how heavily to invest, how much to pass on costs to customers and what bets to place on what technologies. Whether to favour green vehicles or driverless ones is the obvious question. Hopefully, though, manufacturers will realise that with these costs come opportunities, giving fleets more choice. This certainly has happened with driverless technology, and it will certainly continue to happen with electric vehicles.
Innovating in the fast lane
A final thought is that where there is change, there is opportunity. While new vehicle types and new costs may present existing fleets with plenty of challenges, others will be looking at the market and new entrants might well come in to disrupt things further. You only need to think of the changes to the world’s plethora of local taxi ecosystems to see what this could mean. Fleets, of course, have the benefit of well-established networks and higher entry costs. That, combined with the lessons of the last five years, mean that while there might be plenty of tough spending decisions ahead, there might also be plenty of scope for the industry to modernise from within. One thing is for sure – the supply chain needs haulage as much as ever. The only question is what that haulage will look like in the years to come.