 Rwy'n dechrau, amtii. Fy enw i'r 7 eu gwaith yn 2015 ar y Bydd y Prifysgfaeth Cymru. Fy enw i'r fforddi symud? Rwy'n dechrau, i fod yn fywm ddych chi'n ddigitwg yr ymarfer, ac o'r pwysig yn fawr yn ei ddigitwg fillno, rwy'n meddwl, i'n yr ysgolwg chi'n ddigitwg ar yr ysgolwg. Mae'r ymdwyng agendaeth i'w hyn yn gholdi gwendwch i'w brydau o'w sydd fyddog yn eu cyfnod, pewydu cyfrithau scatterr yn ysgolwg. experts from the transport sector. I welcome Derek Holden, Professor Dr Allan McKinnon, Head of Logistics at Cwun Logistics University in Hamburg, Germany, and Dr Maya Pircek, Deputy Director at the Centre for Sustainable Road Freight at Herriot-Watt University. Good morning. Perhaps I could kick off our session this morning and direct our first question at you, Professor McKinnon, as you were the advisor to the local government and transport committees 2006 inquiry into freight transport in Scotland. Can you summarise for the committee what the impact of that—assuming that there was an impact—of that inquiry was and what difference it has made to freight industry in Scotland since the report was published? Yes. The motivation for that study back in 2006 was a petition from the road haulage association at the time, which felt that the Scottish road haulage industry was subject to increased foreign competition. They felt that competition was unfair because foreign hauliers were moving into the UK with fuel that they had bought outside the country. That was a big issue that was addressed by the committee. There was not a great deal that could be done because many of the powers resided in Westminster rather than here in the Scottish Parliament. One thing that we could say is that, to what extent is the Scottish haulage industry today vulnerable to competition from foreign hauliers? It is still possible for foreign hauliers to fill their tanks outside the country and come into Scotland and operate here with lower operating costs. However, what has happened in the meantime—this is a Westminster-driven directive—is that the HGV levy has been imposed, which has tried to level the fiscal playing field, if you like, between hauliers in the UK and those externally. Although that was a big issue that was well debated at the time, nothing very much happened because, as I said, the powers resided elsewhere. I think that there are 50 recommendations in the 2006 report. I am not going to go through all 50 to see whether they have been implemented or not. In many cases, it is hard to know whether they were implemented because it involved asking the Scottish Government to conduct a study or to audit, and one does not know whether that was done internally. However, there were a few things that have happened, which I suppose were recommended. One is the increase in the speed limit for trucks on the A9. That was a recommendation. There was concern expressed about the state of the fourth road bridge. The 2006 committee report did not actually ask for a second fourth crossing, though there is one now being constructed. There were some other things recommended. It is hard to judge if they have actually happened. If I just list a few of them, I suggest that bridges should be strengthened in the highlands to accommodate the 44-ton lorry. I think that there were many restrictions on the movement of heavy trucks in the highlands because the bridges had not been checked and strengthened to accommodate them. There was a suggestion that there should be some investigation of the case-for-night delivery in urban areas in Scotland. As far as I know, that has not happened, although there have been initiatives south of the border to see what the potential is for delivering to shops in urban areas during the night. There was support for the Rosaith Zebrug of Ferry. Some of those things have been overtaken by events, because, as I am sure the committee is well aware, the SECA regulations have imposed tighter environmental restrictions on short sea shipping. That has made the Rosaith Ferry a bit more precarious, though the Scottish Government has come in and provided some financial assistance, which makes that service viable again. Another recommendation by the committee was that more use be made of long-distance rail freight services between Scotland and the European mainland through the channel tunnel. Regrettably, I do not think that that has happened. If you look at the total number of freight trains going through the channel tunnel today and compare that with what it was in 2006, I think that there are about a quarter fewer now than there were then. I do not know how many of those are starting their journeys or ending them in Scotland, but there is less use being made of the channel tunnel today than before. There was a recommendation that freight facilities grants be encouraged to shift more freight from a road to rail. Scotland continues to make those grants available, unlike the Government's south of the border, but I understand that, today, there are relatively few awards made. What has also happened in the meantime is the methodology that has been used to award those grants has changed. The committee, overall, was keen to see a shift in freight from road to rail and water. In the 2012 study that Mai and I compiled for the freight transport association, which has been submitted as evidence to the inquiry, we show how the freight model split has changed, and it has not changed very much in that time period. The freight market is still overwhelmingly dominated by road transport here in Scotland, and there has been only a marginal shift to rail. One point that I will make on the freight model shift is that we tend to measure the allocation of freight between transport modes in weight terms. Some of the traffic that the railways have recently secured is of low-density freight. It does not necessarily account for a lot of tonnes, but it does take up quite a bit of volume on the trucks and the trains. The lighter retail traffic that the railways have secured against the traffic that is lucrative for the railways and is something to be encouraged, but it does not add all that many tonnes to the rail network, back in Paris, for example, with coal or other primary products. I could go on, but I do not want to bore you with all those details, but there are some indications of some of the changes that have occurred over the past nine years. How would you characterise then what the impact of the report has been overall? Is the situation improving or are we going back the way? What is your sense of it? I think that it is mixed. I am sure that the committee back then would have liked to have seen a more pronounced shift of freight to rail and to water. That really has not happened. Something that I have not said anything about is aviation, so that air freight was declining up until—air freight out of Scottish airports was declining up to 2006, and that decline has continued. The freight tonnage going through Scotland's airports has dropped by a third today from what it was back in 2006. A number of very positive infrastructural things have happened in the interim. The M74 extension has been constructed, and that has relieved Scotland's main congestion bottleneck back then. We have also got the M77, so there are major road improvements, which have had a big impact on freight movement in that time period. We still have the Rossaith ferry. If it had not been supported, I suspect that it may have been discontinued by now. There are some other trends that I have not mentioned. Take CO2 emissions. I am not sure how important that particular issue is to this inquiry, but the study that we did in 2012 suggested that the carbon intensity of freight transport in Scotland, if anything, has declined slightly. The total amount of CO2 emitted by freight transport had come down, but a lot of that was due to the economic conditions and the recession of 2008 through to 2010. It is hard to sum it up just in a few words. I think that there are some things that are positive and have worked well, and other things that maybe have not delivered the benefits that were expected. Other things are very hard to say, because, as I say, the recommendations were for internal measures by the Scottish Government. It is hard for me to say whether they have actually been implemented. Thank you very much for that, Emma. Shoe will tease out a number of those issues. My colleague, David Stewart, would like to ask a brief supplementary question. In the points that Professor McKinnon made about the increase in speed in the A9, it is a cause close to my heart, and we discussed last night, in fact, at Mike Mackenzie's member's debate. One interesting issue that is raised to me by the haulage industry is that, if you raise the speed on that road, which I am very familiar with, to 50m from 40m, if you are using a higher gear, you are actually less emitting than you would be at 40m an hour. That links, I think, well with your point about CO2. It is counterintuitive, is it not? You tend not to think that increased speed is less emitting. I am very keen that we see freight moving on to water and to rail, but there will always be a very important role for road transportation, and it is one that I am very enthusiastic about. I will make that one point. The other one is that I believe that in England, they are looking at changes in the speed limit as well, and I was raising this with the minister last night about whether there would be some examples for the Scottish Government to look if they are looking at developing this pilot elsewhere. There is a sweet spot in terms of the speed of the vehicle where you minimise the amount of fuel consumption. It is true, and it is somewhere between 45 and 60 miles an hour where you will minimise the fuel consumption and CO2. You also improve the overall flow of all categories of traffic, so probably the fuel efficiency of the cars will also improve as well, so there is a wider environmental and carbon benefit, it seems to me. I would like to ask Dr Peercheck and Mr Halden in general terms how would you describe the current infrastructure surrounding the freight industry in Scotland? I will go first. I mean, like Alan, I have been looking at this type of agenda for some years, and I was looking at the trends and looking forward as well, because what we want to do with this inquiry, hopefully, is to come up with good things that can happen in the future. There are four themes under which I think that the infrastructure needs to recognise that change is needed. The first of those would be around the customisation theme, which is one of the big changes that are taking place in society. Now, looking back to a document that I worked on, roads, bridges, traffic and the countryside, in 1991, I remember that we put forward there the creation of the idea of a freight network. If we had clearly defined freight networks, what vehicles went on, what roads across Scotland, then we would not have any arguments about which roads should be 50 miles an hour for lorries and which weren't. That level of clarity and a clear hierarchy within the road network, I believe, 24 years on, is still just as needed as it was back then. It would be top of my list in terms of the infrastructure. Whether that leads to actual physical changes or not, inevitably, it will lead to some physical changes, but I really do not think that we know what they are. All that we are doing is putting sticking plaster over wounds until we have some clarity that we are saying, oh, this is the road that we want the largest vehicles to go on, and this is the consolidation hub that they will then reach and transfer to a smaller vehicle. Until we have that level of hierarchy in the network, we struggle. The second theme is around efficiency. We have been looking at horizontal and vertical integration that we would be trying to achieve with the customers of freight and the collaborators that we are trying to achieve. For example, in terms of horizontal integration, we would be having two slightly different types of products travelling on the same vehicles to drive up efficiency. Again, we ask, what are we actually doing to deliver that sort of thing? Where is the infrastructure to support that type of issue? In terms of vertical integration, how we are actually looking at what we buy and how we manage that, which is related to issues around simplification of networks and business models. If you are watching, what do you mean by vertical integration? Vertical integration would mean that instead of a customer saying, I want to move 20 widgets from A to B at 9 in the morning, the freight supplier says, we are actually taking a trip at 10 in the morning, so if you were to allow us to move it at 10 in the morning, we can give you a better price. They collaborate with the purchaser and achieve some degree of integration in the approach that they take to the way they buy things. Clearly, that is very important when talking to national government, as you are, as a committee, because national government is right at the top of that hierarchy of purchasing and supply. In terms of the business models, I would be looking again at the infrastructure business environment. Do we own more land, for example, around ports or airports to try and lever some of the benefits? One of the things that worries me most in a lot of our works in the land use transport interaction area is that, because policy often seems quite unstable, the people that make the biggest sums of money are the speculators, the people that think, oh, if I can lobby for this particular transport investment, then this bit of land we have there, we can make a few billion pounds on. Actually, the more stability we can have within policy, in one way of creating, the reason Princess Street is there in Edinburgh, is because somebody bought all the land and achieved the planning in that way because they controlled it through ownership. There are different business models, some around ownership, but some are just around agreements, around what can happen in particular areas. Certainty is needed in there. That is probably enough. I could go on for ages, but there is a lot in that sort of better stop. You have lots of opportunities this morning. Dr Peercheck. I agree with all the points. A few things I would like to add on to that is that we need to integrate Scottish freight transport systems with the UK freight transport systems in general, because it's a part of wider network. To make the whole system efficient, we need this whole system perspective. Scotland is on the part of it, and we need to look across the borders. That's the main, that's the first thing. The other thing is we also need, because Scotland doesn't have deep-sea container ports. If we want to maximise the potential for mode shift, we need to make sure we have efficient links by alternative transport modes to the main deep-sea container ports in the south, so that's an important issue as well. The third thing links back to the land use planning and freight movement in urban areas. With the recent trends in huge growth in online retailing, we need to understand the freight flows generated by that, and we need infrastructure to make home delivery most efficient. So, whether that's sort of unattended collection points or even loading base for people delivering freight to homes, we need to look into that, so we need to understand the nature of traffic flows in urban areas and provide infrastructure for the most efficient solutions to that problem as well. Thank you. Mike, did you have a supplementary question? Yes, it was just there. You mentioned that our strategy has to take account of the fact that we don't have a deep-sea container port. I'm sure that you're aware that there was a proposal a few years back to have just such a port at Hunterston, but do you feel that Scotland's freight strategy would benefit greatly in terms of maximising the economic benefit to Scotland if we did have a deep-sea container port? Well, there isn't a simple answer to that. I think there is a need for a study that would first assess the feasibility of having a deep-sea container port, so do you have enough space and land around it? And the second thing is you would need to consult the main shipping line because Scotland is outside of the main shipping routes at the moment, so I don't know even if Scotland had a deep-sea container port. It's the question of whether the main shipping line would actually use the port to deliver to Scotland, or would they rather stick to the Rotterdam and south of England ports. Do you think that there's virtue in having a study to examine this possibility? I should have mentioned it. Back in 2006, there were actually two proposals active for a deep-sea container port. There was Hunterston, and there was also Scapa Flow, and so the committee back then—they didn't dismiss the idea, but I think they were a bit sceptical. Partly for the reason that Maya mentioned that what is the likelihood that a big deep-sea container shipping line would call a port in Scotland. Even if they were to do so, given the traffic volumes, it would be infrequent. Many Scottish exporters would probably still want to connect with the more frequent services that they would get through a new Felix store or Southampton. Scotland is always going to have this problem in trying to develop direct links because we just don't generate a huge amount of traffic. Another problem, which I did not mention, was the traffic imbalance problem. In all our transport modes, there is a directional imbalance in traffic, which makes it very difficult to get direct services into Scotland as well. While it would be great if it could be achieved, I think that it has to be realistic, and I just don't think that it's going to happen anytime soon. Paul Dyn, do you have a view? These are discussions that I think I can remember Alf Baird and Alan and myself having in Scottish Transport Studies Group 25 years ago. I don't think it's a new issue. I think it would be lovely to take—Alf Baird has been leading a lot of the charge on scap of flow and that sort of thing—strong arguments there around why should Scotland be worse served than Iceland when we've got a much better population. If you actually look at the demand, could we create some sort of international terminal on the motorways of the sea perhaps? Yes, I would just say it's something that does deserve what we're looking at. It is at all order to deliver it. Dr Peercheck, you said that Scotland has to be integrated within wider transport and freight networks. Perhaps the panel could tell us whether they think that there are trends at a European and global level in terms of freight and logistics that have an influence on the Scottish freight transport system? One of the dominant trends in logistics for decades has been the centralisation of inventory. That's happened to a very advanced stage here in the UK so that Scotland gets a lot of its retail products from distribution centres in the midlands of England, for example. We're also beginning to see that process at a continental level as companies move away from nationally-based systems of distribution to pan-European systems of distribution. Centralisation applies to production but it also applies to inventory. We see big distribution centres serving wider and wider areas. In the 2012 study that we did for the freight transport association, one thing that we looked at was the development of distribution centres here in the UK. What that showed was that there was a relatively small amount of distribution centre development here in Scotland by comparison with the midlands of England, for example. Therefore, there are heavy flows of product from these centralised logistics centres down south into Scotland as well. As I say, at a European level, that is also happening. That is one of the regrets that the channel tunnel is not being used for this purpose, because the railways have a comparative advantage in long-distance moving. At the moment, there are only eight freight trains a day that go through the channel tunnel. That is the most amazing piece of infrastructure that we are under-using. I would like to see more use made of long-distance rail connections into these more centralised production and warehousing facilities on the European mainland. We are going to come on to rail, so do not worry. Anyone else? The wider train is impacting on Scotland? There is a big resilience issue that is coming along, as well as the ones that I have mentioned about efficiency and customisation. Perhaps the theme that I have not touched on yet is the last mile, where companies create local drop-off points for parcels and those also become—even having a house in a street, as we are seeing in some areas where all the parcels go to and people get to know their neighbours better. There is a whole resilience issue about where we drop-off. Local small businesses can drop-off their parcels to get better value shipments, say that you are a small artist's material shop on a high street. You can now get access to the supply chain enormously much more easily than you could a few years ago. What that leads to in terms of this hierarchy—I talked about the top-down hierarchy in terms of consolidation sectors and our Government—but bottom-up in making sure that this is a big, fast-changing area. As we move into more 3D printing for parts or wherever we get to, there are a lot of areas that local manufacturing and on-shoring is one of the big trends that we are observing. Instead of what we used to do is offshore and get stuff from a few centres around the world, that trend is changing. We are seeing, for certain types of things, local manufacturing making much more competitive and some of that happening as well. I think that watching that space and ensuring that there are—if we are coming on to funding mechanisms—funding mechanisms to support good things happening in that space is certainly something that we could talk about. In terms of what we have just heard from Professor McKinnon and Mr Halden, what do you see as being the threats and opportunities arising from these wider European and global trends? Well, one positive trend is coming from all these things and also the pressure to increase energy efficiency in everything we do, including freight transport, is increasing the proportion of freight operators starting to collaborate. So, they are looking beyond their own operational boundaries to combine those and making sure the resources are fully utilised whenever they go. So, instead of sending a track full and coming back empty, they are now actively looking for something to take back. That is happening across all different transport modes. So, that is a very positive development. It is the collaboration between companies and there is a lot of research and a lot of projects going on in the UK and in Europe at the moment looking at ways of helping companies to do that. It is not only looking for collaboration on full loads, it is also looking for opportunities to consolidate loads to make sure the tracks are full or to make sure we have enough volume to use alternative transport modes. So, that is one thing. The overall efficiency in freight transport systems in the UK and as far as increasing, and that is a very positive development. In terms of threats, the challenge in Scotland is the imbalance in traffic flows. So, because Scotland is not in a central position in Europe, as for example Germany, it is more difficult to balance out the traffic flow to and from Scotland. It is different at the UK level to what is between Scotland and the rest of Europe, because we import more things from England that we sent to England, but we export more to the rest of the world than we actually import. So, making sure we balance out the use of vehicles, tracks, trains and vessels is quite important. I want you to explore further the infrastructure obstacles to the free flow of road freight specifically. A number of road improvements have already been done, and we are aware that further road improvements need to be done. I was quite interested, Mr Halden, when you were talking about freight networks, a specific freight network. Again, Dr Peercheck, you talked about integrated systems, because concerns have been raised about the difference in speeds between Scotland and the rest of the UK. You also talked about the imbalance of traffic flow. Could the panel identify any specific infrastructure obstacles that are severely impacting on the free flow of road freight, and what could be done to minimise that? Who would like to start? In the question, I look at the concept of free flow. It is always a case of which came first, the chicken or the egg, because there would be no flow at all if it entered the road. It was back to the theme of network coverage and what networks do we have. We cannot have every part of every network offering unimpeded free travel. Apart from anything else, there would be no money to pay for the infrastructure that we needed. There needs to be costs in the system somewhere, and there needs to be deterrence in the system somewhere. The question is therefore what costs and deterrence do we put into the system and where. Where are Scotland losing out? For me, this is a big theme about regional development. If I look at EU policy and say when we work on the European projects as opposed to UK ones, Europe is always saying, oh, Britain and the UK are great at doing most things, but appalling at regional development is something that we know a lot about in Scotland. It is one of the biggest areas of UK policy failure is regional development. I would say that when I look at the things that we currently do, can that business in the western house or wherever thrive with the current networks that we have? Does the network coverage allow them to compete? Then we get into so many detailed issues, whether it be resilience and the rest can be thankful or fairies. You can go to hundreds of issues, but rather than me focusing on any specific infrastructure issue to give them, I would not want to give the impression that I had done that work and therefore I was prioritising any individual one of these a higher than any other one of these, but what is clear is that we do not, we just not looked at the networks and it is back to my very first point back in 1991 saying we need to clarify our freight networks and we do need to clarify and then we will say we are target, we will not have congestion in these, we will say well that is a target, we will just make sure that we manage the systems because we do, we constantly manage demand in the systems to ensure that we achieve the target journey times. There are all sorts of things we can do to achieve that. We could have one of our road investigation pieces of work, yes, we have the M74 Northern extension, but when we were analysing that we kind of looked and said actually we could close the motorway junctions in the centre of Glasgow and then you get free flow in the M8 as it stands. Now obviously that was not desirable and it was not what we did, but there are lots of ways you can achieve free flow. They are not always publicly acceptable and they are not always what we end up doing, but managing that free flow is absolutely what we need to be doing. I think that Scotland's transport infrastructure road and rail is good. If you look around the world we are well endowed with a good infrastructure. Freight is not much obstructed at present. If you look back to the 2006 report I think that we quote a figure there that the average freight journey in Scotland was delayed by an average of six minutes. We pulled together various numbers and we could find the time to come up with that figure. That is a pretty small delay. I think that if you redid that calculation today you would find that figure was less because for the reason that I mentioned the M74 extension and the freeing up of traffic flows through Glasgow has made the life of the haulier a lot easier in Scotland. I would say that the main infrastructure constraints in Scotland are outside Scotland. It is the connections with the airports down south, with destinations down south, with the ports down south, where Scottish vehicles get snarled up in congestion in the midlands or the south of England. I think that that is where there is more of an infrastructure problem. Obviously, one could highlight a few bottlenecks. It is often said that the Coatbridge freight line terminal, for example, has rather poor access at the moment. That is an important note for getting Scotland's exports down south. Clearly, for many years, we have been hoping that the M8 would be three lanes the whole way between Glasgow and Edinburgh. I am sure that that will happen eventually. I would not want to give you a list of all the infrastructural improvements that would be necessary. Indeed, I do not really have that detailed knowledge to permit that. Just one other point that I will make is that when we are looking for ways of facilitating freight movement, it is not necessarily by construction, by expanding the network. One can use all sorts of clever means to use the existing network more efficiently and effectively, such as advanced traffic management systems. That can benefit freight traffic, it seems to me. If you look at the ATM, the advanced traffic management systems used by the highway agency down south, it shows that freight has benefited a lot from those initiatives, without necessarily adding extra lanes or building new road links. Perhaps by stepping back and moving the focus off specifically freight and looking at how we improve our roads in general, it comes back to the point that you made about improving free flow, but the knock-on effect has improved freight. Trucks are only about 6 per cent of the traffic on Scotland's roads. That percentage has been dropped since 2006. Trucks are bigger, so you often use a waiting factor saying that a truck is equivalent to two and a half cars. If you applied that, then your trucks would be maybe 13 or 14 per cent of the traffic in Scotland. I often say that trucks are the victim of traffic congestion rather than the cause of it, which endears me to the road haulage industry. The only point that I have to add on everything that has been said is that it is not only the effective traffic management, but it is also the policy measures and access restrictions of encouraging more freight being moved in off-peak hours, so at night-time deliveries. We are looking at ways to deliver to retail units, for example, at night-time or outside the mine, trying to smooth the level of traffic throughout the day. I want to come on and talk in a bit more detail about policy and regulation. Again, it was mentioned in a previous answer about the last mile, because we have heard in previous evidence sessions the importance of that last mile. Could you give us a bit more information on how important you think the last mile is and what could be done to improve that last mile? The last mile is a growing problem. We have increased the proportion of the population living in urban areas and the increase in online retailing. Obviously, the last mile problem becomes quite important. The key challenge is the challenge of freight deliveries. If you have to redeliver a number of times, then you significantly increase the carbon footprint associated with that delivery. But it's not only the business-to-customer side, it's also business-to-business delivering to the retail units and the consequences of the changing character of UK high streets. We're increasingly moving away from retail towards coffee shops and meeting points, this sort of thing. The nature of freight flows in urban areas is changing. That generates a need for different solutions to look at just that. There is a number of urban logistics projects going on in UK and in Europe, and they are looking at different solutions. They are things as, for example, urban consolidation centres. We have an event planned together with Taktrand and Transport Scotland at Harriet Watt on 17 June. We have an event looking at the success stories with applying the urban consolidation centres. That's one of the solutions. The other is the potential of using electric vehicles to reduce air pollution and carbon emissions, particularly if we can power them from the carbonised energy sources. The common theme amongst all of this, they need to be assessed on a case-by-case basis, so there is no single solution that will work for every city and every urban area. There may be a mix of measures that will be required to deliver the most effective bundle of things for this particular place, but there is a lot of work going on and there are opportunities out there. It's interesting because I tend to, in my head, when we talk about the last mile, I think about the last mile being the last mile to a container depot or a freight hub or the last mile that can connect the train and not think so much about locally and urban areas and how that last mile is so important. The term is defined differently. In academic circles these days, we tend to think of the last mile as being the last link in the supply chain to the home, which is being affected by online retailing, but you are right. It can also relate to feeder movements into ports and railways. That's why it's true. This is an area where I've had quite a bit of work over the years and I've been particularly around the town centres. It's the last two miles, which accounts for a huge amount of travel and looking at how to optimise whether the person is walking to the shops or the—some of those small failing stores around Scotland that have been like a wee news agent that's become the local pick-up and drop-off point. This is underpin the entire viability of high street stores. There's a broader social and economic agenda around how we get this right. Even at the most extreme end, we've seen—there's actually been an explosion and there's now dozens of companies around the country setting up just with local volunteers getting out on their bike and doing local freight deliveries from those places to people that maybe can't get out and walk the two miles. There's lots of stuff on there that's about jobs and regeneration and good stuff going on there. We need to look at why some of this doesn't happen. You mentioned Taktran. There's a lot to be learned there from why their consolidation project didn't work. As it were, you looked at what didn't work, what were the barriers and what did work, and this sort of thing, and actually looked at the different things. One of the issues, I mean, transport for London—remember, we were doing some work at British Council shopping centres and working with them on the consolidation centres in London and looking at where those go. One of the big issues is that the shopping centres are saying, well, there they are, where our shopping centres are. That's your consolidation centre points, and you can actually—they've got the handling facilities, they can handle stuff—what do we need other than a partnership between our shopping centre industry and government, but that didn't meet with the procurement practices in Perthincan Ross Council, so they weren't able to follow that through. I think sometimes that might or might not be the right answer, but I think actually just looking at some of the issues that might be acting as barriers to us achieving—we might have the consolidation centres might be out there around Scotland anyway, where the facilities there to do it is just a case of formally recognising it and supporting it and endorsing it, so that a couple of different angles on the local issue are in that. How we handle that last mile, two miles differently, and there's not one solution to fit everywhere. Can I make a point there? I mean, I've based largely in Germany these days. In Germany, the main postal service, the Deutsche Post, have established 3,000 pack stations, so these are like locker banks, automated locker banks, where people can go and collect online orders. So, there's now a pack station within 10 minutes of everybody in Germany. So, that's an infrastructure that's been created over the past seven or eight years with the purpose of trying to rationalise last mile delivery. So, it doesn't have to be to the home anymore. It can be to a local pack station that in the UK we haven't seen a similar development, although picking up on the point that Derek made, I think there are now 25,000 collection points in the UK, which are shops, post offices, community centres. So, we're using, in a sense, our existing infrastructure without having to build this new network of locker banks for online delivery. And railway stations? For London, I found that something like 25 per cent of all deliveries to the front desk of their office was staff getting things they bought online delivered to the office. It was actually nothing to do with the business of DFL, and they're thinking, well, this affects our staff as a big employer in London. It must affect everybody else that's out there. So, they, as a transport employer, therefore said, well, let's create a network, and they put away control railway stations they've created around railway stations. What could we be doing around, particularly at this point, with Abilio trying to make commitments around our railway stations in Scotland and greater community focus? Can we make them more of hubs? There's opportunities there, too. I think it worries me, incidentally, in this area. You hear about the internet of things, how in the future all our appliances will be collected to the internet. That may result in automated replenishment, so your fridge will check when it needs to get additional yoghurt, and there will be an automatic system to order fresh supplies, and that can be abused. If people then get very frequent deliveries of small quantities just to top up the products that they have in their home, I think that we have to be very careful that we don't let this get out of hand. I finally ask about policy and regulation. Are there any obstacles in current policy and regulation that impedes free flow of road freight, and what could be done to make it better? We have a very liberal regime here in the UK. Quantity licensing was removed from trucking in the UK in 1970. It's one of the most liberal systems in the world. Obviously, to some extent, we inherit regulations from the European Commission, but I'm hard-pressed to say that there's anything—I would say any regulatory control that is obstructing the movement of freight. However, I will mention one thing relating to construction and use regulations. I happen to be a supporter of an increase in the maximum size and weight of trucks. I think that that yields economic and environmental benefits. In the UK, we are trialling longer semi-trailers—a 10-year trial—but in other countries, in Scandinavia, in the Netherlands and in Germany, we are trialling longer vehicles, 25m long vehicles that can go up to 50 or 60 tonnes. The rail that we see is very threatening, but there is a lot of freight that is never going to go by rail. I think that what we should be doing is to try to do what we can to rationalise the road freight system. It seems to me that some relaxation in the size and weight of trucks would be beneficial. One sector in Scotland that would benefit a lot from that is the timber sector. We could even limit that relaxation to specific routes that would yield environmental and economic benefits. The Scottish timber industry is competing with the similar industries in Finland and in Sweden, where they can run trucks up to 30m and 74t. That is something. I agree with Alan that there are no major regulatory barriers. The barriers that come are largely because some people object. If we take one that we have been talking about, which has been like what do we regulate the speed limit at in the A9, one of the reasons why that does not happen—we do not put the speed limit up for lorries 20 years ago or whenever—is because lots of people object to say that this will devastate the market for rail freight. Perhaps it will, because if road freight then becomes more competitive, then rail freight becomes relatively less competitive, but that does not need to be a barrier. It just means that part of the consequences of improving the efficiency of the economy are that you need to give bigger support to the other things. It is like an environmental economy. It is a consequence of the decision that you are making. Rather than saying that it is not an unmanagable consequence, it is entirely a manageable consequence. Instead of chasing the lowest common denominator, which we often seem to do—or we cannot do this because they object—what we can do is chase something that everybody can agree to. What does it take to get support from the rail freight to increasing the speed limit on the A9? Just to use that as analogy. It is not about regulation. It is about back-to-partnership building. Those partnerships are about tough negotiations and hard cash, not sitting round tables and trying to pretend all of this is cosy. How much cash does it take to ensure that the disadvantage is mitigated and who is going to pay for it? Managing that partnership structure is real hard business negotiations. I alluded to the third party logistics providers. I am getting better and better at trying to close more of these things by ensuring that all the cross-trading goes on and that they can become genuinely cross-modal providers. We need to remember that we have a capacity out there that it is not that the Government has to go and speak to every individual operator. There are ways that the industry is increasingly working better together than far better than it was 20 years ago when it was so fragmented. It was almost difficult to do good things. Again, it would be desirable to have more product delivered in the evening or during the night. Trucks are a lot quieter now than they used to be, so I think that the environmental objections have gone. This was something that the inquiry did recommend back in 2006, and it has not happened as far as I am aware to any great extent in Scotland. Naively, I think that back then, we thought that the night restrictions were zonal, but when we investigated it, we discovered that a lot of the restrictions on deliveries in urban areas are site-specific. It is when a supermarket got its planning permission that was built into that. It is a bit more of a bureaucratic process than you might think. You would have to get the night delivery restrictions relaxed by site, but I think that it is worth doing. The research that has been done down south suggests that there are environmental and congestion benefits and economic benefits from doing that, so that is one regulation that we could look at. Mr Halden, going back to something that you said earlier, can you explain for the benefit of the committee what is an urban consolidation centre and which parts of Scotland are you thinking of? Each urban area—we cannot take the 40-ton juggernaut to the door of many shops, so what we need are the right type of vehicle and the right type of road. Where do we need the white van? Where do we need smaller trucks? How do we consolidate loads so that different companies can have pallets all going on a common large vehicle or a train from a consolidation centre? If we were to try and say, could we identify across Scotland, in every city, that what this network of freight consolidation centres looked like, would be a worthy outcome to the goal that I wrote in the document 24 years ago. I am sure that people before me had done many times that it is something that we have been trying to do but just have not achieved. We need this hierarchy with nodes and links. If we do that, we can seriously—it is not something that industry can do by itself—involve so many issues, the planning issues, the organisational issues, that if we were to establish that clarity, perhaps even use public purchasing power to buy some land, but actually probably might find the lands there and it is by partnering and this sort of thing. But if we were to just identify these nodes, preferably rail-connected nodes around the country and say, this is what the consolidation centre looked like for Edinburgh or Perth or Dundee or whatever, then we can dramatically reduce the large vehicles going right into the heart of the city centres. Dave, you have some questions. Are freight grant schemes working in your experience? I think that they have worked well in the past. I do not think that there is sufficient uptake any more. I did check it. I think that 4 million pounds have been allocated to the freight facilities grant for this year, but in recent years it has been underspent. Now, you could take the view that all the low-hanging fruit has been harvested, because those schemes have been in place since the mid-70s. In that time, they have helped to divert a lot of freight on to rail and the number of kilometres has reduced quite substantially, but there are just a few opportunities now for the use of these grants. I do not think that the problem is so much the application process, because I think that that has been facilitated over the years. It may just be that we have exhausted all the obvious opportunities for applying these grants. You are right on the freight facilities grant, but it is more than underspent. Hasn't been spent at all since 2011. It was quite worrying. In fairness, I would say that, in your point about timber, if you look at waterborne freight grants, by brothers in Corpo, I have got nearly £1 million to take timber off the road on to sea, which is obviously very positive. Certainly, experience talking to the port operators would suggest that it is quite a tricky and complicated experience. If I remember correctly, convener, Mentro's chief executive was the last port to get freight facilities grants before 2011, but it employed a consultant to make sure that all the boxes were ticked. It disappeared to me. There are maybe some barriers there. We have been involved in preparing freight facilities grants. It is not an unduly onerous process. I think that the issue is what I was alluding to earlier, that the criteria are perhaps not broad enough, that the environment is not the only market failure in the freight transport industry. There are a whole range of social and environmental. We are just looking at one wee bit with the missions there and saying that is the only market failure. The regional development focus was the most obvious one I was concentrating on there, that I think we need something like a freight investment fund or something like that, renaming or repackaging of it as something much more useful. I think that the reason we kept it in Scotland, if I had to observe as a consultant looking in on the machinery, is because people did not want to lose the money, not because they particularly felt that there was anything. They felt that there was a need for something like that, but it was important to recognise it, but not that they thought the scheme as it stood was brilliant because their current rules are really quite restrictive about just specific emissions and specific trips. Again, my experience in the past putting some questions down on memory is that the schemes were more successful for rail than for sea. In fact, I have not got specific information in front of me, but certainly in questions in the past, there were very few for sea was mostly about rail. Is that your experience as well? Yes, in terms of freight. The type of freight facilities grant in the past, which worked quite well, was where it was to a dedicated installation, like a factory or a warehouse, operated by one company, and they had quite a good idea of how much freight would be generated years into the future, so you could see what the stream of benefits would be. What is more difficult is if it is a logistics provider that is applying for a grant, for an intermodal facility, when they are not all that sure about who their future clients will be, what the volume of business will be years, and so it is much, I think, harder to meet the requirements of the application where you cannot come up with these fairly firm predictions as to what the use of that facility will actually be. Of course, in Scotland, we have had some examples of freight facility grants which have not delivered the benefits that were expected of them. In Grangemouth, for example, I think that the largest ever freight facilities grant did not generate anything like the traffic for rail that was anticipated. Could you put your finger on fire that was the case? Just a company changed its strategy. This was, I think, when BP was operating out of, so, yes. Obviously, there is a certain risk and there is always a possibility that the client will change. The logistics strategy or the ownership of the business will change and, therefore, you may not. I think that I am right in saying that no money has ever been clawed back by the public sector, so they take the risk and the danger is that the money then is misused. Obviously, our enquiries about freight rather than climate change are a factor. Obviously, I think that we are all concerned that we are not meeting our climate change targets, and clearly transport is a big emitter, notwithstanding my point earlier about 50mph increase in speed. Clearly, this makes a lot of sense to Government to try and push freight off-road on to rail and on to sea. All the witnesses have hinted about this. How can we improve the schemes that we currently have? A lot of this is not actually about big sums of money, but just enough money. This is about the Government's role as an organiser and facilitator to enable good partnerships to happen. That is the bit that seems above all else to be missing to me. We need, in many areas, when you look at the changes going on in the world, step changes in for infrastructure investment to rebuild our smart cities of the future journals. There are really exciting things, whether it is stocking fridges or not, I do not know. I do not think that anyone does, but what we need is to tap into those. Government can share in the revenue streams by carrying some of the non-market risks up front. The question is about clawing back the money. The clawback should be linked with the whole delivery of the process. It is how we use the funds that we have, how we partner, how we facilitate those types of projects and enable them to succeed is what the future is about. It is certainly above all else. If we look at some of the schemes in the national planning framework—this is a certainty for 30 years—some were changed within weeks. If I was an investor and I decided to commit to a billion in land value uplift because I thought that we would get that road scheme or that railway scheme or something, then we would lose that certainty after a week. The reason why we are short of money and transport is because the Government keeps changing its mind about what it is going to do. The more certainty we have—it is a common theme that I keep coming back to—it is not about the actual cash, but about the certainty about what is going to happen. That then unlocks the cash. The poor operators who may have picked up the evidence that we took recently, the points that they are making informally from me, visited Grange Rathen, Aberdeen and so on, and in witness sessions where you have very few constraints by sea. The constraints that I cover by rail, unfortunately, are in high restrictions. The fact that so much of the rail network is a single track is what stops the flexibility. Of course, there are some constraints by sea, but there are not the same constraints. Do you agree that that is a general thrust? Absolutely. Those are expensive constraints to overcome. We need big volume increases on rail networks to make sure that they are properly justified, but we do not even—even the west coast main line is not free of—there is stuff that is even more obvious than that. So, yes, absolutely, we need to resolve some of these rail gauge issues. Do any other witnesses have any other comments on improvement? You mentioned climate change and decarbonising freight transport. One thing that we have to do is to look at the relative cost effectiveness of all the ways in which we can do that through public intervention. The focus here has been on grants to support moral shift, but that is only one of a whole panoply of things that you could deploy to try to decarbonise freight transport in Scotland. One of my big disappointments in the UK is that both in Westminster and also in Scotland, the freight best practice programme was abandoned, which was designed to advise companies on how they could operate their vehicles more energy efficiently. The UK pioneered this. The UK was the first country in the world to have these green freight initiatives. This was way back in the 1990s. We abandoned ours, but they are now proliferating around the world. In the States, in the US, there is a smart way programme. In the rest of Europe, there is a green freight Europe. There is China, green freight India. I think that the time has come to go back and look again at the cost effectiveness of these programmes, which provide advice and guidance to companies. They also include things such as driver training. Training drivers to drive trucks more efficiently is about the cheapest way in which you can cut CO2 emissions in the freight sector. I am not against freight grants, and I think that they are to be encouraged, but it is only one policy instrument, and there are lots of other ones that have to be considered. That is not, for the first time, predicted my next question about best practice across the world. Unless you have provided it to the clerks, would you perhaps give the committee clerks some information about this best practice, because I was not particularly aware of that. I am sure that other committee members would certainly find it very useful. Do any other witnesses have examples of best practice across the world that is beyond just the basic freight facility grant that we could perhaps look at as an exemplar of best practice? I think that there should be real encouragement for the benchmarking clubs that, like Logmark, the Chargers of Logistics and Transport runs, has really helped companies to say, why are we using 20 per cent more fuel on similar operations to another company? Actually, just constantly benchmarking performance creates competition in the market that helps everyone do better, and I think that type of thing I would probably add to what Alan is saying as well. The first one is CLT and freight transport associations are quite active on that. The freight transport association has a logistic carbon reduction scheme, which is a group of companies interested in reducing emissions from the logistics activities. They also have annual awards for most fuel-efficient operators, so they have a number of categories. One is excellence in model shift, one is for most fuel-efficient operation. They benchmark the members, and they also give them awards every year to encourage positive developments in the sector. The other thing, going back to the freight grant schemes, model shift is clearly an important issue, and we clearly want to encourage more movements of freight by more sustainable modes, whether it's a water or a freight, but the road transport reminds the key transport mode in the UK, and this is unlikely to change in the future, so we really need to look at ways to decarbonise movements of freight by road. One thing we're doing at Harriet Watt at the moment is we were commissioned by the Committee on Climate Change to produce a report on the ways to decarbonise road freight transport in the UK. We're looking at the period for the fifth carbon budget, which is 2027-2035, and the report should be out in about a month or so, and that will give you an indication of the most cost-efficient ways to decarbonise a road freight transport as well. Thank you, convener, that's all my question. Following on from my earlier questions about free flow of road freight, I want to ask the panel about free flow of rail freight. We've heard in previous evidence sessions problems with loading gauge restrictions, with not long enough passing loops, lack of double tracking. Specifically, what infrastructure obstacles do you see to the free flow of rail freight and also in the link of rail freight to road and sea, and what can be done to overcome those obstacles? I don't think I can personally add, in terms of detailed projects, the very detailed evidence that you'll have had from others, like the rail freight group, in terms of all the individual detailed projects. The test that I would apply is the one that if we were, because we didn't have effectively the right gauge to inferness, and we couldn't get that railway line was about to close because we could no longer say, some have argued that we shouldn't really, in Scotland, have rail services north of Perth, and indeed, north of Perth is actually all going to be loss-making or certainly, that these economists would take that thing. Now, if that would sound fantastical to you and say, we would never do that, then now is the time to act. As it were, what you don't do is leave a political mop-up that costs hundreds of millions to something that can be prevented with a few million now. That's the way I would look at it in terms of we need a clear plan decision about what sort of rail network coverage we want in Scotland. We want railway lines going to Cyle of Le Calche and Wick, because that's what, as a country Scotland wants, we need to work at how to make the best use of that resource and how to add value to that resource to make sure that what's a very expensive resource is as well used as possible. I think that that's what certainly the team at high trends has been trying to do as much as possible. There's a lot of work going on there, but if we've got that clear decision, it's a back to this thing about networks. We need to define what sort of network coverage do we as a country need, and then once we've got that network coverage, what it looks like, where are the hubs, what types of networks is it motorway, is it blue line stuff, is it dual carriageway, is it, and the character of, you know, so actually we need clarity. I think it had to be a political intervention to say which cities do we have dual carriageways from. I mean, that's dreadful, you know, that actually that should be coming through, I argue, a normal transport planning process that says what should our networks look like. So there are actually some very important gaps here in Scottish transport that we don't know. We haven't even made up our mind where we want what we want to be blue lines. We haven't even got a blue line between Glasgow and Edinburgh. You know, it's one of the most, Alan's talking about three lanes, you know, but I'm actually highlighting, you know, if I was from Hong Kong or North America and let's say what is this tinpot country, they haven't even got a motorway between their two major cities, you know, and I think we need to look at that sort of thing and people might say they might not want to use the railway network immediately, but what's the option value of actually having that there to the country? And so I think defining that, making sure we're investing in it, so the detailed schemes do we spend money on any individual? Yes, let's look at all the stuff that's out there, the people at the rail freight group and forward and stuff like this, and start to try and prioritise that and say, this is how we develop our network in a planned, organised way. Everything's far too fragmented at the minute. So would we be better looking at what we want, deciding what we want, and working back the way rather than doing little bits of stuff to get us to somewhere that we've not actually defined? Absolutely, that's a really good way, I think, of putting what the policy, it was a brilliant policy document produced by Scottish Government called Travel Choices for Scotland back in about 2000, and it started out the very first line, and it was saying things like, in the future, our transport policy will be what sort of Scotland we want, not patching piecework, piecemeal stuff around the networks. Absolutely, that's where I'd be coming from and saying, you know, we need to get back to that sort of strategic focus and make decisions about what the country needs. Professor McKinnon. I don't have a sufficiently detailed knowledge of the Scottish rail network to sort of pinpoint areas where the loading gauge could be increased or the passing loops extended, but what I would do is suggest that we'd be able to take a step back and say what is constraining greater use of the rail network in Scotland by freight, and infrastructure is part of the problem, but it's not the only cause of this. I cite the case of the gauge enhancement on the line, I think, from Dundee to Aberdeenon to Elgin, which was quite expensive, and as far as I'm aware, little use has been made of that. So what we need is the railways perhaps to be a bit more entrepreneurial, to improve service quality, to provide a more competitive service. So merely releasing an infrastructure blockage often isn't enough. You've got to look at how the railways are actually going to exploit that as well. Back to the point, Mr Halden, that you made about partnership negotiations, it's not just about different freight organisers or companies talking to each other. It's also about government talking to freight companies to say, if we do this, will you use it? And if you're not going to use it, why not? Yeah, the risk sharing in all of these agreements is absolutely critical, and it's one reason why I am often quite critical of grant schemes, because if we look at what often we give the grants to the worst performer, where the way that markets work generally is the best performer does best. So often, government acts in anti-competitive ways through grant schemes to support the worst performers, and supporting the worst performers actually undermines the successful businesses and helps the unsuccessful ones to do better, which is not always a good strategy. Do you have anything to add? No, I fully agree with Alan. We need to understand why the railway network is not being used to the extent it should be used to, and then work from there. So taking a view of rail freight providers and also potential rail freight users is an important part of the process. Do we have enough terminals, hubs? Do we need to build more terminals, or what we have? Is that sufficient? It's often said, taking a UK perspective on this, that there is a lack of rail freight terminals, but not so much in Scotland, it's more down south. I mean, there's been a lack of such terminals in the London area, for example, and that's constraining the long-haul movement of freight by rail from Scotland down south as well. I think—I know that there are studies that have been done on this, and dry ports, and your adviser, I know, has done work in this area—I think personally that we've probably got enough terminal capacity. I did mention earlier the importance of the freight line or terminal in Co-bridge, where I think that local access is an issue there, but overall, I think there's—I can't see an obvious need for a big new terminal anywhere. A regulation point of view, is there anything else that Government could or should be doing, or does it come back to the points that were previously made about having that strategic vision and partner negotiation and closely working together? To pick up on the chair's point about markets, markets are often misunderstood. They're actually very simple, and the rules under which they operate are those defined by Government. So, if you don't like what you see in the markets, then that's a function of the regulatory rules that you have created that define what that market is. I'd love to see some of the markets incentivised more in social, particularly social—there's been a focus on environmentable, particularly social directions, and that can be done through regulation in lots of ways. Some of the things that I've hinted at, like changing freight facilities grant into freight investment funds, partnership approaches, working together, addressing the wider social and economic issues, as well as just this environmental versus economy type war, that kind of people time to characterise, that I think the social dimension is so often missing from what we're doing, and actually, when we unlock it, we see all these great things, like the hundreds of extra businesses that I'm talking about in the towns, and they are the things that really excite me and this whole agenda of what we can do. How do we unlock the potential, and so the question about what is the regulation? Yes, the sort of regulation is also about how funds are managed and partnerships are built, and what's the regulatory framework within which they operate. For example, I always argued that the regional transport partnership ceased to become partnerships the minute they were made statutory. If you look back to my response to the consultation on that 15 years ago, that was my argument then, as one of the people involved in setting up SESTRAM, that they ceased to function. They know that it's not a partnership if it's statutory. Each partnership has to have a project-based delivery focus, and partnerships are absolutely critical, but the minute you try to create a new organisation, it then ceases to be a partnership. Perhaps hinting at all the good stuff that regional transport partnerships are doing is saying, what perhaps, what does that partnership look like if we regulate it slightly differently? Without doing that exercise, because I'm not trying to say that I've got all the solutions in there, I'm just saying that there's maybe some space in there to think about how we create those partnerships. If a refresh of how policy is done and how we view what we could potentially do, rather than actually change anything? Yeah, I would start by taking stock of what we're doing well and try to do more of it than try and say let's just do it. And build on that? Yeah, yeah, absolutely. Professor McKinnon? Just returning to what I mentioned earlier about taking a European perspective on this, so the European Commission in its 2011 white paper came up with this very ambitious target to get 30 per cent of freight moving more than 300 kilometres on to the rail or whatway network by 2030, which would fundamentally re-engineer the modal split across Europe. And what it's doing is it's established nine corridors and it's focusing its attention on shifting freight on those corridors. Now Scotland unfortunately doesn't connect into any of those nine corridors, right? But the railways have a comparative advantage in long-haul movement, right? And I find it remarkable that almost over 20 years we've had the channel tunnel and still we have very little freight from Scotland going into mainland Europe by rail, right? So we just have to return to that subject. I was actually in a committee that was set up in 1988 before the channel tunnel opened, which looked at the ways in which Scotland could maximise the benefit that it derived from the channel tunnel, both on passenger and freight. And if you look at the projections that we made back then of the amount of freight from Scotland that would go through the tunnel, none of those have actually come into, have actually happened. So at some point we will have to use that bit of infrastructure more effectively and we'll have to send more of Scotland's imports and exports to Europe by rail through the channel tunnel. I think so, I think so, yeah. Dr Peercheck. Yeah, there will be opportunities in the trans-European transport network. So with all the corridors I think it's important to make sure Scotland is well connected to that. Okay. Okay. Professor McKinnon, just on the channel tunnel, what is the reason why you think there's been the lack of uptake? Oh, a number of things. I think many people perceive it as a passenger rail network, right? But there is still, you know, excess capacity that could be used for freight. That's a more expensive, because obviously, you know, the economic… Yeah, the economic… … would shift from road to rail in such a point that you made earlier, is it the same reason for the channel tunnel? Okay, so cost was an issue. Illegal immigrants was a problem. In fact, it still is, you know, so there are very tight security restrictions on freight trains moving through the channel tunnel, which is a problem. But if I cite the case of Procton Gamble, it recently started running a train. It was difficult to negotiate that with the rail authorities, but it now works. It runs, I think, from Leel through to London. Dedicated train, just for themselves. So if a company makes a serious effort, they can overcome these various barriers, actually, to achieve such a service. I'm picking up a point that Derek mentioned earlier. The railways, it seems to me, are very risk averse. You know, they're very hesitant about launching new services, unless they're guaranteed regular flows over a long time period. I just think that they could be a bit more entrepreneurial in attempting to do this. Now the situation may now change, because I understand that the ownership of the Euro-tunnel is now entirely with France. I think that Britain is so would its share of the Euro-star service, but I think that's the Euro-star service rather than the tunnel itself, so I think that's already herring. Thank you for that. Mike, you've got some questions on the ports. Yes, thank you, convener. I intended to ask three questions, but with your indulgence, I think I'll consolidate them into one question. I think that some areas have already been discussed, but I'm interested in ferries, and I just wondered what might be done to encourage some of the freight off the road on to cargo ships or ferries. Bearing in mind that we've only got one cargo ferry operating a direct route to Europe, what could we do to make cargo destined for Europe go directly from Scotland rather than down to England? And are there any policy or regulatory obstacles to the free flow of sea freight in Scotland? Looking back to some of the work to get the recithes to Zbrygaf ferry off, we were working on Scottish Enterprise's transport strategy at that time and some of what they were actually doing to try and approach something that was important, seen as important for Scotland's economy, we've always had a ferry link from there. Looking back at how the rules were kind of looked at in as tactical a way as possible to create the freight facilities grant to make all that happen. I reflect on that in the context of what I've been saying around partnership. If we could provide the certainty 20 years ahead that the Government was a stakeholder in both the risks and the reward, i.e. earning money for the Government, like in many parts of Europe, would be fairly standard practice with ownership of ports and stakes in that sort of thing, then what we could do is give the industry the certainty that there would be a link there in five years' time, because if every five years we have another crisis, oh will we lose this route, then if your logistics, haulage company or whatever, uncertainty is the thing that you do what you want least. You think actually we'll just stick with road or go with rail because it will be there in 20 years' time. Will the ferry be there? I'm going to plan my operations around that. That uncertainty is the fatal flaw, but Governments are going to be there. If this is Government-backed, it's like having a Government-backed bond that Government is a stakeholder in the operation of that ferry service somehow as a partner that shares in the risks, shares in the rewards, that type of partnership I would see is much more progressive than just saying, oh here's your five million, go away and do what you can. That's the shift. It's following the same theme, but it's about saying realistically there will always be a freight link between Versaith and Zabrugin. If we'd given the industry that confidence, that would really, really help. Yeah, because it's not just the Versaith ferry, I mean it's also the container services from Grangemouth to Europe, connecting deep-sea services there. I understand that in terms of port capacity, we've more than enough capacity to meet demand for the foreseeable future. I think at Grangemouth they reckon they could handle up to 400,000 containers and we're well short of that at the moment. In the case of Grangemouth, if you look at ports around the world, port capacity is tending to move out of river locations on to coastal locations so that they're non-tidal access. I know for many years I thought it'd be sensible for Scotland maybe to develop a new port on the coast, but then again I moved to Hamburg. Hamburg is Europe's second port and it's six hours steaming time up a river. Why? Because it is well connected to inland infrastructure and you could say exactly the same of Grangemouth. You've got the problem of the steaming time up the river, the dredging cost, for example, but on the other hand, Grangemouth is so central and it's so well connected into the road rail networks. I think that it makes sense to retain that as our main container port. As for the recite ferry, it gets back to what I said right at the start, that the flows, international flows from Scotland are quite thin. If our economy was to greatly expand and we used forms of manufacturing that generated lots and lots of freight, then all these services would become more viable. For the foreseeable future, given the volumes of traffic that we have, that's not going to be the case. Of course, holliers and manufacturers in Scotland have a choice. They can either use the direct service or if they feel that it's more competitive, they can go down to Teesport or Felix store or wherever. I think that it's right that companies have that choice and I think that the Scottish Government has done the right thing in providing a subsidy to maintain that direct link. If at the end of the day it fails, our exporters will still find alternative routes to market to ports in England. It may be also an issue of the policies at the big port, so sometimes they prioritise the railway connection to the hinterland as opposed to feeder services because having bigger ships has more revenue making than having smaller ships on the feeder services, so the issue may not necessarily be. We need to understand the entire system to see what the problems are and how to how to mitigate those. That seemed to me to be an important one and I'm just a bit concerned that the committee had a visit out to Grangemouth recently and the plan to dredge it fairly soon to increase the depth because there's this trend for bigger shipping and they're forced to do that, but I just wonder at the wisdom of this incremental approach if you see what I mean. If you get to a point where you reach the physical limitations, you just can't reasonably dredge it any deeper and how long forcibly, for how long this trend of bigger ships is going to continue for, so at some point you make the decision and say, you know, we need to take a fresh approach and you know, if there are physical limitations here, do we do it somewhere else where we have a genuinely deep water port and does that open up other possibilities? I'm just interested to hear your thoughts on that. I'll be the chairman of the Scottish Transport Study Group and we've produced a discussion paper on this very subject 25 years ago when we looked at the possibility of having a coastal port in Scotland, I think at Dunbar, or maybe Cochensie or somewhere, very, very expensive because it's not just the port you have to construct, I mean it's all the related infrastructure as well, the road links and the rail links and so forth. As for dredging, Hamburg, which I mentioned earlier, recently received the world's biggest container ship, right, 19,000 TEU, which went all the way up to Hamburg, so I mean that the German Government can happily dredge the Elb, you know, so I think, you know, that the ships we are talking about are the smaller transshipment vessels, you know, so I would have thought for the foreseeable future we could probably sustain Grangemouth with, I mean, if we were ever to have a deep sea vessels coming back to Scotland directly, then I think your point would be valid, but I think so long as our services are going to be transshipment services, with smaller vessels linking to Rotterdam or Zebrug or Felix Stowe, I think we could just continue to dredge the forth. Adam, I think. Just to follow up the port questions of a can, we've had some evidence from Professor Al Baird, who suggests that the port infrastructure in Scotland hasn't been well developed, and he has been a lack of investment in ports, and he points a finger at the unconventional ownership regime in Scotland's ports, which seem to operate very much in their own interests, and it could be argued that they are almost monopolist in their approach. Do you think that the Scottish Government should be looking at this particular situation in terms of trying to create more of a driver of economic growth through our ports? Is that something that we should be focused on in this committee as well? When I mentioned that there was a study done 25 years ago, it was done by Al Baird. He has been very critical of fourth ports and particular under-investment in Grangemouth for many years, so he was advocating to develop a new port, presumably with a new port operator, to create a bit of competition for the port. I have some sympathy for his arguments. I think that fourth ports have monopoly control of the fourth estuary. I don't know enough about the port sector to say how we could alter that situation about whether we could change the ownership structure. I'm out of my depth and I'm afraid of that. Mr Halden mentioned the lack of entrepreneurial activity by real companies, so can we put the same charge to the port as well? Scotland is a relatively small country, but we can be the best in the world at some things. The view that I would have of that issue is that we were looking at this 25 years ago, knowing that the economics of the maritime sector were changing and moving to bigger and bigger boats. Was there a real opportunity to go out and make this an area where Scotland was one of the hubs? I'm not sure that that agenda has evolved quite in the way that we're visiting. I'm not the expert. You need to speak to on that. Alf would argue very strongly that the boats are getting bigger and bigger and we're going to need something like that. Certainly, I'm aware of lots of world cities that are currently looking at the port infrastructure and saying, help, what do we do? The maritime industry globally is changing very fast and there are a lot of really important hubs in many countries around the world that are looking and saying we just can't continue to operate anymore, it's going to have to be somewhere else. Could there be consolidation? Could there be pace for scap of floors? Perhaps there could, but we've got to be sure that we can genuinely get that competitive advantage and be the world centre for it. I think all of the stuff that I'm looking at is about very reasoned judgements saying, let's not be second best or third best or whatever, let's go and try and say we can be the best in the world at whisky, that's great, let's go and do it, what else can we be the best in the world at? That requires ensuring that we've all aspects of logistics and transport to ensure that that absolutely happens and that we're building an economy around whatever it is we want to do and it's that area of what would be the economy would be building around it at scap of floor that, as it were, makes it hard to see how all the cross subsidies work between different sectors of the economy, but they might be there, they might be things that can happen. You would tend to agree with them then that we should be looking at a Scottish maritime policy, which we don't have at the moment in terms of... I think the lack of clarity in what we want to do, back to what I was saying about travel choices for Scotland, the lack of clarity about what Scotland, Scotland we want is the number one thing holding back Scottish transport. Okay. Can I change the subject on to efficiency and carbon emissions? I think we've really had a fairly extensive discussion about programmes that you were advocating in terms of reducing the carbon footprint. What about the use of new technologies, vehicles, transport information or logistics technology that can make transport operations more efficient, less costly and more sustainable? Have you anything to say on uses of technology? I'll start on this one. We need a range of measure. Technology is on the one side to the solution and it's not a single technology. We need a whole range of measures and some of these measures will, for example, in the road freight transport sector, some of the technologies will come in as a standard fitted onto new vehicles, some will be retrofitted by the operators if there is a clear economic case for doing so, but where the big savings come in is actually the way we operate our freight and logistics systems so you can make a vehicle more efficient. So, for example, you train the driver that will probably give you about 10% of improvement in fuel efficiency, but if this driver then drives a vehicle that it's only full one way and comes back empty, that's not going to drive the overall emissions. Where the real saving comes in is having the same vehicle full both ways because then you replace four separate movements with effectively two movements instead of having two trucks, you're now sending one. So, I think we need to look at the whole package of things. We need to look at the new technologies and there will be new fuels, there will be a new mix of fuels, there will be alternative powered vehicles, there will be improvements in IT systems supporting freight systems, there will be improvements in our dynamics, but also a very important part to the solution is actually looking at the ways we operate logistics and how to make the process better, how to encourage companies to collaborate with each other, how to make the loads visible, so it's easier to find something to take back and how we can facilitate that process. And if you want an estimate how all of this will add up to the total carbon saving, there is a report coming out in about a month or so. Okay, well hopefully we can print that into our report. Okay. Just to elaborate on what Maya said. In the work that we've done on the decarbonisation of logistics, we said that there are basically five things that you can do. One is to restructure your supply chain at a strategic level, just to reduce the demand for transport. Level blood is modal shift, as we've discussed, to get more freight on to low carbon modes. The next thing is to use the vehicle capacity more effectively. On that point incidentally, what we don't have for Scotland is statistics on the utilisation of trucks. We've got the data for the UK as a whole, like the load factors and the vehicles, the amount of empty running, but we don't have figures for Scotland and that'd be quite useful to have. Next level down is the fuel efficiency with which the vehicle is driven. There's a big win there because there's a lot of research to show if you train drivers to drive the vehicles more fuel efficiently and then you monitor their driving behaviour using telematics, that can save you 5, 10, 12 per cent on fuel and CO2. The final thing is switching to alternative fuels as well. Just on that, again, since you're the infrastructure committee, there's another infrastructure that we haven't discussed here, which is providing infrastructure for the use of gas, gas-powered vehicles in Scotland, to encourage a shift to gas. Of all the biofuels, the one that comes out clearly as yielding big greenhouse gas savings is biomethane, but at the moment we don't really have much of an infrastructure in place to deliver that. I'll go, or one said, in trying to deal with climate change. It's not a silver bullet that we're looking for, it's a silver buckshot, and that's true because there's a whole spread of things that we could apply here to try to decarbonise great transport. I agree with all the collaboration points and I suppose that the key point is that technology is an enabler to be able to do good things. It's not going to fix any of the problems in itself, but where it is fixing things very quickly and short action immediate good things can happen is in our towns and all the local delivery stuff, how people react, how they behave in their towns, how we manage all the local delivery stuff, and there's huge benefits in there of deliveries coming to a few local points. That's where I would focus the technology type stuff, obviously the vehicles, perhaps not just to miss this issue. If we are to do things like the A9 dualling now, then we really don't want to miss out on ensuring that set up for intelligent highways. Alan's referring to some of these in Germany, in Canada, in Netherlands, all over the world. People are doing trials of the sorts of technological infrastructure that will enable the speeds to be managed in the most optimal efficient way, lorry trains, or whatever. All of that is coming. We're not quite there yet. Having been someone who worked on the A9 and fighting as hard as we could on the current A9 to get as much of it built as dual carriageway as possible then when the rest of Europe was being built as dual carriageway, it would have only cost an extra 15 or 20 per cent to build it as dual carriageway in the first place, which the rest of Europe did. It was incredibly short-sighted decision to build it single carriageway, and it was only done because somebody was reading a London-based highways capacity manual that said, with a flow of 10,000 vehicles, we build this as single carriageway, which might work in Surrey, but absolutely was never, ever sensible for Scotland. So it was, in my view, as a consultant working on that, crass incompetence of government to build it as single carriageway. All I'm saying is, if we're rebuilding it now as dual carriageway, for goodness' sake, let's not miss out on the next generation of technology. But one of the reasons, if we look at, say, the French and why they've got so much money for transport infrastructure is because they do toll the long-distance roads. Every country's got what's acceptable, what's happening. We have to work out what's right for Scotland. We have to get the right revenue streams, right for Scotland, and we have to invest in the right things. I'm just saying, if we want to spend billions, let's make sure that we don't miss out on the technology things and actually make sure that it is built as an intelligent highway now, or at least that the capability to make that happen. Opportunity to raise the point about A9 dualling. At the same time, should we not also have some sort of policies about ensuring that when we are developing roads that we have a statutory duty that there's a fibro optic cable down as well for broadband, and even mains gas, and as my ex, the convener of Highland Council said at one stage, the great advantage about putting a fibro optic cable on the A9 is you wouldn't have the same problem with snow clearance, perhaps it's like ting and cheek point, but it does make a little bit of sense. It was always a mantra in one of the offices I worked in that always put down a few extra underground ducts because you don't know what you'll be using them for, but you will be using them and it's just a case of they cost nothing to add to the road and they build in enormous flexibility for what you're going to do in the future, so just do it. Generations into the future. Germany is experimenting now with electrified highways because near Berlin there's a two-kilometre test track and they've developed trolley trucks which can run either in overhead electricity or on diesel fuel or whatever, and that's been very successful, so they're now trialling this on some of the Autobahn as well. There'd be no point in us doing that at the moment for climate change purposes, given the electricity mix that we currently have, but if Scotland fully exploits its renewable energy technology and we decarbonise electricity, then there may be a time in the future when it'd be sensible for us to electrify maybe at least one lane on some of our more heavily trafficked roads, so you may think of it as science fiction but it may come. No, that's actually what I was alluding to in terms of getting the Canadians doing that as well and what I'm saying is absolutely, it's that type of thing that we need to be looking and saying well we don't, the idea that we would build a road now and we're talking of oh by 2020 or 2030 we might have finished this, by 2030 we'll be looking at very different technologies, it will just look silly if we build a dual carriage when not put this stuff in. We've just talked about Government decisions a long time ago but now we want to talk about Government support just now. How do you see the role of Scottish Government in terms of helping with the interconnectivity of freight transport and also given the financial structures that are in place, where would you see the priorities in terms of infrastructure? Well we've obviously identified a few bottlenecks, if you like, in the network already, Coatbridge, the M8, maybe dualling the A9. I often feel that the main impact that public policy makers can have on transport isn't so much physical in terms of infrastructure, it's more in best practice programmes and facilitating because potentially they're where the big benefits are. We've spoken a lot about collaboration. As I was involved in an EU funded project called CO3, which has worked with a number of big companies in Europe, encouraging them to share their vehicle capacity and to share their warehouses, which they do for economic reasons, but it yields substantial environmental benefits, it reduces the amount of traffic and potentially those have more impact. In a country that already has good infrastructure, and I've been very complementary about the Scottish infrastructure, I think that any improvements are likely to be fairly marginal in the future. There would be a case for a more ambitious programme of infrastructure development if we could see the traffic volumes rising steeply, but we're not seeing that. Certainly the freight volumes are pretty well stabilised, even car mobility is not increasing very much. There's a question mark over just how much additional infrastructure capacity we require. Therefore, I would like to see public policy makers shifting away from the hardware, from the physical infrastructure, to more towards the software things, IT-related stuff and also encouraging changes in business practice as well. Are you suggesting then that it's more about co-ordination and collaboration than building infrastructure? Yes, exactly. Breaking down the silo structure that exists in the transport area and getting the modes to work more effectively together. Another thing that we discussed back in 2006 is looking at the portfolio of freight transport services that you will require in Scotland to be a prosperous country, which goes beyond modes. Within any transport mode, there's a range of services. We have to make sure that we have a healthy competitive market for all those different services within each of the transport modes. I think that there's a role for the Scottish Government in trying to ensure that. It's this point about the hubs. If we've got hubs where anywhere in the country it's very easy to see how you can plug into the railway network or how the road network all comes together. Multimodal thinking. There are some questions in the inquiry documents about sustainable modes. I just wanted to make the point that all modes are always the most sustainable ones sometimes. It's important that the minute we start saying, oh rail's sustainable and roads not and all that stuff, or walking sustainable or whatever, walking is simply not a sustainable way to move heavy loads to China. We actually have to look at which mode is the most sustainable mode for each thing, and this quite comes back to the very first point I made. It's about hierarchy of nodes and the hubs. If we make sure that we have planned that effectively and we haven't done, and everybody seems to agree that we haven't done, and that was what we were saying 30 years ago, that we should do, and what I'm saying is that everybody still seems to create something we should do, so I'm saying if nothing else comes out of this, then could we start to create some clarity around answering it? We do a lot of this in passenger transport for what we call accessibility planning, where we say, let's start at the house and say, if I want to get to buy our fridge, how do I get access to that? Where do I go? If I want to get to hospital, what do I get access to? It's just an audit as a reality check and what life feels like on the ground for the consumer, for the resident, for the business. Can they actually succeed? It's so enlightening because when you look at that you say, actually, they can't succeed. That's why they're complaining about it. To answer your question in the most simplest type of way, the reason why you feel the heat as politicians I would imagine is because actually when you stand back from that user focus of the system as a business, can I actually use the rail system? No, I can't, actually. That helps to define in a totally non-modal transport way what it is you need to do to allow people to get access to the markets, to their suppliers, to whatever it happens to be. The key to a good infrastructure system is the understanding of the freight flows. So you need to know where the stuff's coming from, where it's going to, and why it's going there. So once you have this clarity about the Scottish freight flows, then you can start planning your vision and your system and you know where all the government should direct the support to. There were a few studies in the past. I think, Jason, you were part one of this about various commodities and foodstuffs mapping the Scottish freight flows, but I think we needed wider understanding of what are the commodities being moved. We know Whiskey is one of the main exports, but what about other things in Scotland? Where is the products moving and why they're moving when they're moving? So that's one part of the problem. The second important issue is this interaction between freight and passenger movements. So we're not building infrastructure or we're not improving infrastructure for freight only. Most of the infrastructure is shared between passengers and freight and we need to understand the connections and interactions there to be able to develop a sustainable infrastructure system for Scotland. One last question. There's been some talk about an updated freight policy for Scotland. Is there anything outside of what you've just said that you would suggest should be in that and how could you see that new policy assistance in the sector? I would add that it's the word resilience. There are academic circles and business circles. A lot of discussions these days are about supply chain resilience and doing risk audits and reconfiguring your supply chain, but that also relates very much to infrastructure. I would have thought that a lot of future investment in Scotland's infrastructure will be climate-proofing. In the case of rail, we might be trying to improve the resilience of rail services by having alternative routes. For one reason, a particular line is blocked and at least we have some redundancy in the system to divert freight trains in other directions. In any policy, resilience ought to be up there as one of the key objectives. Thank you very much for that. Do you see the planning system operating effectively to support freight transport in Scotland? By the planning system, I mean everything from individual decisions through to the national planning framework. This is land use transport integration. I've done a lot of work in that area. The planning system is really on catch-up. It's got stuck for far too long. While we're now moving towards national planning frameworks, there's so much legacy development out there, the stuff that's already got planning permission inherited issues that might not be the way we would do it nowadays, that the planning system is not working effectively for us. I've alluded earlier to the fact that there were issues that were said in the national planning framework that were changed within weeks. That's not certainty for 20 years. I often highlight that on the passenger transport side, Copenhagen Metro built as a pension investment. We wouldn't get pension companies in Scotland investing in our transport infrastructure because transport policy isn't stable enough. People want to know that they're going to get the money back. The planning system has to provide that degree of certainty. If somebody is going to say, right, we're going to spend x billion on this land around this freight hub, then they've got to know that we're not just going to change your minds and decide that freight hub is going to be somewhere else. There's plenty money out there. People just want to know that it's safe. It's the most single common theme across economic growth around the world at the minute. Everybody is looking at an uncertain world economy. Any certainty that we can give to people through a planning system to say, yes, this is going to happen, this is where the commitment is, that will attract the money. It's almost like it needs less government funding than what government can do is provide the certainty. I think that's where the planning system is because in the planning system is the way we structure it to give genuine certainty. How do we get from here to there, i.e. a planning system that's now so damaged that, as it were, there's an expectation of, oh, even though it's been given planning permission and it's in the national planning framework, we might still do something different, is a huge issue. It's a massive issue for transport planning because it means that if I wanted to fund a transport scheme, I would probably do better joining the local Chamber of Commerce and getting them to lobby for it as a great investment important for the Scottish economy so that it becomes politically impossible for politicians not to put public money into it. I'm just observing the reality of where we are now and you're saying, can the planning system work for us? What I'm saying is, well, absolutely it can, but it's not going to be like an overnight one that we can take a planning system with hundreds of inherited commitments about what's been given, you know, planning permission for housing. If you change any of that or whatever these developments, your planning authorities will be hit with compensation claims for stuff. This is something that takes 20 years to rebuild a new type of planning system and, yes, the stuff that I see going on now with the planning reform is all heading in the right direction, it's all good stuff, but we've got to look at other ways. How do we complement the planning system with the business wraparound, the new business models, how we partner it effectively, because that's how I see we can do stuff faster than try and say the planning system is how we'll unlock a lot of what we need to do. Just a general feeling I've had over the years is that a lot of planners still think in terms of freight transport being an isolated activity, whereas companies these days think of logistics, you know, where the transport is integrated into the handling processes, the inventory management, the warehousing and so forth. So a general exhortation to planners to try to adopt that logistical perspective that companies take. I think particularly in urban areas because, as we've discussed previously, there are a lot of city logistics innovations and I think some are being obstructed by planning restrictions. We mentioned like-time delivery, for example, you know, so sometimes you're not able to deliver to a shop in a city centre because the planning approval that shop got restricted the number of hours in a day when that delivery was possible. We mentioned urban consolidation centres. There are a whole spectrum of things that you can now do to try to rationalise freight movement in urban areas by deploying these city logistics measures and what we have to make sure is that the planning system can accommodate these measures. I think, for example, you're going to the Netherlands, is that right, to see the binnastat system, which I think is very interesting and it would be worthwhile looking at the planning implications there because they've had to change the use of property in the city centre to make it essentially into a consolidation centre. I think that in a few cities they run into some difficulty in actually converting the land use, so that's something you might want to consider. Of integration of freight decisions and land use planning decisions is a key. It's important when planning new developments, so for example, if you build a new residential area, you need to think how these people are going to receive deliveries. We know online shopping is on the increase, so they'll probably be not on a lot of passenger traffic generated by that, but there will be van deliveries, there will be small trucks delivering to that particular area. Also, certain types of high street will have freight flows associated with them, so looking at freight as a part of other activities as opposed to standalone activities is a key here. On a slightly different subject, I noticed one of the earlier answers. There was a particular set of statistics, I think it was for road transport, which were available for the rest of the UK, but it was not available for Scotland. How good are we in Scotland at assembling those statistics? Are we in a position where we have enough information to be able to assess whether policy interventions work or not? Very good question. Being academics, data is our raw material, so we are very sensitive to that issue. I have just written a report for the OECD on the freight data that you require around the world to develop freight policy. I will happily provide that to the committee. The Scottish transport statistics volume that is published every year, a compendium of data, is excellent. I would complement the statisticians that they compile. A lot of the data that they get from the Department for Transport, for example, the roads goods survey is a UK-wide survey, and they simply extract the Scottish data from that. Although I praise that volume, it does not have data on everything. One big gap is to do with utilisation of vehicle capacity, load factors, empty running of vehicles, information on the fuel efficiency with which trucks in Scotland are used, the portion of alternative fuel that is used by trucks in Scotland. Those are all things that we need to do to factor into our calculation of what the carbon intensity of road freight is in Scotland, and we do not currently have that information. It may be available within the Scottish Government, but it is not published at present. What does Government need to do to facilitate the collection of that information? That data is available at a UK level, so the published figures for the UK as a whole will be quite nice if we could separately present the Scottish figures. It may be necessary—obviously Scotland is only 10 per cent of the freight or 9 per cent of the freight—what we may need to do is increase the sample sizes in Scotland. Otherwise, if the sample size is too small, the sampling errors are very high. There may be a case there for Scotland to increase the sample size for trucks. There may be a case that some of this data may be available if it is just not published, or that data may not be available because of the sample size. An effort to increase sample size would help us to improve the data availability. Data is changing very, very fast. The mechanisms that I would be looking to rely more on are I mentioned CILTs, logmark type things, and enormously detailed data with all the companies that we can persuade. All companies that come into benchmarking schemes that are comparing every detail about load factors, fuel consumption and everything, that data is available and shared in anonomised way so that we have figures. Instead of old-fashioned, let's go out and do a traffic survey on the road and find out where people are coming from and going to. We have GPS tracking and we know that type of stuff. Most companies are happy to share that data in return for cash. The data flows and the cash flows are actually what people mean by the knowledge economy. You have heard some of the stuff that we have talked about and some of the world growth. Companies like Facebook make their money purely from the fact that they are owners of information. The knowledge economy is actually quite a big and important thing. Get government statistics are falling a bit behind in that they still view statistics as if they are something that is provided as a market failure because information was always a market failure rather than an area of market growth, which is where the information is now. I think that what I would be saying about the information is that let's use what is really out there and bring it together around a new marketplace for data and then the statistics will improve. I mentioned earlier that almost all the freight data that we have, not just in Scotland but anywhere in the world, is weight-based. It is a tonne kilometre that drives all our analysis. We lack volumetric data and cubic capacity. For the UK as a whole, we can see what the average lading of a truck would be by weight, but that does not tell us what the density of the load was. A lot of trucks that appear to be only partially loaded might only be carrying 10 tonnes when the vehicle could have been carrying 29 tonnes, but if that is a very low-density product, it could be all the cubic space that is occupied. Exactly. Regularly, it is large, lorry and delivering flowers. I would not imagine that they weigh very much. No, exactly. You could come from Holland as well. All the evidence suggests that freight is getting less dense through time. We are substituting lighter materials such as plastics, metals and wood. We are packaging more, using more handling equipment. Therefore, trucking companies need more cubic capacity these days than they need weight-carrying capacity. It would be nice if we had data sets that allowed us to analyse that. My final question is a bit of a catch hole, and you might have covered some of that before I arrived. Are there any good examples of Government interventions or funding models in other parts of Europe that would be particularly suited to transfer into Scotland? I think that the way that we put together—I suppose that the best—one of the interesting examples is the fact that M8 completion is finally being funded from pension fund, type minor, and effectively as part of investment and growth in the economy. Rather than being seen as—if we can unlock transport investment in all sorts of areas, we will see fantastic things happening in our cities. It is almost like the analogy of that if the Government has got £2 billion to spend, you can have everybody else out there competing for the share of that £2 billion, or you can have everyone working with you to turn that into £20 billion. What I am saying is that it is about the way—for every pound that Government spending needs to buy another £10 billion. If we look at what we are going to need to do in transport, what we are going to need to invest in to create the modern, intelligent, connected, future world that loads of countries are on that trajectory, we need to—I think that the word that the sort of CILT response put into this inquiry was, we need a dramatic—now you do not want to use the word dramatic—a dramatic change in the level of investment that you use in response, but that is how it looks like to people doing an overview of how do we get from here to 2035, which is the word that was used in the CILT future of logistics paper on what needs to happen, and it is that dramatic shift in investment. It is not going to come from public funding, it is about how we use the limited funding that public funding we have to unlock all the good things that could happen. Yes, the M8s may be just starting to see the beginnings of, yes, so we can unlock all this money, like other countries in the world have been doing, mentioned various projects around the world and how they package stuff up that is in ways that is acceptable to the populations, it has got to deal with the social issues, not just profits, it has got to be packaged up in a way that actually addresses all of the needs of the people, and I think too many of the early PFI schemes were just badly run, badly organised, the whole model is badly damaged in the Scottish taxpayers' perspective, that needs to change, there is not any alternative to changing, but effectively how we bundle up, we cannot have private individuals going out and spending all their money on private cars or private lorries or private buses or whatever separate from the public investment system, all that is going to happen is that the public system is going to lose if it does that, because it is so much less money. What we need to do is ensure that limited public money levers in a social and more socially inclusive partnership direction the things that need to happen in Scotland, and then people are buying the good logistics inadvertently. Maybe the Scottish Government could prioritise logistics. To put it into a global perspective, every two years a world bank rates countries in the world in terms of their logistics performance. Germany is number one at the moment, the UK is number four, they do not break it down by countries within countries like Scotland, but Germany, the Netherlands, South Africa and France are now prioritising logistics as a sector and promoting it. That goes beyond just freight transport, it sees freight as part of this bigger logistics system because logistics has an image problem. One thing that we did not discuss earlier, you asked me what were the big issues back in 2006, one of the big issues then was a driver shortage. I have noticed in some of the evidence to this inquiry that there is a feeling that there is still a driver shortage. Why is that? It is partly because freight and logistics are a bad image and it is not seen to be a good source of employment. One thing that we could not be considered is to look at ways in which we could promote logistics as an industry sector because it is so highly diffused. There are so many companies engaging logistics but we do not think that it is an industry in its own right. Several countries produce a state of logistics report every year. The US, for example, is looking at the state of logistics and what can be done to support it. That is one thing. Just a couple of other minor things. Again, if we look at Germany, one thing that is fundamental to Germany's freight policy is its tow collect system. It has a road user charging system for trucks, so they reduce vehicle excise duty and fuel duty and they tax the trucks by the kilometre. They reckon that that has the effect of reducing the empty running of trucks, improving load factors and also helping to engineer a motor shift to rail. Again, at some stage, we could return to the possibility that we would think of ways of taxing trucks by the kilometre. Is there an issue that the high proportion of heavy goods vehicles in Germany will be non-German? It does, yes. I think that about a third of the truck kilometres on the German Autobahn Network are non-German, whereas I think the equivalent figure for Scotland is about three or four per cent. That was a big motivation that they had for doing it, but I think that the principle could be equally applied here in Scotland or in the rest of the UK as well. The engagement of the government and local authorities with academia and also with private companies to take the benefit of funding available, for example, as a part of the Trans-European Transport Network or Horizon 2020 or also UK funding, there are various sources of funding available to fund research into how to improve the system and how to make it more efficient. We need a more joined-up approach to the problem. Thank you. Do members have any other further questions? I think that we have had a mammoth session this morning, but I think that it has been hugely helpful to the committee in informing its work on our inquiry. Can I thank the witnesses for their evidence today? I particularly thank Professor McKinnon for having me, the longest commute, although I rather suspect that you did not start out in your journey this morning. Oh, you do? I did not realise that. We are still very grateful to you and to all the witnesses for their time and their expertise this morning. I now suspend the meeting briefly to allow the witnesses to lead the room. Thank you. We now resume the session of the Infrastructure and Capital Investment Committee. The second item for today is the consideration of two negative instruments, the provision of water and sewerage services, reasonable cost Scotland regulations 2015, SSI 2015-79 and the Scottish Road Works register prescribed fees regulations 2015, SSI 2015-89. Paper 3 summarises the purpose and prior consideration of these instruments. The committee will now consider any issues that it wishes to raise in reporting to the Parliament on these instruments. Members should note that no motions to annul have been received in relation to these instruments. Can I invite comments from members? There are no comments from members in that case. Is the committee agreed that it does not wish to make any recommendation in relation to these instruments? We agreed. Thank you. Today's final item on business is to consider a response from the Scottish Housing Regulator following the committee's scrutiny of its annual report on accounts 2013-14. Members will recall that the committee wrote to the Scottish Housing Regulator and a response has been received from the regulator, providing a detailed response to the issues raised by the committee. It highlights where action is on going to address concerns that have been raised and also areas where further work is required. The letter highlights areas where further consultation and dialogue is required with stakeholders, including the Scottish Federation of Housing Associations and the Glasgow and West of Scotland forum. For example, it outlines steps to address concerns about proportionality. The Scottish Housing Regulator will publish more information on how it conducts its assessments and the outcomes of those assessments. It will also be looking at ways in which it can further improve transparency around its operations and the SHR is supporting the introduction of an appeals process and plans to consult on how an appropriate independent and proportionate system can be developed and implemented. The SHR is working with stakeholders on a publication about how it applies the policies set out in its regulatory framework around cases where serious concerns are raised. In April, the SHR will issue updated information leaflets about whistleblowing and what will happen if concerns are reported. The content of those leaflets is being taken forward and discussed with the SFHA and the GWSF. It will work to improve the tone of its own publications and include more positive examples in future editions of its publications, Governance Matters and Performance Matters. It proposes to change and clarify the requirements for dealing with notifiable events such as when a senior officer leaves a registered social landlord. It is exploring the potential to develop a framework agreement that both the SHR and registered social landlords can use to appoint consultants who may be required to support RSLs' experiencing challenges. Finally, on the issue of the appointment of contractors, particularly in rural and island areas, it has explained that landlords can use the comply or explain principle to deal with challenging situations. The SHR will also continue to work with the SFHA on its proposed model payments and benefits policy. That outline and summary is the content of the response that we have received from the Scottish housing regulator. Can I invite comments from members on that response and on any further action that the committee should take? There are a number of areas that I feel still unsatisfied with the response, but the particular concern that I would draw to the committee's attention is the fact that you touched on there, and it is about the purchase by governing body members and staff of goods or services from the RSL supplier or contractors. It seems to me that the regulator has responded in almost identical terms to the previous response on that issue. I am not satisfied that they really understand how burdensome and difficult this is for housing associations in rural areas. I would point out that the problem affects not just members and staff but also their family. Within rural areas and the limited local economies, it can be almost impossible to operate under the current conditions equally on a case-by-case basis to create explanations. Sometimes unfairly trivial purchases would be hugely burdensome. I am also aware of the fact, because certain housing associations have been in touch with me, that the issue has been on-going for some years with no apparent resolution. That is something that I hope that the regulator could explain to us in more concrete terms and, along with a timescale, how they propose to deal with it. Clearly, the committee can write to the Scottish Housing Regulator and raise any specific points, such as the one that you have just mentioned, on which members feel that further action is required. Can I invite further comments from members? Can I suggest that we can interchange letters where we are just replying terms? Is there a possibility of them coming back to the committee for further discussion of some of the issues? I think that that is a good suggestion. It is certainly something that we could take forward to remember any other members' views on that. In that case, the committee agreed to note the response that we have received and agreed to invite the Scottish Housing Regulator and perhaps social housing sector stakeholders to appear before the committee to provide an update on the progress that has been made and to do that before the summer recess in June 2015. Do we wish to agree that we will write, notwithstanding Mike's comments, to the Scottish Housing Regulator asking them to provide us with an update in advance of that evidence session and perhaps to prioritise progress on areas that have been highlighted in the correspondence? I am thinking perhaps of the appeals process in particular. We are agreed to that. In that case, we will now move on to a related issue, which is that members will be aware that submissions have been received from Dumfries and Galloway housing partnership and Dumfries and district trades union council. The submission from the trades union council covers a petition calling for a judicial review into what it considers to be a failure of the Scottish Housing Regulator to apply due diligence into the award of a £77 million contract to R&D construction, which subsequently became insolvent. Members will wish to note that the petition did not come via the Parliament's public petitions process. The submission from Dumfries and Galloway housing partnership covers a communication to its tenants, which is intended to provide clarification of its position following recent media scrutiny relating to the concerns raised by the trades union council. It indicates that payment was only made for works carried out and completed by R&D construction. As part of managing risk, DGHP has stated that it also retained monies that acted as its insurance against any future losses that it may have incurred. The money retained covered the cost of having to retender the contract after R&D ceased trading. It has suggested that there was no loss of public money funds for the regeneration work that came from the Scottish Government, Dumfries and Galloway council and DGHP's own private finance. All of the funding that they say is accounted for and has been audited each year by DGHP's external auditors as part of the preparation of its annual accounts. When the Scottish Government, Dumfries and Galloway council and DGHP undertook the regeneration programme back in 2009, they pointed out that a detailed tender process was undertaken in accordance with procurement law. They further stated that, and I quote, R&D's tender was scored by all parties to be the best end quotes that it carried out detailed financial testing to ensure that all tendering contractors were financially stable enough to carry out a contract of such a size, and that R&D passed the financial tests at that time. It further states that, and I quote, those financial tests were recently reviewed through an investigation carried out by a respected firm of auditors, and it was found that DGHP acted correctly by appointing R&D end quotes. On the specific point regarding its involvement in the management of contractual matters by RSLs, the Scottish Housing Regulator has responded indicating that RSLs are independent businesses and that it is for landlords to manage their affairs, including the responsibility to ensure that they are financially healthy and delivering good outcomes for their tenants. The SHR also makes clear that it is the responsibility of each landlord to ensure that it meets all relevant legislation, regulatory standards and good practice in relation to all its business decisions, including procurement decisions on the award of contracts to build new houses or to maintain existing homes. Importantly, the point is made that the regulator has no role in the individual business decisions or due diligence undertaken by social landlords, nor is it the role of this committee to be directly involved in determining the contractual arrangements of individual RSLs. Members will be mindful of the strength of feeling expressed by the Dumfries and District Trades Union Council and the supporters of its petition. However, in deciding what action it would be appropriate for this committee to take, we need to give due consideration to the context of our specific role and remit as a committee. Here, it is worth referring to the legislative position. Beyond the fact that section 19 of the House in Scotland Act 2010 requires the regulator to lay its annual report before Parliament, the Parliament has not given any specific powers in relation to its activities. In particular, it has given no power to adjudicate on complaints made about the regulator or to act as an appeal forum. Given all that, can I invite members to express their views on this issue and how we should respond to the Dumfries and District Trades Union Council petition? Thank you, convener. At practice for the record, I could draw members' attention to the fact that in the mid-80s I was a member of the Dumfries and Trades Council, but I have not been attached to them for a number of years, nor have I spoken specifically to Mr Dennis about the issue. Members will also know that my interest in petitions is the X convener. I do feel that the Parliament generally gets a lot of international recognition of the work that it does in petitions. I understand that there may be some issues around admissibility, but my advice to the committee is that we do try and get an admissible petition from the Trades Council so that the petitions committee can consider it. I do understand that there may well end up back with us, but, nevertheless, I think that we have to give justice to the fact that the petitions committee is set up to look at these particular issues. My recommendation is that we ask officials from our committee and the petitions committee to work with Mr Dennis to get an admissible petition so that it can be formally considered by the committee that is set up to look at this, which is the petitions committee. Are there any other views that members wish to? In that case, we are agreed that officials of the committee will contact Dumfries and District Trade Union Council and suggest that they pursue the route of presenting a petition formally to the petitions committee. Can I also seek your agreement that we will write to Dumfries and District Trade Union Council formally? That concludes today's committee business. There is no meeting on 25 March. The next committee meeting will be on 1 April or Monday 23 March. I will, along with Mike McKenzie, be visiting Skaraborg Logistics Centre in Falshirping in Sweden and the Port of Gothenburg. Dave Stewart and James Donnell will visit the Benin Stad Service in Nimogen in the Netherlands and a nearby port. That concludes our session this morning. Thank you.