Issue 7 2015 - Freight Business Journal


///IRELAND Tax is heavy burden for truckers


Vehicle and Driver Statistics published by Ireland’s Department of Transport show that the total number of goods vehicles peaked at just over 351,000 in 2008, and had declined to 309,000 by 2012. The trend has reversed since then, with 317,000 goods vehicles on the road last year, but the vast majority of these are vans, with heavy vehicles accounting for just 3% of Ireland’s commercial fleet. The Freight Transport


Association Ireland (FTAI) claims the country is losing out to EU competitors with lower overheads, with many operators registering their vehicles in Newry, across the border in Northern Ireland, or Fishguard, a key entry point to the UK. In a submission ahead of the 14 October Budget, FTAI urged the government to scrap commercial vehicle tax in favour of a road charging system payable by all. “We pay the highest commercial


vehicle tax of all OECD countries,” says Neil McDonnell, FTAI general manager. “Even at the current exchange rate, flagging out is advantageous. Technically it limits you under cabotage rules, but this is not strictly enforced. We’re saying to the Revenue: ‘Other jurisdictions are costing you money’.” Companies that pay their tax


in Ireland are charged on the basis of a trailer’s unladen weight,


leading some unscrupulous operators to keep skeleton trailers specifically for taxation purposes. (If a tractor and trailer needs to be officially weighed, it turns up at the weighing station with the relatively light


skeleton trailer.


Then when it returns to the depot this


is swapped for a heavier


standard one.) However, the vast majority


of hauliers that tax their trailers legitimately can inadvertently flout the law where a tractor has to pick up a heavier than usual trailer in the course of normal commercial operation, McDonnell points out. “If you’ve paid €2,500 for


10-tonne vehicle and the police say your tractor and trailer weighs 12 tonnes, they can say you should have paid €3,200. Some responsible companies tax on the weight of their heaviest trailer, but many claim they would be unfairly penalised by doing that under the current system.” When FBJ met McDonnell in


early September, he told us of a legal appeal on this technical point by a Wexford-based haulier. Depending on the appeal judges’ decision, around 6,000 cases could be thrown out of court. McDonnell expected a


verdict ahead of the Budget, with potentially far-reaching implications for the road transport sector - but at the time of writing it remained to be seen whether,


and how soon, Ireland’s CV tax regime will change. “If the finance minister doesn’t do it, the court of appeal will,” he said. Most of Europe favours a


distance-based taxation system, but Irish hauliers use a massive network of major N-roads to reach areas not covered by motorways. The cost of collecting fees for use of these would be “far higher than you’d get back,” McDonnell argues. There is no easy solution, he


admits. “We have suggested a UK- style time-based charge, but the complication in Ireland is that it would have to run in parallel with PPP (public-private partnership) tolling, as most of our motorways were built under public-private partnerships.” The other main issue


concerning FTAI in the run-up to the Budget was an expected 50-cent increase in the minimum wage to €9.15 per hour. “Companies will be constrained


in their ability to pass this on to the customer and the supply chain can’t absorb the increase,” McDonnell says. “It’s not that we employ many people at €8.65, except perhaps some warehouse staff, but those who are on a higher level will expect an increase in proportion to the base scale. “I’m not worried that legions


of people will lose their jobs, but firms will have to find efficiencies so we won’t see much change in the 9.5% unemployment and 20%


youth unemployment rate.” The minimum wage has been


frozen since 2007, but McDonnell points out that the consumer prices index shows a fall in prices of food and furnishings over that period, offsetting increases in transport, health costs and alcohol. “On inflation grounds you can only justify an increase to €8.94,” he says. FTAI entered a submission


to the commission citing the negative impact of a rise on the country’s economy, especially in the warehousing, general freight transport, rural passenger transport, retail and hospitality sectors. “It has been reported that


the commission is likely to recommend a 50c rise, which we’re completely against. Ireland has the third highest wage costs in the EU, and the fourth highest minimum wage.. “We need to tackle unemployment – raising


the


minimum wage will prevent employers taking on more staff and will have a negative effect on public sector pay claims at a time when the Government is already borrowing to support current spending.” FTA Ireland’s submission to


the commission in April said the priority for Government must be to reduce unemployment, which currently stands at more than 9%, rather than to raise wages.


Cherbourg windfall for Stena Line


Stena Line added capacity on its Belfast-Liverpool route from September, replacing the Stena Hibernia with the Stena Precision on its shoulder service. The vessel shares duties with


the identical Stena Performer, both offering around 600 lane metres or 30 extra trailer spaces more than the old vessel, the Hibernia.


Departing Belfast at


15:30 and Liverpool (Birkenhead), they form part of a schedule comprising 15 sailings in each direction per week. Richard Horswill, head of


freight for the UK and Ireland, says a week of extreme winds in the northern Irish Sea at the start of this year forced Stena Line to divert Belfast-Heysham services on to the Liverpool route. In normal conditions Heysham is served 12 times per week, but the Merseyside option seems to be


Horswill: Calais problems brought change of approach.


more in favour with the freight community, driving the vessel switch. “The Northern Irish economy


appears to be lagging behind the rest of the UK, though the picture is complex with different sectors behaving


in different


ways,” Horswill says. “We have seen signs of a pick-up over the summer and particularly since


the start of September.” Stena’s Belfast-Cairnryan


service has “performed to expectations,”


he adds, “but


Northern Ireland is not as strong as the Republic for whatever reason.” Stena is thought to have gained


substantial volume from P&O since introducing its Superfast vessels on the North Channel in


2011. P&O operates from Larne to both Cairnryan and Troon, but there is speculation within the industry that the Troon service could end later this year. On the southern corridor,


meanwhile, major port disruption at Calais this summer, owing to the migrant crisis and strike action, meant ro-ro users had to find urgent alternatives. Some have tried out the Rosslare- Cherbourg route, the former Celtic Link service acquired by Stena in April 2014, in preference to the UK land bridge despite the 18-hour sailing time. “Route planning depends very


much on driver’s hours and rest times, but we have noticed an increase in accompanied trailers to Cherbourg,” Horswill says. “It is clear that many customers are looking to put permanent contingency plans in place.”


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