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A lorry carrying a shipping container leaves the port of Liverpool.
A lorry carrying a shipping container leaves the port of Liverpool. Photograph: Dave Rushen/SOPA Images/Rex/Shutterstock
A lorry carrying a shipping container leaves the port of Liverpool. Photograph: Dave Rushen/SOPA Images/Rex/Shutterstock

What is ‘cabotage’ and why have UK road freight rules changed?

This article is more than 2 years old

Grant Shapps has announced policy aimed at foreign lorry drivers to help ease supply chain problems

Ministers have announced plans to allow foreign lorry drivers to make an unlimited number of pick-ups and drop-offs within a fixed period in the UK in a move aimed at tackling supply chain problems. Announcing the rule change, the transport secretary, Grant Shapps, said: “We don’t want ‘cabotage’ to sabotage our industry.”

What exactly is cabotage?

The term refers to the practice of domestic road movements of freight being undertaken by foreign-registered trucks.

Derived from the French verb caboter, meaning to sail along the coast, cabotage has taken place for centuries. It originally took place in the shipping industry, when foreign merchants would collect loads and drop them off within other countries.

Nowadays, “cabotage” is mostly used in conjunction with transport of goods by road. For example, if a Polish HGV brought goods to the UK and unloaded them, before subsequently collecting a new load in Newcastle that was transported to London, the second journey would be a cabotage leg.

Cabotage only accounts for a tiny fraction of all the movements of goods in Europe, between 1% and 2% of all UK national road freight volumes, according to figures from industry analyst Transport Intelligence.

However, as the UK imports more than it exports, it has been a useful way to prevent lorries merely unloading and immediately travelling empty back to their base on the continent.

More significantly, the majority of cabotage journeys across the region are carried out in western European countries by eastern European trucks and drivers, operating at lower cost in a higher cost environment.

This means hauliers on cabotage trips often offer lower prices than domestic carriers, making them very attractive to business. This is considered to have brought down the market price of road transport, forcing domestic carriers to offer broadly the same prices for journeys as their overseas rivals.

How did we get to the current situation?

The lower prices offered by foreign hauliers making cabotage journeys meant limits were introduced on the number of legs they could complete in a set period of time. A vehicle must enter a foreign country with goods on board before it can later complete cabotage trips, it cannot enter when empty.

Policymakers saw the limitations as a means of regulating the industry and protecting domestic haulage companies. Under EU rules during the UK’s membership of the bloc, foreign-registered vehicles were permitted to make three cabotage journeys, provided they were completed within seven days, before the lorry had to leave the country.

However, after Brexit the UK limited the number of cabotage legs that vehicles could make within the country to two within seven days.

In contrast, UK-registered trucks are only allowed to make one cabotage journey on the continent, although they are permitted to make a couple of “cross-trade” trips – from one EU country to another.

What is changing?

In an attempt to ease the HGV driver shortage, the government is now proposing that EU hauliers would be allowed to pick up and drop off goods an unlimited number of times during a two-week period, before the trucker is required to leave the country.

The government launched a week-long consultation on these proposals on Thursday. If approved, they would come into force before the end of the year and would remain in place for six months.

Ministers said the temporary measures would help to secure supply chains and ease some product shortages, especially important during the crucial pre-Christmas trading season. They said the relaxation would apply to all kinds of goods, but would be most beneficial for food supply chains as well as products that enter the country through ports.

Why make these changes now?

The government has been under pressure to ease the ongoing supply chain disruption and labour shortages, which have led to gaps on supermarket shelves and queues at petrol stations.

The UK’s HGV driver shortfall is estimated to stand at 100,000 jobs by the Road Haulage Association (RHA), while the existing workforce is ageing fast. The average age of a UK driver is 50 and the industry body is warning that about a third of the UK’s 380,000 drivers may retire within the next five years.

Last month, ministers agreed to grant 5,000 temporary visas to non-UK lorry drivers – although senior minister said on Wednesday that only 20 had been issued so far. After the closure of testing sites during the pandemic, there is a backlog of drivers waiting to take their tests.

Some of the country’s largest retailers are also looking at their own solutions to tackling the HGV driver shortage. The Co-op has announced it is creating 135 large goods vehicle driver apprenticeships, beginning in the new year, and will recruit a further 200 people based at haulage companies.

It comes after John Lewis opened a driver academy, aiming to get 90 more people behind the wheel of a lorry every year.

Why are industry and the unions unhappy?

Industry experts recognise the acute driver shortage, and have been calling for some time for the government to act. However unions and trade bodies do not believe that the temporary relaxation of cabotage rules is the best way to answer short and longer-term challenges, and the RHA argues it could damage the UK industry.

They worry that the decision to allow foreign-registered trucks to carry out an unlimited number of cabotage trips within the UK over a fortnight will undercut domestic hauliers, just at a time when UK-based drivers’ wages are rising.

Trade associations accuse overseas firms of having lower safety regulations, including the treatment and pay of drivers, and say this could lead to worker exploitation. They also say the move undermines the work being done to improve pay and conditions for truckers.

The trade body Logistics UK said the measures must be time-limited, to help with the driver shortages while more British drivers are recruited, trained and tested.

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