UK Government Report
Description of sector
This report is focused upon road haulage and road passenger transport (buses and coaches), and also considers broader logistics impacts.
Under the broad heading of road haulage there are many segments, each with their own operating model. Haulage companies range from large logistics companies through to operators with a single vehicle. This has made the sector highly competitive, and profit margins thin, with operators looking to pick up business at marginal cost. Between the two there are middle-sized players which have oftengrown from being very small operations.
The current EU regulatory regime
Main sector-specific rules governing the provision of this activity in the EU
EU legislation on market access is based on similar principles to those applied for rail and aviation. If an operator holds a “Community licence” it may carry out international haulage or passenger transport operations within the EU and, subject to some constraints, cabotage operations. The conditions for gaining and holding a “Community licence” are set out in legislation and include provisions on fitness and financial adequacy.
The main EU rules are explained below, grouped into relevant policy areas. In summary, there are common rules governing:
– the establishment of haulage operators and their access to the single market;
– access to the international market for coach and bus services;
– driver licensing and additional training for commercial vehicle drivers;
– safety and social rules for commercial vehicles, including maximum driving hours (and recording devices, known as tachographs);
– charging heavy vehicles for road use and road infrastructure;
– roadworthiness rules (including vehicle testing and checks); and
– permissible vehicle dimensions and weights.
There are a number of compliance and enforcement issues related to some of the rules, which are discussed below.
These rules have been described by the Commission as constituting the establishment of a single road transport area, which has a liberalised transport services market at its heart, and also includes objectives relating to road safety and environmental protection.54 The integration of road freight into the EU’s single market has led to increasing levels of international road freight and a more competitive market. EU legislation has also helped set a level playing field across the EU with minimum safety standards. The driver and vehicle licensing, insurance, vehicle testing and registration processes affect both commercial road transport and private motoring.
The road freight being regulated is not just standard loads but also covers some more niche functions, such as the movement of horses around Europe and also removal firms. These all constitute freight and are all subject to the same EU and domestic legislation. The rules governing freight are generally applicable to road hauliers using vehicles of over 3.5 tonnes (i.e. larger than a van).
Access to the profession of road transport operator Regulation EC 1071/2009
Regulation EC 1071/2009 sets out common rules concerning the conditions to be complied with to pursue the occupation of road transport operator. It governs both freight and passenger transport. According to the regulation, operators must fulfil four criteria to access the profession:
– Good repute, which shall ensure adequate entrepreneurial ethical conduct. Manipulating a tachograph, for example, would be considered a serious infringement leading to the loss of a good reputation;
– Financial standing, which requires operators to have capital assets available every annual accounting year of at least € 9000 for the first vehicle and €5000 for each additional vehicle;
– Professional competence, which requires practical knowledge and the aptitude of professionals in the sector by means of an obligatory exam with common arrangements, marking and certificates;
– To have an effective and stable establishment in a Member State.
In addition, a transport manager who is responsible for respecting the road transport legislation in force must be designated by each road transport operator.
National authorities have to carry out regular checks to ensure that operators continue to satisfy these four criteria. In the UK these checks are undertaken by the Driver and Vehicle Standards Agency (DVSA) and the enforcement procedures are undertaken by the Traffic Commissioners. There is also a system of cross-border intelligence-sharing about operators committing the “most serious infringements” of their obligations, between Traffic Commissioners and their counterparts in the rest of the EU.
Regulation EC 1072/2009
Regulation EC 1072/2009 sets out common rules for access to the international road haulage market.
This Regulation provides the basis on which international road haulage between EU member states is permitted. This regulation currently allows the UK to issue “community licences” to road haulage companies based in the UK (as long as the companies meet the minimum requirements in Regulation EC 1071/2009) and those companies are then permitted to undertake international road haulage operations between the UK and all other EU or EEA member states without the need for any additional permits.
This Regulation (and its predecessors) replaced the need to have a series of bilateral arrangements.
This Regulation also sets out the requirements and provisions for freight journeys within another country by a foreign operator (“cabotage”). The Regulation entitles community licence holders to carry out cabotage operations subject to certain limitations. The overall duration of cabotage is limited to seven days and caps the maximum number of allowed cabotage operations to three. Member States may choose to offer more generous arrangements. Before cabotage can start the haulier must have entered the host Member State with a laden vehicle and the goods carried in the course of the incoming cross-border transport must have been delivered.
The regime is supported by other market access provisions, such as Directive 2006/1/EC, which governs the cross-border leasing of vehicles without drivers for the carriage of goods by road.
Access to the international market for coach and bus services Regulation (EC) No. 1073/2009
Bus and coach travel between EU Member States is governed by Regulation (EC) No. 1073/2009 on common rules for access to the international market for coach and bus services which came into effect on 4th December 2011. The Regulation sets three categories of service; regular, special regular and occasional, with different authorisation requirements. In all cases, a carrier must be authorised to provide such services in accordance with market access conditions laid down by the national legislation of the Member State; satisfy EU conditions on admission to the occupation of road passenger transport operator; and meet a range of legal requirements for driver and vehicle standards (Article 3).
Regular (timetabled) services require an authorisation by all Member States in whose territories passengers are picked up or set down. The Regulation also authorises cabotage operations for certain services.
Driver licensing and training
There is a harmonised EU-level regime on driver licensing, including for the HGV vehicle categories. This means that a driver qualified to drive a lorry in one Member State can do so in any other on the same licence, without the need for an international driving permit, ensuring a level playing field for drivers from all Member States.
Directive 2003/59/EC sets out the initial qualification and periodic training of drivers of certain road vehicles for the carriage of goods or passengers (aside from driver licensing). The rules require these drivers to hold a driver certificate of professional competence (DCPC) obtained by completing an initial detailed test, with periodic retraining every five years.
Social and safety rules for drivers
Both the EU drivers’ hours rules (Regulation EC 561/2006) and the EU working time rules (Directive 2002/15/EC) for mobile road transport workers aim to promote road safety, by limiting the time drivers spend driving a large commercial vehicleand on other duties, to help reduce the risk of drivers being involved in fatigue-related accidents. A further objective is to ensure fair competition in the industry and to improve the working conditions of drivers at the EU level. These rules are supported by an enforcement regime centred on the use of tachographs to record drivers’ hours.
Regulation EC 561/2006
Regulation EC 561/2006 (EU drivers’ hours rules) applies to most goods vehicles weighing over 3.5 tonnes and passenger vehicles with 10 or more seats (unless covered by a range of specific EU-wide exemptions and national derogations). This Regulation sets maximum limits on driving time and minimum requirements for breaks and rest periods, to be enforced by national authorities.
Directive 2002/15/EC (Sector specific working time rules) applies to drivers in scope of Regulation EC 561/2006. These rules limit the total amount of work that can be carried out in one week, including driving and ay other work.
Regulation EU 165/2014
Regulation EU 165/2014 (tachographs) sets out obligations and requirements in relation to the construction, installation, use, testing and control of tachographs in order to verify compliance with Regulation EC 561/2006.
Directive 2006/22/EC (enforcement requirements) determines minimum requirements for enforcement of Regulation EC 561/2006 and Regulation EU 165/2014. It requires Member States to provide statistics biennially to the European Commission on the number of working days checked at the roadside and at operator premises, including the number and type of offences detected.
Directive 92/6/EEC sets out rules for “the installation and use of speed limitation devices for certain categories of motor vehicles in the Community”, which is transposed via The Road Vehicles (Construction and Use) (Amendment) (No. 1) Regulations 1993 (SI 1993/1946). 92/6/EEC was later amended by Directive 2002/85/EC, transposed into UK law by The Road Vehicles (Construction and Use) (Amendment) (No.2) Regulations 2004 (SI 2004/2102).
HGV charging and taxes
73. Directive 1999/62/EC (“Eurovignette” Directive) sets rules for road user charges and annual taxes on HGVs. The Directive seeks to ensure a level playing field by setting the bounds within which Member States may set their vehicle taxes and user charges, and encourages charges to reflect the “user pays” and “polluter pays” principles. Most EU states have some form of time or distance based charge.
Directive 2004/52/EC and Decision 2009/750/EC
Directive 2004/52/EC (“European Electronic Toll” Directive) and related Decision 2009/750/EC aim to achieve the interoperability of all the electronic road toll systems in the EU in order to avoid the proliferation of incompatible systems. The Directive therefore stipulates that a European Electronic Toll Service (“EETS”) shall be set up, to cover all road networks and tolled infrastructures in the EU, and defines the allowed technological solutions for carrying out electronic toll transactions. The Directive did not set up EETS as such, but rather provided the framework for its establishment.
Roadworthiness rules for commercial vehicles
There is a common EU regime covering the roadworthiness of commercial and private vehicles. It is designed with a view to ensuring that a minimum standard of road safety is upheld across the EU, including (but not limited to) vehicles that cross internal borders.
Directive 2014/45/EU57 (Periodic technical inspections) defines the approach to be taken by member states with respect to regular vehicle checks (roadworthiness testing). It covers the arrangements for the testing regime, for example ensuring the independence of the testers. It also sets out the detailed minimum technical standards of the test. Tests of goods vehicles in GB are done by DVSA examiners and EU rules cover who can test vehicles.
Directive 2014/47/EU58 (roadside inspections) defines the minimum roadside inspection regime that each Member State must implement for commercial vehicles. These inspections are designed to complement the periodic technical inspections. The Directive sets out the governance arrangements for the regime, the risk rating approach to be taken and a minimum number of vehicles to be inspected annually (5% of the total). In GB, compliance with this Directive is ensured by the work of the enforcement agencies (DVSA and the Police in GB, Driver and Vehicle Agency (DVA) and the Police Service in Northern Ireland (PSNI) in NI).
There are also EU rules relating to how Member States are to register vehicles as authorised for road use, and to suspend that authorisation in case of serious vehicle defects (Directive 1999/37/EC)
In-use weights and dimensions rules for certain motor vehicles circulating across the EU (including certain lorries and buses) Directive 1996/53/EC
Directive 1996/53/EC (General Circulation Directive) sets out harmonised maximum weights and dimensions for motor vehicles, trailers and articulated vehicles across Europe to allow free movement of vehicles between Member States. The harmonised weight and dimension limits apply to international traffic but Member States are able to set their own weight limits for vehicles in national traffic. The Directive helps to ensure that a level playing field is maintained in the single market and that operators in one Member State do not have an unfair advantage over others. It also helps safeguard against vehicles being overloaded and causing excessive road wear.
Devolved areas of responsibility
Most of the EU rules set out above are reserved matters in relation to Scotland and Wales and are devolved in Northern Ireland and Gibraltar. While in Northern Ireland and Gibraltar the rules are generally transposed in the same manner as in Great Britain, they have the power to determine how they transpose and implement these rules, as well as the power to set any additional rules in this area. Different regimes apply in the Crown Dependencies and other Overseas Territories, which are not generally bound by EU rules.
This Report has particular relevance for Northern Ireland and Ireland. In August 2017, the UK government published the Northern Ireland and Ireland position paper outlining the UK’s position on addressing the unique circumstances of NorthernIreland and Ireland in light of the UK’s EU withdrawal. The UK and EU have mapped out areas of cooperation under the Belfast (‘Good Friday’) Agreement that function on a cross-border North-South basis. This detailed work demonstrates a wide range of cooperation across different aspects of the economy, public services, and the environment.