Speeches - Hermann Grewer

Ladies and Gentlemen,

As today's last speaker I have been asked to address the question of whether "sustainable development" and "sustainable profitability" are compatible.

The International Road Transport Union (IRU) is the umbrella organization for the road-haulage industry and is, as you heard earlier, working intensively on the idea of "sustainable development" in road haulage on the basis of Agenda 21, which was signed by the UN member states at the Rio Earth Summit. I can assure you that IRU member organizations did not sign the organization's Charter for Sustainable Development in 1996 merely in order to return to business as usual. On the contrary, the national member organizations were then provided with a compact report that explained the basics of sustainable development and how these had already been successfully used by individual countries. It has since been the IRU's goal to suggest a series of "best practices" to road transport firms that will enable the environment, road safety and the firms themselves to benefit from the application of sustainable development concepts.

The efforts of the IRU and individual national members to promote these practices - and I will be giving you a detailed account of what has been done by the Bundesverband Güterkraftverkehr, Logistik und Entsorgung e.V. - has met with a degree of skepticism. The truck is, after all, "Environmental Sinner No. 1". Time and again we are told that the goods transported by truck should, for ecological reasons, instead be conveyed by rail, which is supposedly a more environmentally friendly mode of transport. Whether the subject is CO₂ or NO_X emissions, or problems with noise or the ozone layer, criticism focuses on the truck every time. This is another reason (though not the most important one) why the road transport industry should pay closer attention to environmental and safety problems and make it clearer to the public that it takes sustainable development seriously. The truck's performance from an ecological and safety point of view has significantly improved over the past 10 years, though this has not been recognized - let alone applauded - in political circles and society as a whole.

Not that the road transport industry would have wished to shirk its wide-ranging responsibilities in this area. In Germany, today, over 85% of all goods go by truck. Every day, 12 times more freight is transported by truck than by train, 15 times more on the roads than on the inland waterways. And despite the massive subsidies received by the railway - at great expense to the taxpayer - in an attempt to effect a shift from road to rail, the road transport industry's share of the freight market continues to grow year after year. This is happening not because we are taking business away from the others but because producers and consumers simply cannot do without the flexibility that road transport offers.

This being the case, it would be short-sighted not to take all useful measures to ensure safe and environmentally friendly road transport. Though it has not yet been grasped by the public, the fact remains that trucks are becoming steadily more safe, environmentally friendly and - something which is by no means incompatible - more economical, a development which benefits consumers and helps safeguard jobs in industry and commerce. The idea that trucks are less environmentally friendly than other modes of transport today stands revealed as pure prejudice. An economical utilization of resources demands an intelligent blend of different modes, each providing a high level of quality and technical sophistication. The road-to-rail argument has long been recognized by experts for what it is: propaganda by special-interest groups. Allow me to present some facts.

First, trucks have made great progress in recent years in terms of their effect on the environment. The mandatory introduction of the Euro 1 and Euro 2 engines has since 1990 brought about a 60% decrease in air pollution caused by trucks. It has already been decided to go ahead with the Euro 3 and 4 generations, and as a result emissions will drop by a further 40% compared with the Euro 2 design. And the lowering of noise levels means that 12 of today's vehicles make only as much noise as did a single vehicle ten years ago.

Second, trains in no way present the sort of advantages over trucks in terms of environmental protection that the rail industry would have governments and the public believe. While it is unquestionably true that the lower energy loss on railways provides advantages in fuel economy when heavy freight is being transported in long-range bulk-freight trains, one of the effects of economic change has been a steady reduction in the demand for mass-freight shipments in Europe. High-value goods requiring high levels of transport quality and reliability are the driving force in today's transport market. This has made combined road/rail transport the railways' hope for the future. However, studies have shown that primary energy consumption per tonne-kilometre in combined road/rail transport - and only this combination is conceivable as a starting point for a shift from road to rail - is by no means lower than in the case of road-only transport, no matter what percentage of the capacity-utilization rate is analysed. The reason for this is the markedly lower maximum payload possible for a combined-transport train as opposed to a bulk-freight train. To the energy consumption occasioned by combined-transport trains must be added the consumption required on the road to get the goods to the train in the first place, and then from the train to the customer. Thus, transport is not cheaper simply because it takes place on rails. Moreover, little is known about the thinking in the various railways regarding the application of sustainable development concepts to the rail industry. Apart from expert opinions of dubious quality that have been commissioned by railways regarding the external costs of transport, no activity can be detected. Indicative is the fact that the rail companies assign, for every kilometre driven by trucks, 0.2 Deutschmark as the environmental cost of gas emissions relevant to the climate, while when it comes to the 28% of the electricity used by the German Federal Railway that is produced by nuclear power, the Federal Railway assesses the as yet incalculable internal and external costs of this energy at 0 DM. But let us return to the actual subject of my talk to you.

Allow me to look at the question of whether sustainable development and sustainable profitability really are incompatible goals. As I have already suggested, I believe that there is no such contradiction. It is not because they seek to groom their public image that road-haulage and logistics firms have orientated themselves towards environmentally friendly operations. Let me give you a few examples.

After payroll, the highest expenses arise from fuel purchases. In German firms these average about 20% of total expenses. This has been brought home to us by the recent rise in the cost of diesel due to increases in the price of crude oil and the euro's weakness against the dollar, but also to increases in the Germany's oil tax. Because it cannot be passed on to the customer, a massive rise in fuel expenses can threaten the very existence of trucking firms. What could be more natural for a firm in this situation than to look for ways to cut its fuel costs? Fuel-economy measures over the past 10 years have caused the average diesel consumption of a 40-tonne truck to drop from 42 to 36 litres per 100 km. When you consider the weights involved, this means that we in the road-haulage business have already caught up with the "0.9-litre car", that is, 0.9 litres of fuel conveys one tonne of vehicle weight a distance of 100 km. The resulting decrease in energy consumed and in CO₂ emissions means that this development has at the same time eased the vehicle-specific burden on the environment. There can hardly be a better example of economy and ecology going hand in hand. It seems absurd, therefore, that German politicians should be reversing this environment-friendly achievement of economy within the country's own transport industry by further burdening transport firms with "ecology taxes". Yet that is the political reality.

Ladies and gentlemen,

Sustainable development does not only mean protecting the environment - in our line of business it goes beyond environmental protection and energy saving to encompass road safety as well. I would like to relate a story concerning road safety from my own company. In 1994, it was made obligatory for newly certified trucks weighing more than 12 tonnes to be equipped with a speed-limitation device. I had in any case had the device installed in our vehicles some years before, and made an unexpected discovery: this measure caused the average fuel consumption within our fleet to drop markedly. But that wasn't all! An even more astonishing result was that limiting the top speed of our vehicles did not limit their performance. On the contrary, their performance in annual terms improved because the speed limit ensured less wear and tear on the vehicle and therefore fewer repairs and less time spent off the road, and thus lower expenses arising from maintenance and vehicle unavailability. Another remarkable thing was the effect on the drivers, who arrived at their destinations in a relaxed state, and caused less damage, which led to an overall increase in quality of service and customer satisfaction.

This too serves as an impressive demonstration of the fact that sustainable development and sustainable profitability do not conflict.

In addition to what could be called this "natural" compatibility between the two, it should be mentioned that financial incentives arising from government measures also prompt road transport firms to take a more sparing approach to the consumption of natural resources. In Germany, these measures include the emission-based vehicle tax and, more recently, the Autobahn user's fee, which is also aimed at encouraging environment-friendly practices.

The Bundesverband Güterkraftverkehr, Logistik und Entsorgung became involved early on the issue of sustainable development in the transport industry. In 1996, the Bundesverband established a Label of Quality in Transport and Logistics which, in accordance with the ISO 9002 Quality Management System, sets demanding standards. In addition to the largely customer-oriented criteria for awarding the Label, the Bundesverband has included strict environmental and road-safety requirements, compliance with which must be demonstrated by the recipient.

Among the environment-related standards set are the following:

• The firm must appoint an official responsible for environmental matters.

• A catalogue of environment-protection measures, to be verified by the responsible official, must be drawn up. The results of these measures must be set out in annual environmental reports.

• The firm's fleet must consist mostly of low-emission vehicles.

The following are examples of obligatory safety-related standards:

• minimum insurance coverage for the firm's premises;

• an obligation on the part of vehicle-fleet managers and drivers to avoid violating driver-protection rules;

• a regular maintenance schedule for the firm's vehicles;

• load-security minimums;

• regular vehicle checks.

Another necessary measure is driver training, which in my view is indispensable both in ecological terms - that is, to ensure fuel efficiency - and in terms of enhanced traffic safety.

The motto for the Bundesverband's Label is "Safe, sparing and reliable". I think these three words summarize the road-haulage industry's options for achieving sustainable development within one's own firm.

Ladies and gentlemen,

I mentioned the Bundesverband Label as one possibility for achieving sustainable development in road haulage. This subject is naturally far too complex to be dealt with fully in a short talk, so I would like to point out several other Bundesverband activities that also serve to foster sustainable development in the transport industry.

Together with the German Traffic Safety Council, the Bundesverband Güterkraftverkehr, Logistik und Entsorgung has launched a programme entitled "More safety, more savings" intended to show transport firms how a consistent effort to ensure safety can lower their expenses.

With its publication "Load and secure" the Bundesverband provides all those involved in securing loads - not only the staff of road-haulage firms themselves but also loading personnel - with a manual that shows them how to secure a load on a truck appropriately and in accordance with the law. And such measures not only improve road safety, the resulting reduction in damage to loads also brings financial savings.

Ladies and gentlemen,

I believe it has been made clear that "sustainable development" and "sustainable profitability" are not mutually exclusive goals for transport firms. I have given a number of examples of sustainable development actually amounting to a precondition for higher profits.

It will never be possible to regard the sustainable development concepts applicable to the transport industry as 'finalized'. Rather, it is an ongoing task of the national associations to tirelessly remind their members of environmental, safety and other measures that can lead to progress in those areas and savings for the firms that implement them. Thus the requirements for the Bundesverband's Label of Quality are ceaselessly adjusted, expanded and brought up to date. No programme to foster sustainable development could do otherwise. I am confident that the road-haulage industry, which finds itself the focus of environmental and safety issues, will be able to meet this challenge today and in the future, and do so, as I have shown, not only for the sake of sustainable development but also for its own profitability. For only an industry that practices safety on the road and thrift in resource consumption can hope to be economical.

Thank you.

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