Heathrow Freight Movement Study September 2009
Executive Summary
AECOM 626 WLA Heathrow Freight Movement Study Executive Summary 3 Executive Summary The Heathrow Freight Movement Study Aims and Scope Heathrow Airport is the UK s largest airport in terms of passenger numbers and tonnage handled. In 2007/8 Heathrow handled 68 million passengers and around 1.3 million tonnes of cargo and around 83,300 tonnes of post office mail. The majority (94%) of cargo at Heathrow is carried in the belly-hold of scheduled passenger aircraft with the remainder carried in allcargo aircraft. This study, commissioned in February 2009 by BAA, SEEDA, TfL and WLA aims to quantify the freight and servicing vehicle activity associated with Heathrow Airport in order to inform future decision making on surface access and to ensure that freight and servicing considerations are taken into account in that decision making. The specific aims of the study are to: Quantify the scale and impacts of freight and servicing activity within a study area bounded by the A40/A406/A316/M3/A322/A329/M4/A404/M40 and understand local economic factors Forecast Future movements and impacts to 2020 Inform surface access planning, freight and servicing efficiencies and impact reduction measures The study scope includes: Air cargo (airlines, cargo handling agents, freight forwarders, trucked air freight) Courier/express mail Airport servicing (airport terminals, hotels, offices and other premises) Aircraft servicing (catering, cleaning, maintenance etc.) Data Collection and Growth Scenarios The study has relied on extensive research, data collection and data analysis. This data has been obtained from a wide variety of sources including desk-based research, stakeholder workshops, an on-line survey, detailed discussions with industry operators and roadside goods vehicle counts. In addition, supplementary data was obtained from sources such as the Highways Agency, BAA, ICAO, CAA, DfT and relevant London Boroughs. In addition to detailed Control Post data provided by BAA, AECOM s bespoke goods vehicle surveys (known as Specialised Goods Vehicle Counts or SGVCs) were undertaken at sixteen sites in a cordon screen-line around Heathrow during March/April 2009. These surveys provided detail of freight and servicing activity in the Heathrow area as well as providing important additional detail on operators, vehicle types and vehicle ages. The operator details collected as part of these surveys helped the study team to identify suitable companies to take part in an on-line survey which collected detailed freight and servicing activity information such as tonnage per vehicle, consignment types and origins/destinations of loads.
AECOM 626 WLA Heathrow Freight Movement Study Executive Summary 4 Primary Study Stakeholders DfT BIFA BAA London Borough of Hounslow Slough Borough Council AICES London Borough of Hillingdon West London FQP RHA Slough Borough Council DfT FTA WLA TfL SEEDA Further detailed information from specific operators across the whole spectrum of freight and servicing activity at Heathrow (cargo handling, airport servicing and aircraft servicing) was then collected via twenty-five Freight Interest Surveys which consisted mainly of face-face meetings and site visits with operators to understand their operation in more detail and obtain further quantitative data on the nature of their freight and servicing activities related to Heathrow Airport. The Freight Interest Surveys were backed up by a telephone Warehouse Survey of six of the main Heathrow cargo handling agents to which provided detailed operational information from these cargo operators. The data from these various primary and secondary sources was then normalised and crosschecked (validated) to create a robust base data set as part of the development of AECOM s Heathrow Freight Forecast Model. SGVC and Control Post data was validated using Automatic Traffic Count (ATC) data and other count data supplied by Hillingdon Council, DfT and HA. A further validation process was undertaken using primary data on vehicle movements and vehicle fill collected from local freight interests such as freight forwarders, cargo agents and warehouse operators. Data from DfT s Continuous Survey of Roads Goods Transport (CSRGT) was used to validate the proportion of non-heathrow movements estimated in the study counts. Furthermore, the effects of the economic downturn on aviation activity was also considered. The majority of companies surveyed reported some decrease in trips, tonnages handled and vehicle fill. However, over the next 12 months 70% of companies expect to see either no change or a small to medium increase in activity. This optimism reflects rapid recovery from past aviation downturns, with volumes and growth trends being quickly restored to their former levels. A review of Heathrow air transport data shows that growth seems to be relatively stable and inelastic over the medium to long term in terms of its relationship to economic factors and therefore we see Heathrow returning to previously anticipated levels of throughput growth by about 2010. The resilience of the sector therefore gives us confidence in the forecasted further growth in Air Traffic Movements at Heathrow. Local Economic Factors Some 100 industrial estates exist within a 5 mile radius of the airport and it is estimated that some 40% of occupiers on these sites are directly related to airport activity, rising to 50% on the south side adjacent to the Cargo Centre. The presence of Heathrow Airport can be seen by the dominance of transport and communication activities in the Heathrow area. According to the 2007 data around two thirds (almost 57,500) of all jobs in the area are in this sector, with almost 52,000 of these jobs in the air transport and other supporting air transport activities sub-sectors. The latest BAA employment survey indicates in 2008/9 some 335 airport related companies employed over 68,000 staff. Employment in transport and communication activities is also over-represented in the wider district area, accounting for over a fifth of all jobs in the area compared to around 7% of all jobs in Greater London. The Heathrow area is under-represented in all other sectors compared to the regional averages. However, financial and business services and distribution, hotels and restaurants are significant sectors, both accounting for over 10% of total employment in the area (around 11,400 and 9,900 jobs respectively).
AECOM 626 WLA Heathrow Freight Movement Study Executive Summary 5 Airport growth and demand for logistics warehousing is intrinsically linked The indicator Gross Value Added (GVA) per employee is often used as a measure of the productivity of a sector compared against other parts of the economy. Overall, GVA per head across the key freight sectors is estimated to be an average of 39,550 per employee, some 12% higher than the average for the UK economy as a whole. Productivity is highest in the cargo handling sector, where GVA per head is estimated at 62,800 per employee (80% above the UK average). Overall the freight sector is estimated to generate a GVA of 720 million in the local Heathrow Villages Ward area and over 1,187 million in the wider District. Freight and Servicing Activity and Impacts Following validation and extrapolation to a year of the activity data collected by the study it is estimated that there are some 1.9 million (one way) annual freight and servicing-related trips currently to Heathrow Airport. Nearly two-thirds of these trips are related to cargo and mail activity, with terminal and office servicing accounting for 13% and aircraft servicing accounting for 23% of all trips. Each long haul flight generates roughly 9 landside cargo and servicing vehicle movements. Freight and Servicing Vehicles to the Airport per Annum Deliveries Direct to Study Area Warehouses Shuttling from Study Area Warehouses Direct to Airport Total Terminal and office 238,233 48,768 31,498 157,966 servicing (13%) Cargo and mail 632,375 456,050 141,258 1,229,683 (65%) Aircraft servicing 96,743 294,863 38,824 430,430 (23%) Grand Total 777,887 782,411 338,048 1,898,346 Estimated Heathrow Related Annual Vehicle Movements by Type (One Way) The estimated total Heathrow related freight and servicing vehicle kms (two way) are around 247 million kms per annum and due to the greater distances travelled by cargo and mail activities these account for 90% of all vehicle kms. Some 53 million kms (22%) are undertaken by Heathrow related freight and servicing vehicles within the study area. Additional modelling activity undertaken as part of this study includes the AECOM External Costs Model which is able to calculate and forecast external transport impacts in a monetised form. These impacts cover congestion, infrastructure wear, air quality, accidents, noise and CO 2. The External Costs Model estimates 226 million of external costs in 2009 on a national scale attributable to Heathrow-related freight and servicing activity and 51 million within the Study Area. The single largest cost impact under current valuation practices is congestion (65% of the total) and smallest is air quality (5% of the total).
AECOM 626 WLA Heathrow Freight Movement Study Executive Summary 6 Whilst there is no doubt that Heathrow freight and servicing represents a significant level of commercial activity, it must been set against the context of overall vehicular activity within the Study Area, of which it represents 0.4% of total vehicles, 4.9% of HGVs and 1.6% of vans. Non Heathrow truck traffic represents the overwhelming majority of HGVs in the study area. In relation to the study survey cordon screenline Heathrow related freight and servicing activity represents 46% of all HGV activity, 23% of van activity and 5.7% of all motor vehicle activity. Freight and Servicing Activity Forecasts Based on the knowledge gained as part of this study on existing freight and servicing vehicle volumes, types and patterns of activity The Heathrow Freight Forecast Model developed for the study is able to forecast future freight and servicing vehicle volumes for a variety of different future scenarios at Heathrow. These forecasts are achieved through the development of relationships within the model between freight and servicing activity types and various airport growth parameters. For example the model contains a relationship between cargo vehicle volumes and forecast cargo tonnage arriving or departing on aircraft at the airport. There is a further relationship within the model between aircraft catering vehicles and forecast aircraft movements at the airport. Using 1.9 million one-way trips as the 2009 base case, freight and servicing activity to 2020 was forecast against the following three growth scenarios: Scenario A: Airport development within existing limits with Air Transport Movements (ATMs) capped at 480,000 per annum; Scenario B: Airport grows to around 605,000 ATMs per annum by about 2022 with the long haul proportion of the total ATMs growing in line with historic experience; and Scenario C: Airport grows to around 605,000 ATMs per annum with the short haul proportion of the total ATMs growing at the expense of long haul ATMs reflecting the potential need to artificially influence the ATM mix in order to ensure that environmental limits are met. For each of the above scenarios the model forecasts for the 2020 annual number of freight and servicing trips to Heathrow Airport are as follows: Scenario A: 2.1 million an increase of 10% on 2009 Scenario B: 2.5 million an increase of 34% on 2009 Scenario C: 2.4 million an increase of 29% on 2009 2020 Forecasts Freight/Servicing Vehicles One Way Trips Freight/Servicing Vehicle-kms External Costs of Airport- Related Freight /Servicing Vehicles Tonnes CO 2 Released by Airport-Related Freight/Servicing Vehicles Scenario A 2,085,778 (9.8%) 276,931,432 (12%) 251,021,000 (11%) 174,708 (13%) Scenario B 2,544,765 (34%) 344,378,940 (40%) 312,553,000 (38%) 217,878 (41%) Scenario C 2,446,809 (28.8%) 326,619,577 (32%) 296,473,000 (31%) 206,465 (33%) Total Heathrow Freight and Servicing Vehicle Generation and External Cost Estimates
AECOM 626 WLA Heathrow Freight Movement Study Executive Summary 7 Scenario B where ATMs grow to around 605,000 per annum by 2022 with the long haul proportion growing in line with historic experience represents the greatest freight and servicing traffic impact with an increase in vehicle trips of 34% and increases in vehicle kms and external costs of around 40%. Options and Interventions Following stakeholder and industry discussions and two workshops undertaken as part of the study a number of options/interventions have been identified to either help improve the efficiency of the industry or help reduce the impact of the industry on the local community. Many of these interventions were devised to try and address some of the major pinch-points and issues raised by stakeholders and consultees. In particular these focussed on: Control Post congestion; Delays in freight collections and deliveries at the Cargo Centre; and Peak time congestion on the M4 and M25. Issues relating to transport security and lorry parking were not raised as problems. Interestingly lack of provision of public transport for employees to access the airport, particularly the Cargo Centre, from areas to the West of the airport were raised. Wide-ranging options include ideas such as load consolidation and collaboration, driver training and fuel management, performance management, infrastructure re-design and rationalisation, modal shift and the use of alternative fuels. The impacts (external costs) of a number of The design of the cargo centre is now out-moded. these options have been modelled using the External Costs Model and Freight Forecast Model to identify which options might result in the most significant benefits. TRANSPORT COLLABORATION AND THE USE OF SHARED INFRASTRUCTURE BEHAVIOURAL CHANGE REDESIGN OF LOGISTICS SYSTEM Establishment and use of shared services for inter-airport trunking operations Improved back loading Upstream consolidation of food supplies to flight kitchens Last leg consolidation of aircraft supplies Consolidation of newsprint deliveries Shared collection/delivery services between off airport warehouses and airport Control post strategy Shared bus/lorry lanes Out of hours network operations Customer education Driver training programme Fuel management programme Reduction of hubbed freight from Heathrow Re-location of the existing cargo centre Rationalisation of forwarder warehouses Cargo centre Vehicle Booking System (VBS) Cargo consolidation centre Cargo centre redesign MODAL SHIFT Rail freight Emission controls POLICY, VOLUNTARY Service and delivery charge AND REGULATORY Freight Operator Recognition Scheme INTERVENTIONS (FORS) Performance management ALTERNATIVE Use of electric powered vehicles FUELS INTELLIGENT Freight Exchanges TRANSPORT SYSTEM (ITS) Radio Frequency Identification (RFID) SOLUTIONS Delivery and Service Plans (DSPs) Freight Quality Partnership (FQP) Mobile refrigeration equipment Higher capacity vehicles Use of gas powered vehicles IT based security systems Vehicle Booking System for cargo centre
AECOM 626 WLA Heathrow Freight Movement Study Executive Summary 8 Potential Impact Reduction Options (those in yellow indicated modelled options) The interventions were tested to 2020 and compare the 2020 external costs without the proposed intervention against each of the three Heathrow growth scenerios A, B and C. Each intervention was tested against a low, medium and high take up or market penetration of the option. The table below provides a summary of the modelling outputs tested against growth scenario A (airport development within existing limits with ATMs capped at 480,000 per annum). It shows the top six total external cost saving interventions that were modelled. External cost savings against Scenarios B and C would be greater. For the options modelled greatest external cost savings arise from: Option Description ECM Scenario Total Saving M Total Saving % Improved back-loading Medium 32.6 13.0% Reduction of hubbed freight Medium 20.4 8.1% Use of higher capacity vehicles Medium 17.0 6.8% Establishment and use of shared services for interairport trunking operations 2 11.1 4.4% Mode shift to rail freight Medium 9.3 3.7% Out of hours network operations, spread to interpeak and night-time periods Medium 6.6 2.6% Recommendations Whilst it was not an objective of the Heathrow Freight Movement Study to produce an action plan or programme of interventions designed to contain or reduce impacts, an increase in freight and servicing vehicle activity to 2020 of between 30% and 40% does indicate that such a strategy should be developed by key stakeholders. Recommendations are grouped into the following categories: Business Led Opportunities Client Group Actions Further Studies and Activities Business Led Opportunities Industry Cost savings and a Business Led Forum. Competition in the logistics sector and continuing fuel price rises will no doubt continue to drive transport efficiencies and the sector will respond with innovative solutions that may reflect the options and interventions offered by this study. Whilst the options modelling provides an indication of the external costs saving attributed to each intervention, and these can be used as business drivers particularly in respect of Corporate Social Responsibility, direct cost savings to the organisation are a definite motivator for change. Option Description ECM Scenario Potential Fuel Cost Saving to Industry M
AECOM 626 WLA Heathrow Freight Movement Study Executive Summary 9 Improved back-loading Medium 413.2 Reduction of hubbed freight Medium 258.6 Use of higher capacity vehicles Medium 215.5 Establishment and use of shared services for interairport trunking operations 2 140.7 Mode shift to rail freight Medium 117.9 Out of hours network operations, spread to interpeak and night-time periods Medium 83.7 Potential Annual Business Cost Savings Derived from the Options/Interventions To facilitate collaborative ventures, develop better practices and deliver market led efficiency improvements the development of a business led Logistics Forum is proposed. This might comprise of representatives from the following local businesses: Cargo agents Freight forwarders Airfreight hauliers Express, courier and mail The forum would most likely ultimately need to be self-financing, compliment the work of the West London FQP and operate to a strict remit. This remit could include an objective to implement impact reduction measures as a mechanism to avoid the possible mandatory imposition of controls, such as emissions standards, infrastructure charging and planning/land use constraints. Client Group Actions It is clear that BAA has a pivotal role in implementing and influencing strategies and controls for all types of surface access activity at the airport. It has driven initiatives such as the Retail Consolidation Centre and its own Clean Vehicles Programme. Control Post strategy is constantly under review and being developed. A profiling/priority system and scheduling system (for example out of hours waste collections) and slot booking system should be considered. Whilst the overall impact reduction of the introduction of electric vehicles is limited, its contribution to local air quality measures and the large number of local trips in small vehicles mean that the provision of an adequate re-charging infrastructure should be achievable. The Client Group should work collaboratively to help achieve the Mayor s Electric Vehicle Delivery Plan which seeks to introduce 100,000 electric vehicles to London. Further Studies and Activities The study scope has not extended to the investigation of delivery and service practices of other comparable airports. Most do not operate within the infrastructure constraints at Heathrow but lessons learned elsewhere and a benchmarking of performance, even at a high level (such as trips per tonnes handled) could provide some useful indicators. The modelling process has shown the theoretical potential for modal-shift of trucked airfreight to rail for European traffic. The development of High Speed 1 and 2 and the recently re-emerged proposal for the Slough International Rail Freight terminal, whilst not predicated on freight tonnage inputs from Heathrow, do represent opportunities for the development of a domestic and European network connecting key airports by a fast overnight service. BAA and other stakeholders should ensure that they are fully engaged with the consultative process for the development of domestic and European rail freight services.
AECOM 626 WLA Heathrow Freight Movement Study Executive Summary 10 Finally, the complexities of operations at the Cargo Centre impact directly on the efficiency of the businesses collecting and delivering cargo. Dwell times here are unacceptably long leading to poor vehicle and driver productivity. A detailed investigation of the systems and process used by the Cargo Agents is recommended to better understand the opportunities for improvements.