Logistics: Bite-Size Insights - June 2021
Welcome to the latest edition of Logistics: Bite-Size Insights, where we consider the impact of the government’s Clean Air Zones on hauliers and if autonomous vehicles are the answer to the green haulage dilemma. We also provide a check list to avoid disputes over incorporation of terms.
Clean Air Zones – who pays?
It would be hard to ignore the recent push for cleaner air in cities across England. London has had the Congestion Charge and the Low Emission Zone (LEZ) in place for a number of years. More recently, there has been the introduction of the Ultra Low Emission Zone (ULEZ) which, from 25 October 2021, will expand from central London up to the North Circular Road and South Circular Road.
The introduction of such measures is a move to improve the air quality and health of those who live in those congested areas, and the clean air initiative is gaining momentum with a number of cities, such as Bath and Birmingham, introducing Clean Air Zones (CAZs).
This is of course part of a wider plan – in 2017, the UK Government published the Air Quality Plan for Nitrogen Dioxide (NO2) in UK (the AQP) to address the build-up of pollution in particular areas, and in 2011 announced its intention for every car and van to be a zero emission vehicle by 2050. We are clearly some way off – both in terms of implementation and the stipulate deadline. However, CAZs will increase nationally and probably at a rapid rate.
So what does this mean for hauliers? Ultimately, it means additional charges – whether that be in the form of a charge under the clean air schemes, or additional costs in taking longer, more indirect routes that avoid those areas. As an example, driving in a ULEZ area will attract a fee of £12.50 for most vehicle types, including vans up to and including 3.5 tonnes, and £100 for heavier vehicles, including lorries, over 3.5 tonnes. The charges operate 24 hours a day, seven days a week. It is estimated that a daily charge of £100 equates to an additional 25% on the daily running costs of a non-compliant vehicle.
These charges are not insignificant and will need to be absorbed somewhere along the line. With freight rates already squeezed, the increase of CAZs could be a significant factor for a lot of hauliers.
Now is the time to consider whether current routes will become part of the AQP and what alternatives may be available. If there are no alternatives, do the rates charged to customers need to be revisited? Now is also the time to consider greener options. There are technologies that can assist with lowering emissions, but those technologies come at a price.
Contact: Shaan Burton
Emission charges – are autonomous vehicles the answer?
Alongside the drive for greener vehicles, technologies are developing at a significant speed that could dispense with need for emissions charges altogether. Whilst the concept does, perhaps, seem like something far in the distant future, that is certainly not the case. The benefits to the environment are potentially huge and would go some way to tackle the government’s aim of having a zero emission vehicle policy by 2050.
From multi vehicle, autonomous ‘road trains’ to individual driverless hauliers providing first/last mile services, this developing technology will transform the logistic industry. Manufacturers are boasting fuel and other efficiency savings with autonomous vehicles calculating the most efficient route, driving speeds and operational parameters.
For vehicle operators (and their insurers), the task of transforming business models will of course take considerable planning and investment. The need to develop a deep understanding of the emerging risks associated with new technologies – not least the increased risk of cyber attacks - as well as the emerging legal frameworks, will be a vital component of any investment decision.
Our insights on the implications and the latest developments relating to autonomous vehicles can be found here.
Incorporation of terms – are you doing enough?
When seeking to rely on the terms and conditions, whether that be bespoke or industry standard, the first task is always to make sure that the terms and conditions are incorporated into the contract.
Incorporation can be achieved by making sure the customer’s attention is drawn to the terms that you are seeking to rely – this can be done in a variety of ways but in the ordinary course of business we look to references on email signoffs, letters, invoices, delivery instructions etc. Referring to the same terms and conditions on a number of documents may be enough to deem those terms and conditions as being sufficiently drawn to the attention of the customer.
However, it should not be presumed that incorporation has been achieved by simply adding a one liner or printing the industry logo on a document. Courts are unlikely to accept reference to terms and conditions being printed on the back of an invoice – it is perhaps unreasonable to expect a customer to check the back of a standard document for any terms and conditions a company may be trying to rely upon, particularly in an increasingly paperless age.
In order to avoid being caught out by the rules on incorporation, when dealing with customers it is advisable to:
- Discuss any terms and conditions that are to be incorporated at the outset
- Get express agreement to contractual terms, if possible.
- Ensure that all correspondence (letters, quotations, emails etc.) makes reference to the incorporation of those terms.
- For those who contract with customers verbally (which can often be the case in the haulage industry), it is recommended that those terms and conditions are then referred to in writing, such as by a brief email.
It is also worth bearing in mind that a customer may also be trying to incorporate its own terms and conditions. Keep a look out for such references in replies to emails, letters, quotations as getting embroiled in a “battle of the forms” dispute is never ideal; both from a costs perspective but also from a risk perspective where it may be deemed that the customer had the “last shot” with reference to its terms and conditions and those will be incorporated.