Director, National Valuationt: +44 207 182 2663 Ben.Thomas@cbre.com
Senior Analyst, National Valuationt: +44 207 182 2683 Judy.Zhu@cbre.com
“Location, Location, Location” is an ongoing blog series, which will look to explore the rationale behind the decision-making process and each new entry will focus on a key factor. Click here to read the previous post.
In previous posts in this series, we have looked mainly at the labour market, which is a primary driver when an occupier is considering the location of a logistics warehouse. Now we focus our attention on the topic of access to transportation.
In the UK, and under EU Legislation, HGV drivers with a vehicle of over 3.5 tonnes must not drive for more than 9 hours in a day, with a break of at least 45 minutes after the first 4.5 hours (including loading and unloading). As a result, more than 20% of big boxes in the UK have been built in the “Golden Triangle.” This is an area in the centre of the UK that broadly runs from Birmingham, up towards Derby and Leicester and then down to Northampton and Milton Keynes. It is estimated that 90% of the UK’s population live within a four-hour drive from the Golden Triangle which allows goods vehicles to deliver without the need for a driver break.
With the Golden Triangle being the heart of the logistics system, the road network is therefore the veins.
In this post, we are going to discuss some facts and figures of the road network in the UK.
- Top Roads by HGVs Traffic
The map below shows the top 20 roads with the highest HGV traffic volume in 2016. We can see the top 3 are the M6, M1 and A1.
The M6 accounted for 8% and the M1 7% of the UK total HGV traffic volume in 2016. These two roads combined carried more than one third of the total HGV traffic across the busiest 20 highways in the UK.
The M6 and M1 were more heavily used by larger HGVs than smaller goods vehicles: 11% of all 2-axel to 5-axel trucks travel on M6 and M1 combined, which is almost half of the amount of 6-axel vehicles do, where 21% of all 6-axel trucks use these roads. If you are interested to read more about different types and weights of trucks, please click here.
- Goods Moved by Road
There are three key metrics to identify the trend of goods moved by HGVs by road. Namely: Goods Lifted (the weight of goods carried); Goods Moved (the weight of goods carried multiplied by the distance hauled); Length of Haul – (Goods Moved divided by Goods Lifted).
In the graph below, it is worth noting that articulated vehicles over 33 tonnes moved the most goods throughout last decade. This is mainly due to the high tonnage carried, rather than the length of haul. As we can see the average length of haul was broadly similar for articulated vehicles above and below 33 tonnes.
For all HGVs, length of haul decreased by 1.33% annually over the last 5 years. Meanwhile, goods lifted increased by 4.19% annually. This trend is much more pronounced in smaller goods vehicles.
Some theories as to why this is happening:
- To cater for the increasing demand for faster delivery from online shoppers, there are an increasing number of small size warehouses been built across the country, often labelled as ‘Urban Logistics’. Therefore, distance between the last-stop warehouse and the final destination has decreased.
- To achieve faster delivery, it requires more than just shorter delivery distance, the logistics model also need to be more flexible. As a result, there are an increasing number of smaller HGVs being used to serve as the “last mile” delivery solution or transporting goods efficiently between units. This can explain why the annual change of the metrics for smaller HGVs are bigger than larger HGVs in recent years. This would be even more pronounced if ‘white vans’ were included in the statistics (however, at a weight of around 1.5 tonnes, they fall below the 3.5 tonnes threshold for HGVs).
- HGVs Registration
Now we know the total goods lifted by HGVs each year have increased, but what are the main drivers behind this? Is it a result of an increase in the number of vehicles on the road or an increase in the goods being carried?
In the graph below, we can see that vehicles over 41 tonnes had the largest increase in registrations. However, these vehicles didn’t have the biggest increase in the goods lifted.
In contrast, vehicles in the lowest range (3.5t – 7.5t) had the biggest annual increase in goods lifted, but they had the lowest annual growth in the number of registrations. This means the average amount of goods carried by each vehicle has increased significantly, which proves the efficiency of smaller HGVs has been improved in the latest logistics operating model. In essence, smaller trucks are carrying more than before.
In the UK, the traffic volume of HGVs, especially the larger sizes, has the highest density on the main motorways. However, the smaller road network is playing an increasingly important role in the logistics system. This is due to the shift of logistics model toward faster, more flexible and efficient operation in order to cater for the growing demand for a shorter delivery time.
In the next issue, we will cover the topic of access to ports.
If you are interested in more details of this report or our other logistics reports, please contact Ben Thomas, Director of CBRE National Valuation – Logistics & Distribution, or Judy Zhu, Senior Analyst of CBRE National Valuation.