LIFE WITHOUT TRUCKS: THE IMPACT OF A TEMPORARY DISRUPTION OF ROAD FREIGHT TRANSPORT ON A NATIONAL ECONOMY

Journal of Business Logistics, 2006 by McKinnon, Alan

Twice over the past 30 years Britain has suffered severe paralysis of its road freight system. This paper explores the likely consequences of a complete cessation of trucking services over the period of a week. By analysing inventory levels, lead times, dependence on road transport and opportunities for substitution in critical sectors, it forecasts a rapid rate of economic collapse.

Key Words: Trucking, Supply Chain Vulnerability, Economic Dependence, UK.

INTRODUCTION

In recent years several studies have examined the vulnerability of individual company supply chains to various forms of disruption (Svensson 2000; Juttner, Peck and Christopher 2003; Peck 2005). They have established the need for logistics managers to conduct formal risk analysis and adopt a series of measures to improve the resilience of their operations. Most of this work has adopted a micro-level perspective, focusing on particular businesses or supply chains. The 'construct of vulnerability ' devised by Svensson (2002), for example, 'refers to the focal firm's inbound and outbound logistics flows'.

This paper presents the results of a macro-level assessment of the impact of a catastrophic failure of a country's road transport system. The main purpose of the research was to illustrate, to government officials, company management and the wider public, the dependence of the UK economy on the road freight sector. A subsidiary aim was to examine the process of economic degeneration that would result from the widespread dislocation of supply networks and to highlight points of maximum vulnerability in these networks. This has been done by hypothesising a total shut-down of trucking services in the UK for a period of one week and assessing the rate at which industrial, commercial and welfare systems would collapse.

This would be an example of a very low probability/very high impact event that could bring a whole country to a standstill. The British government has classified emergency situations into five categories in relation to their impact and geographical extent (Figure 1). The scenario envisaged in this paper would fall into the catastrophic category, triggering a radical response from government agencies at national, regional and local levels. While it would be very unlikely to occur so abruptly and completely, there have been two occasions over the past thirty years when road haulage operations in Britain have been seriously disrupted: during the 1979 truck drivers' strike and the 'fuel crisis' of September 2000.

PREVIOUS ROAD FREIGHT CRISES

In 1979 approximately 50,000 truck drivers went on strike for a period of six weeks in an effort to secure a substantial wage increase. Although only 12% of all truck drivers participated in this industrial action, many engaged in ' secondary picketing', disrupting freight flows to and from premises other than those directly operated by their employers. Much of the secondary picketing was targeted on the food distribution system. Over the first two weeks of the strike this type of picketing severely constrained food movements at the upper levels of the supply chain, forcing consumers to rely heavily on the stocks of food held at or near the points of sale (McKinnon, 1981 ). In the late 1970s, inventory levels were substantially higher than today offering a greater cushion against transport disruptions.

The 'fuel protest' of September 2000 had a much more rapid and dramatic impact on economic and social conditions in the UK. This was precipitated by steep increases in the price of diesel fuel in the UK, which was already 66% higher than the EU average (Road Haulage Association 2000). At short notice and without the support of any national organisations, groups of hauliers and farmers blockaded oil refineries and fuel distribution depots and blocked major roads (Lyons and Chatterjee 2002). Within two days of this action starting, approximately half the nation's petrol stations ran out of fuel and fuel supplies to industry, transport fleets and utilities were severely disrupted. The resulting 'fuel crisis. . .paralysed critical infrastructure sectors and brought the country to a virtual halt' (PSEPC 2005). The protest ended after five days, just as much of the manufacturing sector was about to close-down, serious food shortages were developing and hospitals were beginning to offer only emergency service. As Marsden and Beecroft (2002) noted: 'Supply chain problems would have been much worse had the crisis continued one or two days more'. It was estimated that over each the last four days of the disruption, an average of 10% of national industrial output was lost, valued at £250 million per day. Even at the height of the disruption, however, the volume of truck traffic on the UK road network was only around 10-12% below the average (Hathaway 2000). The scenario constructed for the present analysis is, therefore, an order of magnitude more severe as it would involve the complete cessation of trucking operations.

METHODOLOGY