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Freight fright

Douglas Fraser | 19:37 UK time, Friday, 23 October 2009

If you want a haulage firm to shift a pallet of your goods from Manchester to London, it should cost you around £45.

But if you want it trucked from Lanarkshire to London, it will cost you less. Perhaps £38.

Some hauliers may be willing to offer you less than £30, which is below their costs.

This is just to fill up space on the south-bound trip, because while there's still lots of freight heading up the A1 and M74 to supply Scottish businesses and shops, there's far less Scottish produce now available for the return trip.

Yet it's only by filling trucks on all their trips that the freight industry can make its profits.

Those figures aren't good news for the haulage industry, particularly the Scottish businesses that depend on the England-Scotland routes.

Typically small operators, they are up against much bigger hauliers who can cross-subsidise their more northerly destinations with a wider range of English and continental routes.

More widely than that one industry, this tells you a significant story about the state of the Scottish economy.

It's true that many of the most successful manufacturing businesses - for instance, Weir Group, Clyde Union, Aggreko and BVT - shift a lot of their produce by air, train or ship.

Others, in the service sector, can deliver online.

But the lorry remains a vital link for getting Scottish goods to market - not only to England, but to English ports.

And these freight costs show that Scotland is making a whole lot less than it was.

The biggest gap in recent years has come from electronics.

It's not that Silicon Glen has disappeared. Scotland still shifts around £4bn in export earnings from its electronics sector.

But only ten years ago, it was shipping more than £11bn worth.

And from the point of view of the hauliers, it doesn't help that electronic products have become more compact.

The other lesson worth noting is how important the rest of the UK is to Scottish businesses.

The most recent input-output tables tell us that 42% of Scottish added value is accounted for by Scottish customers.

While 10% is investment, and 17% is government expenditure, 31% is exported from Scotland.

Of that 31%, 21 percentage points are accounted for by England, Wales and Northern Ireland, while 10 percentage points are sent further afield.

The Scottish government has policies to develop its links with its major trading partners - notably the US, Germany and China, with more emphasis being put in recent weeks on India's potential.

So what's the policy on exports to England?


Comments

  • Comment number 1.

    So what you're saying here Douglas is that ten years of Labour Govt have led to a collapse in the value of goods being "exported" from Scotland to England. That figures.

  • Comment number 2.

    It is true to say that the govt over the past 12 years has decimated both agricultural and manufacturing industry to such an extent that exports to the rest of the UK and beyond have been severely reduced. And this was before the recession.
    The only sectors that were doing reasonably well was the service and leisure industries but they didn't earn anything for this country.

  • Comment number 3.

    Don't blame the government blame English companies who buy up Scottish one then move production south to be nearer to their markets.Example S & N Fountain Brewery they spent 10.25 million on a new kegging line 18 months later they closed it & moved it to England. Green King have announced they are to stop bottling at Bellhaven Dunbar moving production to England.
    Its happening all the time Scottish firms being bought & move south

  • Comment number 4.

    Douglas - For some years Scotland's big exports have been OIL and GAS. Lorries from Lanarkshire are not involved. Your implication that we need a manufacturing industry is correct.

  • Comment number 5.

    The final sentence spoils an otherwise balanced and reasonable post and really does make the author seem biased against the SNP.

    But anyway... is the English market not low-hanging fruit from a Scottish perspective, and thus probably already fairly well tapped (whilst also being familiar, easy to research, etc for anyone in Scotland looking to increase their volume of business there)? Does it not therefore make sense to spend limited public resources encouraging and supporting the establishment of additional trade between Scotland and slightly less easy-to-tap markets, such as Germany (and other EU member states), the US and China?

  • Comment number 6.

    The whole of the UK needs a manufacturing industry. That stuff coming North only landed in England. It was made outside the UK, everything is... apart from house price inflation and bank disasters.

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