LETTER TO CLERK TO JOINT COMMITTEE FROM INDUSTRIAL DEVELOPMENT AUTHORITY
I refer to your letter of April 2 requesting the views of IDA on the operations of Córas Iompair Éireann.
The operations of CIE affect the activities of IDA in the carriage of freight, rather than in passenger service. Since IDA does not directly engage these services our comments on freight operations relate to views expressed to us by industrialists, and to general studies carried out on freight transportation.
One study of some relevance to your examination was commissioned by IDA in 1974. It was carried out by A. T. Kearney, International Management Consultants, and examined freight transportation facilities and disabilites which affect Irish manufacturers. Some of the principal disabilities highlighted are as follows:—
(1)Manufacturers in Ireland are at a disadvantage due to the higher cost and lack of flexibility in transportation services.
(2)Although containerised export consignments are fast and well administered, groupage consignments present problems.
(3)The road haulage industry is in an economically weak state.
(4)Problems and delays arise in customs documentation and procedures.
Since this report was completed some of the disabilities which relate to licensed haulers have been improved. Discussions with industrialists suggest however that many of the findings are still valid. We enclose a copy of the report which will give you a detailed analysis of freight transportation problems.
The percentage of road freight being handled by CIE is still comparatively small. Most of the growth in road freight seems to be occurring in the licenced haulage and own account sectors. Within the past five years we are aware that CIE have made significant improvements in their freight service, both in the provision of liner train services and in the establishment of rail heads, equipped with modern handling equipment, at strategic locations.
In the Government white paper ‘Programme for National Development 1978/1981’ manufacturing industry have been given a central role in job creation, with a nett job target of 10,000 p.a., from a total job target of 25,000 p.a. This is a much higher rate of job creation than has been achieved in the past, and will require an efficient transport service. The total volume of exports is expected to grow by 12% p.a. with a growth in manufacturing exports of 16% p.a. e.g. from £1,880 M in 1978 to £3,403 M in 1982 at 1978 prices. This means that the volume of manufacturing exports will increase by 80% in four years with consequent implications for imports, as many industries are dependent on a high percentage of imported raw materials.
Regional industrial development is a key element in the IDA’s industrial development programme, e.g. Manufacturing employment in the west region increased by 60% in the period 1973/1977. This emphasis on regional dispersal of manufacturing employment has major implications for internal freight transport and for CIE. We welcome the improvements in container handling facilities which CIE is making at regional railheads. This supports our regional programme and reduces traffic congestion on roads.
The growth in the demand for groupage and containerised service results from the type of manufacturing industry which is setting up in Ireland, e.g. high value/low volume products. We believe that this trend will continue. The growing utilisation of Ro-Ro services, even at their higher cost, emphasises the need for a reliable and rapid door to door service in which the transporting agent takes full responsibility for the delivery. This will have implications for CIE services.
As an island economy on the fringe of Europe our economic growth is very dependent on a well developed transport service on land, sea and air, which is competitive in terms of capacity, cost and quality with services which are available within the EEC Industrialists occasionally state that they consider that the standard of our transport services is still inadequate. To back up this statement they point to the high level of own operated transport in Ireland, e.g. over 60% even though it has a very low level of utilisation; the higher cost and inadequate frequency of sailings from Irish ports which result in private haulers in the south of Ireland using the Stranraer/Larne route, and the weak state of the private haulage industry.
To sum up, the IDA believes that it is essential for Ireland’s economy and for the creation of jobs, to rapidly improve the capacity and standard of our freight services within Ireland, and between Ireland and our overseas markets.
I trust that these comments and the attached report will assist your committee in understanding the complex background problems which are associated with the freight transportation industry, and which are directly related to the operation of CIE.
T. CAHILL O’BRIEN
Physical Resources and Skills Section,
Research and Planning Division
23 April 1979.