Contractors handling projects in London’s Ultra-Low Emission Zone (ULEZ) responding to the environmental initiative introduced on April 8, 2019, could be unwittingly creating new insurance risks, as they seek solutions to the restrictions imposed.
Research carried out by construction logistics company, Wilson James, suggests that a third of the construction vehicles delivering to sites within the ULEZ are not compliant with the new clean-air regulations. These regulations demand such vehicles meet Euro 6 standards, or pay a fine of £100 per day, with no relaxation of this requirement on any day of the year or at any time of day.
Staggeringly, the average construction site within the ULEZ receives 300 deliveries a day and, if the research is correct, one third (100) of those vehicles would not meet the requirements set out by Euro 6. That could equate to a daily fine of £10,000, to service just that one site.
These figures seem to make sense. After the introduction of the ULEZ, Motor Transport magazine calculated that approximately 500 non-compliant trucks entered the zone in the first month alone.
Such fines would be a massive burden for any project and far too high a cost to incorporate into tenders. New solutions are essential.
Some forward-thinking companies have already made headway in trying to solve the costly dilemma facing the construction sector. MR Scaffolding Services, for instance, has introduced automated technology in the form of heavy-duty drones, which are deployed to make the necessary inner-London deliveries to construction sites.
As upgrading a 180-tonne curtain-sided lorry or heavy-duty truck to meet the Euro 6 standards would cost a construction firm around £75,000, drones may well be the future when it comes to ULEZ deliveries. As the ULEZ is set to be extended to incorporate Greater London, exploring other options now makes good financial sense.
Some construction companies are already setting up depots outside of the ULEZ and shipping goods in to ULEZ sites via electric vans. This may be a good strategy as Construction Consolidation Centres (CCCs) already exist and allow contractors to dispatch fully-loaded compliant and clean-air friendly vans. As environmental concern increases, some project managers are now stipulating such facilities be used, when writing their tender briefs.
Such change requires habits to change and consignments to be handled very differently, be that in terms of the vehicle used, the way vehicles are loaded, the weight borne or the fact that firms are operating on shared sites, where there is a constant vehicle flow.
A number of factors need to be considered; new risk assessments, training programmes and risk mitigation procedures must be adopted swiftly and absorbed into projects with tight deadlines and limited capacity to take on board new training. Contacting insurers to declare any changes or modifications to the way risk is managed is essential, or future claims could be affected. Soon this may not just be a London issue, as other cities are set to follow London’s lead.
Speaking to an experienced insurance broker can help significantly with evolving scenarios such as this, which encompass fluid risks that need managing highly effectively. If you need to find a specialist broker to help you keep all risks under control, please get in touch.