Ciarán Ahern (Dublin South West, Labour)

I welcome the fact that we are discussing haulage costs and the SME sector more broadly today. It is an issue that goes to the heart of our economic well-being and our regional development - more pertinently, our balanced regional development - as well as the survival of thousands of SMEs across our country. The cost of moving goods on Irish roads is one of the greatest threats to the competitiveness and, many cases, survival of many of our small businesses, such as artisan food producers in the west, engineering firms in the midlands and family-run exporters in the south east. The Labour Party has long championed the role of SMEs in sustaining good jobs and vibrant local economies. Today, those businesses are being squeezed from all sides. The cost of transport has become a pressure point that exposes the other vulnerabilities in these businesses.

Haulage costs have risen sharply over recent years. Many of the same issues that are faced when it comes to the general cost of motoring, which we discussed here last week, are being felt in terms of haulage costs. Those issues include fuel price volatility and insurance premiums that remain stubbornly high. Other issues include increased compliance costs. We cannot discount the lingering logistical impact of Brexit. An SME owner who once could plan a year's costs with some certainty in advance now faces almost monthly guessing games in many cases. Hauliers, and by extension SMEs, are asked to absorb these rising costs while dealing with a chronic shortage of drivers. Our businesses rely on road haulage for almost all domestic freight movement, an issue I will come back to. Unlike larger corporations, SMEs cannot negotiate better rates or hedge their fuel costs on international markets. They cannot simply pass increases directly on to consumers either. They take the hit and very often, they are pushed dangerously close to the edge.

From my perspective, this is not just a temporary market disturbance. This is structural. It exposes weaknesses in Ireland's transport infrastructure, the lack of alternatives and the absence of a clear Government strategy for sustainable and affordable freight movement. We cannot ask SMEs to compete internationally while saddling them with some of the highest logistics costs in Europe. Nor can we pretend that the haulage sector and the infrastructure around it - the trucks on our motorways in the early hours of the morning and the local drivers who keep our shelves stocked and our supply chains continuous - are somehow an optional extra in our economy. They are essential but unfortunately, all too often, Government policy treats them as an afterthought.

We need to acknowledge that these rising costs do not fall evenly. This is an issue of concern in terms of balanced regional development. Businesses in rural Ireland, which are already further away from ports and major urban centres, are hit hardest. Every extra kilometre, every extra fuel hike and every insurance increase compounds the challenges they already face. When those businesses struggle, the communities around them suffer too with fewer jobs, fewer training opportunities and fewer reasons for young people to stay. If we are serious about balanced regional development, we must be serious about supporting the cost base of the businesses that anchor those regions. We should consider a national freight strategy. I know we have a road haulage strategy, which extends out to 2031, and a rail freight strategy, which extends out to 2040, but it would be helpful to marry the two. We need a plan that is more than a collection of disconnected initiatives.

Accelerating investment in alternatives will be key if we are to overcome the challenges faced by the haulage sector and, by extension, by SMEs that rely on road haulage. It is all the more reason we need an holistic overarching freight strategy. We need to see a scaling-up of electric and hydro HSV infrastructure so that SMEs are not stuck paying high diesel prices while the rest of Europe moves ahead. I acknowledge that hydrogen and battery electric trucks remain all too rare here and that 50% of our haulage fleet is over ten years old and diesel-powered. That being the case, as our hauliers try to decarbonise and reduce our transport emissions these additional costs should not all be passed on to the businesses that rely on them. The Government should consider rebates and tax supports to incentivise the uptake of low-carbon but often higher-cost fuels like HVO and biodiesel blends.

Government should also consider incentives to replace older, higher-emitting trucks with older, more efficient models. Cost-neutral measures such as how we manage our roads and even toll lanes to reduce idling time can also impact positively on the emissions coming from our road haulage sector. A renewed commitment to and focus on rail freight is really crucial though to providing alternatives and improving our infrastructure. There has to be a modal shift and that will require investment in our rail infrastructure. That also means better integration between ports, rail and road networks so we are not forcing SMEs into using the most expensive road of transport simply because it is the only one available to them.

Insurance premiums are also an issue. I will not labour the point because I made it last week when we were talking about motoring costs, but the Government and, indeed, the public have been hoodwinked by the insurance industry. The new personal injury guidelines were introduced in 2019 and between then and 2023 there was a drop, on average, of 40% in claim costs yet over roughly the same period liability premiums increased by 17%, according to the Central Bank. Meanwhile, insurance providers in Ireland are enjoying profits double the European average. It is scandalous. I echo my colleague Labour Party spokesperson on finance, Deputy Nash, as well as groups such as the Alliance for Insurance Reform, in calling for Government to bring about meaningful changes to the insurance sector. Genuine reform should lower premiums not just for the average motorist but for hauliers and the SME fleet as well.

Another area that requires serious change is the administrative burden on SMEs. If we had more streamlined compliance processes that reduced duplication, paperwork and costs while of course maintaining high standards, it would have a really big impact on the load placed on SMEs and reduce what is often a massive stressor for people who are running them. SMEs support safety, environmental responsibility and good working conditions but they cannot absorb endless administrative burdens created without consultation with them and that do not always give due regard to efficiency.

I emphasise any policy that might be produced for freight must also protect the workers who keep goods moving, including the drivers, mechanics, logistics staff and so on. All too often when we see rising business costs, the finger is first pointed at the cost of labour and this is used as an excuse to squeeze workers’ pay and conditions. We in the Labour Party reject that approach outright. A sustainable logistics sector must include fair wages and decent and safe working hours and conditions. It must include investment in driver training and apprenticeships and, crucially, supports to attract more people, especially young people, into the profession. A thriving SME sector cannot be built on the backs of exploited labour.

I conclude be re-emphasising the rising cost of road haulage is not a niche concern but a national economic issue. Every household feels it when prices rise. Every business feels it in their margins. When SMEs struggle communities who rely on them for jobs feel it. We need to see what might be called a fair deal for SMEs, hauliers and workers in the sector, one that recognises the essential role it plays in our economy and one that ensures small businesses are not crushed under the weight of transport costs they have little to no power to control. We can and must deliver a freight system that is affordable, sustainable and fair.

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