ESTON analysis – The expectable effects of the drive-in restriction

The newest analysis of ESTON International looks into the possible effects of the drive-in restrictions in the capital city.

Evaluation of the industrial zones in the capital can be attached to historical and economic geographical causes as well. Initially, the companies operating in the industrial and commercial sectors settled down in the proximity of the Danube, railways and of major public roads, dominantly on the then existing outskirts of the city. Along with the development of the Capital, begun a gradual integration of those areas.

By the 1st of January 1950, when Greater-Budapest came into existence and the townships around the capital joined Budapest, these areas became inclusions on the trace of the building activity of the suburban housing estates. Nowadays, many aspects influence the transformation of the industrial warehousing and not least the logistics areas in Budapest. In the first instance, municipality regulations have a remarkable effect on this process, which, for the sake of an enhanced quality of living, are to control the heavy traffic and to regulate operation permits of those companies whose operation emits noise or pollution in the township of Budapest.

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Firstly, the Municipality of Budapest restrained the drive-in of heavy trucks into Budapest: permit fees were increased to 6-10 times more of the previous and from the 1st of March 2008 territories of truck-weight limitations were extended almost to the whole territory of the city. (Except for those drive through roads that substitute the not-yet existing sections of M0) While previously blank permits were issued to the requestors (permits could then be transferred to several vehicles within a given company) a significant restriction became in effect with the issuing of such permits for designated vehicle plates. For an effective control, Parking Kft., owned by the Municipality of Budapest, is planning to install a number plate reader camera system covering the whole territory of Budapest by September 2009.

As the second step, from the 1st of January 2009, a new regulation (no. 80/2008, XII.30) controls the heavy truck itineraries. Due to this regulation several destination and transit roads were ceased. By gradually narrowing the range of the destination roads, further restrictions of the drive-in of the trucks would be carried out in several steps, until 2018.

The above described alterations hit hard companies of the freighter, industrial and commercial sectors and they have been lobbying for the mitigation of the regulation since then. According to Ernő Kiss, head of the industrial division of Eston International, the companies doing regular warehousing or freight business in the restricted areas have to face the changes relatively suddenly. It takes some time to consider whether the increased expenses on the drive-in would raise the fix costs so much that it would be worth looking for warehouses or settling down beyond the city lines. As a result, some of the smaller freight companies may even fall out from the market.

Operation of larger logistics companies may not be shocked after all, as those are located predominantly out of the city. There are some exceptions among the companies (e.g. DHL, DPD, Lagermax, TNT) which have several smaller units in the city, therefore the possibility of contracting the warehouses and premises may come up as a tool for reducing expenses and improving efficiency.

Moving out can be perceived as a process of modernization from the aspect of production companies during what the smaller, out-of-date production halls are exchanged to modern centres (e.g. Zwack’s moving out from the 9th District to Dunaharaszti).

According to Eston experts well-funded companies may find a partial solution in transforming their heavy truck fleets: running a greater number of small vehicles instead of a few big vehicles. However, this may not be feasible for some vehicles supplying certain construction materials; the high amount of drive-in fees may harmfully affect the construction costs. Besides, if many companies choose to disintegrate their fleets, a heavier traffic, with less-than optimal capacity utilization, would appear on the roads leading to more emission. This would somewhat confront those expectations of the population and “Levegő Munkacsoportâ€? (Air Workgroup) regarding a considerable reduction in truck traffic, a significant ease of the air and noise pollution and rather traffic jams as favourable results of the regulation.

Due to the traffic regulation the logistics and warehousing market is constantly changing, transforming, and gradually supplanting the companies towards the unfinished M0 ring road. This generates traffic congestion in the noted area but also a sharp competition among industrial property development companies. Building along the line of the ring road has already been started – several production, warehousing, logistics companies decided that they would relocate their smaller warehouses and premises close to the motorway. As the logistics companies are bent on staying close to their partners, this could intensify the migration towards their customers. The extension of the southern section of M0, to 2×3 lanes, is expected to complete in 2012 which could ease the frequent congestions.

Adorján Salamon, CEO of Eston International, expects a price rise regarding the plots out of the city lines; he also foresees an increasing demand for the existing business parks as there is still development potential in them. The section of M0 between M7 and M5 is already popular but the re-dynamization of the M0 actually started only after the completion of the new section.

Most of the tenants of the city business parks are companies distributing or involved in industrial-assemblage within the city and where being in the city is essential; mostly delivery trucks are in their fleets. On the trace of the regulation, it would be timely to create a unified plan to organize the loading and unloading of goods at small shops as based on certain traffic counting data commercial vehicles are most active in the early morning peak-hours, often closing entire lanes of traffic. Overnight or outside peak-hours freightage could be a remedy for this problem.

The displacement of the industrial areas from the inner region started earlier, and this is not a specific consequence of the decree. Instead, it is mainly a result of the natural growth of the property market. An excellent example to this is Central-Ferencváros where lots of residential and office developments have started, with a remarkably higher profitability than for industrial premises, and where industrial areas have transformed to development plots one after another. This process seems to stop due to the crisis as nowadays there are not many buyers, who are willing to invest, to be found on the market.

Besides, certain municipalities restricted the process of issuing premise permits; especially those based on production. This, along with the traffic regulation, also deters some companies from settling in the city.

To summarize, the practice of traffic regulation is different in every country. It should be noted though, that not similar truck weight restrictions, which comprise to the whole territory of the city, have been introduced in the EU.

In Vienna a 50km/hour speed limit was introduced 3 years ago on the whole territory of the city, then from the 7th of January 2008 a drive-in ban is in effect for the vehicles which were registered before 1991.

Berlin, in defence of its inner districts, made separate arrangements from the 1st of January 2008 which relates to every type of vehicles, not only to trucks. In order to roll back the emission, they created a zone impounded by the S-bahn ring where environment polluting vehicles cannot enter except on a permit and at a charge.

In Barcelona, in order to ease the continuous transit of goods special loading points were created in the cross-roads, preventing traffic jams caused by loading and unloading. In addition, in the case of certain multilane streets the trucks can run on designated lanes after peak hours, while at night hours residents can use these lanes for parking. Changing of the traffic order is shown on electric displays. In defence of the downtown, electric gates were established on the border of the inner zone, which can only be crossed by residents of the area, or, within an allotted period of time, by suppliers with permits.

The most complex freight system is evolving in Amsterdam; the project is currently in the configuration phase. The main logistics centres are being established along the motorway ring that is also an end stop for big trucks. From this point trams, using the existing network, would carry the goods to the smaller centres in the city. Final transport would be carried out by e-cars (electronic trucks).

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