Ground Transportation 2026 Comparisons

The freight road transportation sector has suffered heavily due to the Iran–US war causing fuel prices to rapidly escalate. The effect of this is the need to adopt essential cost-saving exercises. Unfortunately, this often results in a failure to comply with the regulatory regime as diligently as necessary. As a consequence, we are seeing more instances of non-compliance and regulatory breaches. In addition to this, the financial impact on companies is causing one of the core regulatory requirements – financial standing – to be missed, which can lead to revocation of operator licences if not managed well.

The transport sector is heavily impacted by the economy and often one of the first sectors to suffer when the economy flatlines, which it has been doing now for some considerable time. A flatlining economy leads to the closure/insolvency of a significant number of operators, which results in a consolidation of the market and ultimately better prices for those that remain. Having contracts reviewed before signing can ensure items such as fuel escalators are added, resulting in the impact of events being less severe and therefore more businesses surviving. Ultimately, when the economy starts to grow, those that are left in the market can benefit significantly and for a prolonged period. Due to the timescales involved in the regulatory regime, access to the market can be slow, which can provide significant windows of opportunity to those already in operation.

There has not been any significant change in the last 12 months, nor has there been market consolidation to any great extent, although mergers and acquisitions have been occurring. Infrastructure expansion has not been at an unusual level, in our opinion.

In spite of the net zero agenda, we have not seen a significant modal shift. Instead, operators are looking at alternative fuels and there has been a slow but steady increase in the utilisation of electric vehicles, even including larger electric vehicles for 44-tonne loads. However, they are still only suitable for quite specific types of operation, as traditional haulage is not able to deal with the associated charging times and poor distances.

The principal laws governing road transportation in the UK jurisdiction are:

• the Goods Vehicles (Licensing of Operators) Act 1995 and its relevant subordinate legislation, such as that for driver hours;
• the Public Passenger Vehicles Act 1981;
• the Transport Act 1985;
• the Transport Act 2000; and
• the Bus Services Act 2025.

The operator licensing regime is regulated by eight Traffic Commissioners across Great Britain, with licences administered from a central office in Leeds. Northern Ireland is slightly different and has a Presiding Officer who carries out a similar but not identical function.

The Bus Services Act 2025 has brought further significant change to the powers of local authorities to run their own bus companies. Furthermore, franchising in the bus sector has undergone huge growth within the last two years. The implementation of the Public Service Vehicles Accessibility Regulations 2000 (PSVAR) and the Public Service Vehicles Accessible Information Regulations 2023 (PSVAIR) will have a significant financial impact on operators despite government funding schemes to help towards PSVAIR. In the haulage sector, the introduction of domestic Driver CPC (Certificate of Professional Competence) models with greater flexibility is assisting operators and drivers to fulfil their obligations.

To operate road services for freight transportation, organisations are required to hold an operator licence authorised by the Office of the Traffic Commissioner. In order to obtain this, they have to agree to undertakings and accept conditions which specify the manner in which they must conduct their operation.

Financial Requirements

Transport operators are required to satisfy the statutory financial standing requirement. This can be demonstrated in one of two ways:

• for companies with audited accounts, by meeting the required level of capital and reserves shown in the balance sheet; or
• by maintaining the required amount of readily available funds, held on average over the three months immediately preceding the date of assessment, as evidenced by bank statements.

While there are some variations and exceptions depending on the circumstances, demonstrating the required level of financial standing is a mandatory requirement for holding an operator licence.

Technical Qualifications

Operators are required to employ an individual who has the Transport Manager CPC qualification, which aligns with the European syllabus.

Cabotage rules are enforced, and the circumstances in which operators may undertake cabotage operations are limited. This applies both to UK operators carrying out cabotage within Europe and to European operators carrying out cabotage operations within the UK.

Operator Licences

Once granted, operator licences are valid for five years and must be reviewed every five years in order to continue operating. Critically, they are not transferable as part of an M&A transaction. This requires careful management to ensure that companies do not find themselves without a licence post-transaction and is a common error made by many large firms that do not understand the operator licensing regime.

Licence Suspension or Revocation

There are a wide range of circumstances in which licences may be suspended or revoked. However, in essence, failure to comply with the undertakings, conditions or foundation of the licence are the core reasons.

National Highways in England (or its equivalent in Scotland, Wales or Northern Ireland) or the local authorities maintain the road infrastructure in the UK, depending on the nature of the road.

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There are few toll road concessions in the UK. The pricing is per road and per organisation. Thankfully, there are very few such schemes – they are generally for tunnels or bridges, as well as the M6 Toll Birmingham by-pass.

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The European procurement rules apply to public transport and infrastructure contracts in the UK, and public procurement has to follow specific protocols under those rules.

Competitive tenders are mandatory except in de minimis matters or emergencies. The procedures vary hugely depending on what is being tendered or franchised, with each local authority developing its own system.

Criteria typically applied in awarding concessions or operating contracts relate to:

• price;
• quality of service;
• decarbonisation measures and ESG; and
• the compliance status of an operator, for instance, poor compliance history.

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Operators can challenge unsuccessful procurement outcomes, but generally only under judicial review. This is often expensive and time-intensive.

There are a number of specific funding schemes available to support decarbonisation projects within the transport sector. One example is the ZEBRA (Zero Emission Bus Regional Areas) programme, which provides financial support for the acquisition of zero-emission buses and the associated infrastructure required to operate them, such as charging facilities. In general, however, private enterprise funds its own infrastructure.

Commercial vehicle fleets are typically financed through independent finance or manufacturer finance.

Operators from both the heavy goods and bus sectors use a range of finance options to run their vehicles, ranging from cash purchases to lease arrangements to hire purchase.

There are green funding schemes financed by government such as the ZEBRA programme, as mentioned in 6.1 Infrastructure Financing. Funding schemes, however, are far less common in the haulage sector.

We are not aware of any guarantees or availability-based payment models.

As with all sectors, the Competition and Markets Authority observes significant consolidation events and investigates accordingly.

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Regulators in the transport sector do not have a specific jurisdiction on this.

In relation to heavy goods vehicles, emissions standards are the same as those across Europe. The current standard is Euro 6; Euro 7 is due to be launched by the end of 2026.

In the haulage sector, there are incentives to encourage the adoption of electric vehicles. For example, many urban areas operate Clean Air Zones (CAZs), where emissions charges apply to higher-emission vehicles, while qualifying zero-emission vehicles are exempt from these charges. In addition, some private-sector organisations and supply chains have introduced procurement policies or contractual requirements that encourage or require the use of low- or zero-emission fleets.

At present, we are not aware of any nationwide funding scheme specifically supporting the purchase of low- or zero-emission vehicles in the haulage sector comparable to those available for buses.

As alluded to earlier, however, in the bus sector, a number of funding programmes are available to support both the acquisition of zero-emission buses and the associated infrastructure required to operate them. These schemes are primarily focused on electrification and include initiatives such as the ZEBRA programme.

Which environmental approvals are required for infrastructure development is dependent on the nature, scale and location of the proposed works. In general, the relevant planning permissions and environmental consents required under planning legislation must be obtained. Furthermore, approval from the relevant electricity network operator or distribution network operator will be required where a new or upgraded electricity connection is required, along with any technical assessments.

On larger-scale contracts, both privately and government based, ESG and other carbon metrics are disclosable as part of a tender process.

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For breach of environmental laws, the fines are unlimited.

For the haulage sector, the safety frameworks governing road transportation are:

• the government’s “Securing loads on HGVs and goods vehicles” guidance; and
• the Health and Safety at Work etc. Act 1974.

For the safe operation of vehicles on the road, the governing framework is set out in the Road Vehicles (Construction and Use) Regulations 1986, as enforced by bodies such as the police, the Driver and Vehicle Standards Agency (DVSA) and the Health and Safety Executive (HSE).

The police, HSE and/or DVSA investigate major accidents or incidents.

When an accident occurs, operators are required to stop, report the matter to the police and, in many circumstances, also report the accident to the DVSA. The operator may also be obliged to report the accident directly to the Office of the Traffic Commissioner.

Vehicles operated in a fleet must be maintained in a roadworthy condition and comply with the Road Vehicles (Construction and Use) Regulations 1986. Where applicable, they must also hold a valid MoT certificate. In the case of buses and coaches, a new vehicle, or a vehicle that has been substantially modified, must obtain a Certificate of Initial Fitness, or an equivalent approval under the relevant vehicle approval regime, before it can be used in service. The certificate is issued by the DVSA following inspection, although the application process is typically undertaken by the vehicle manufacturer or body builder before the vehicle is delivered to the operator.

The transportation of hazardous materials by road is regulated by the UN Agreement concerning the International Carriage of Dangerous Goods by Road (ADR).

All vehicles used on the highway must have an appropriate certificate of insurance ensuring both the vehicle and driver meet the legal obligations to insure against third-party risk.

There are no labour laws specific to transport workers.

Sector-wide collective agreements are not common, but employer-wide collective agreements are common in large organisations.

From an employment perspective, the same employment protections apply when concessions change hands.

There are specific rules governing driver hours and working time. These are the Road Transport (Working Time) Regulations 2005 and the assimilated tachograph rules, as well as the domestic hours rules and working time regulations. For coach operators going into Europe or hauliers and other operators going beyond Europe, there is also the European Agreement Concerning the Work of Crews of Vehicles Engaged in International Road Transport (AETR).

With regard to the road transport sector, there is a driver shortage; hence, wages have increased significantly within the last five years. The adverse consequence of this is that drivers who historically might have not been considered adequate are now being given opportunities to drive, which potentially creates high risk. This applies across the board in the bus, coach and haulage sectors.

Strikes and other industrial actions in essential transport services are regulated in exactly the same way as all businesses. 

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With respect to interoperability standards, the UK meets the European standards and they are repeated in the Road Vehicles (Construction and Use) Regulations 1986.

In terms of repossession rights for leased vehicles, this is a contractual obligation, and the lessor is entitled to repossess under the contract if the lessee is in breach. 

For road transport operators, whether they operate heavy goods vehicles (HGVs), Public Service Vehicles (PSVs) or Passenger Carrying Vehicles (PCVs), guidance regarding what is expected can be found in a DVSA publication titled “Guide to maintaining roadworthiness”. Vehicle inspection frequencies are dependent on usage, mileage and age. 

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There is no regulation of digital freight platforms.

Standard GDPR regulations apply to operational data. There are no specific laws or obligations other than those either submitted to contractually or under the GDPR rules.

There are currently no cybersecurity requirements in the road transport sector; however, best practice is that operators have robust cybersecurity measures and systems in place. A large, well-known haulier had to cease trading due to a cyber attack as the financial hit was unsurvivable.

AI-driven traffic management is not regulated as far as we are aware.

All operators own their own data; however, there will be occasions where contractually, the customer also owns the data. In the bus sector and occasionally the coach sector, the local authority will own all of the data, and for rail replacement services, Network Rail will own the data.

CMR agreements apply with regard to international transport.

As far as we are aware, there are no restrictions on foreign investment in ground transport infrastructure.

In terms of sanctions regimes and cross-border transport operations, Border Force identifies breaches by inspection of import and export documentation.

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Transport-related disputes are heard in civil courts across England and Wales. Depending on the nature, complexity and financial value of the claim, proceedings may be brought in either the County Court or the High Court.

Arbitration clauses are common in concession, access and procurement agreements.

Regulatory decisions or fines can be challenged in the Upper Tribunal and then in the Court of Appeal and, ultimately, the Supreme Court.

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Contractual claims and tort claims have a limitation period of six years from the date of breach and/or loss. Personal injury claims have a shorter limitation period of three years from the date of accident or the date of knowledge of the injury. For injury suffered whilst under the age of 18, claims must be brought within three years of the claimant’s 18th birthday – ie, by their 21st birthday. Mass tort claims are permitted within our jurisdiction, although they are not common.

The operator of an autonomous vehicle will always be legally responsible for its operation. However, in the absence of a human driver, determining accountability for an incident or accident may be more complex. Unlike conventionally driven vehicles, where the driver is typically responsible for the safe operation and condition of the vehicle, autonomous vehicles may give rise to the question of where liability rests – with the operator, manufacturer, software developer, maintenance provider or another party. This presents legal challenges and is an area likely to evolve in discussion and debate in the coming years.

Hydrogen is potentially a very important fuel for the haulage and coach sectors in a future which increasingly targets zero carbon dioxide emissions.

Hydrogen is, however, currently subject to different regulatory controls from other fuels, and in spite of strong advocacy from powerful supporters, currently its use as a vehicle fuel is in its infancy in the UK. Furthermore, availability of hydrogen as a fuel is challenging in 2026; it does not benefit from the infrastructure advantages that diesel and electricity have.

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Congestion pricing, low-emission zones or urban access restrictions are regulated by the local authority, which has the power to propose and implement such measures.