To many, it might seem that efficient freight transport and taking care of the environment are incompatible objectives.

After all, the traffic produced by freight transportation damages the environment by polluting the air and creating noise. As well as undermining the quality of life in cities it also contributes to global warming.

However, freight transportation is necessary in order for us to receive products into shops for us to buy. As a result, it is necessary to find a way to have an efficient freight transportation system and to look after the environment at the same time.

Recent European legislation has made significant inroads into reducing the environmental impact of freight transportation. For instance efforts are being made to enhance the way in which different modes of transport operate together. The idea behind this is to combine modes of transport to minimise the effects on the environment for any one shipment whilst also maximizing economic efficiency.

Another example of how European governments are trying to make freight transport more environmentally friendly is the new policy introduced by the UK last year. Tony McNulty, the then transport minister, announced a new policy that was designed to reduce the impact of freight transportation on both congestion and the environment. The particular objectives of the new freight policy were to cut down on accidents, pollution and congestion caused by the UK's freight industry.

Amongst the government's plans to reduce the negative impact of the freight trade was the merger of water freight grants and the sustainable road haulage budget from April 2005.

Between 2005 and 2007 a total amount of 50.4 million will be available in rail freight grants. 2 million of this has been assigned for new applications, whilst 19.2 million will be available in road and water grants.

According to Tony McNulty,

"Current freight programmes have separate budgets and are administered separately even though they all have the same objective.

"By bringing these programmes together into one funding pot we can focus on the overall aim of promoting cleaner, safer freight transport that does not add to congestion.

"These new arrangements will provide better value for money for the taxpayer, and will ensure that the additional funding announced today to support the freight industry brings real benefits for the environment and the economy."