The logistics and supply chain industry has never had as much media attention as it has experienced over the past few months in the UK, unfortunately for all the wrong reasons.
Disruption to supply, rising prices, reports of empty shelves and – most recently – the fuel crisis, have shone a spotlight on the industry. Long-term structural problems have been laid bare by a perfect storm of post-Covid demand volatility, infrastructure failings, bureaucracy, Brexit and dismal pay and conditions.
Over the past few weeks, we have seen the chain restaurant Nando’s run out of chicken, automotive manufacturers run short of semiconductors and McDonald’s unable to serve milkshakes.
With catastrophic impact, media reports that oil companies have had to close some petrol stations has resulted in panic buying and massive queues.
Perhaps most evident to the public has been the shortage of drivers, which many have put down to Brexit. This, of course, is a gross over-simplification of the problem as there are many more underlying factors.
Just as important has been the impact of Covid which led to many European drivers leaving the UK, who have yet to return. Factors such as delays to HGV testing; inefficiency in processing licences; an ageing workforce and insufficient numbers of new recruits, due to working conditions and image issues of the profession, have been plaguing the industry for many years.
Research company Ti reports a shortfall of 76,000 drivers in the UK, and things are no better on mainland Europe where Ti estimates a shortage of 400,000 drivers. The most heavily impacted European countries have been Poland and Germany.
The situation has created considerable tension with industry organizations blaming the government for being responsible for the crisis.
Others have placed the responsibility firmly on the transport industry itself which they say has taken advantage of cheap labour for many years, using foreign drivers to keep costs down whilst failing to invest in training UK nationals or improving facilities.
Long waiting times at depots, the cost of training, lack of overnight truck stops, lack of basic hygiene and the general low esteem in which the profession is held, have all been cited. This came to the fore when some truck drivers during the Covid pandemic were refused access to toilet facilities when making their deliveries.
So, what can be done about the problem? The UK government has put in place an action plan which includes the following points:
The government is very keen to stress that the visa scheme is only a temporary fix. It wants to see standards and conditions in the industry rise along with pay and this will not be achieved if the industry returns to its low pay/low-cost model of using foreign labour.
One little-mentioned aspect of the driver shortage is the very low level of women employed in the sector. One estimate suggests that female drivers account for below 3% of the total number employed. Only by improving the quality of the role will women be attracted.
This not only means better facilities but also higher levels of security and this can only be achieved through a partnership between government and industry. For example, encouraging investment for more truck stops by expediting the planning process.
One HGV driver summed up the status quo, ‘Average pay of £12 per hour, abuse from supermarket RDCs and spending nights out in lay-bys with no toilet facilities has been the reward for the average HGV Driver.’ If this remains the case, then it will be impossible in the long term to attract new entrants to driving, and especially not women.
Another way of easing the driver shortage is to look towards technology to create more efficiencies. As already mentioned, a significant proportion of drivers’ time is spent waiting to be loaded or unloaded. However, there are now software packages which enable loading schedules to be more precisely managed and these will only improve as real-time visibility of truck location increases.
Automation at the loading bay can also reduce delays and transport management systems are improving the utilisation of truck capacity, meaning few trucks are needed in the first place.
The key reason why the industry has ended up in this mess is that instead of being seen as value-adding, manufacturers and retailers have always regarded transport as a cost driver.
Using cheap foreign labour has been an obvious tactic in keeping costs low. Now that this source of labour has dried up, it is evident that the profession has become unattractive to UK nationals who have plenty of other, better-paid jobs with far better conditions. It will take a massive transformation in culture to change this paradigm.
In a few months’ time, once the immediate headlines have passed and panic receded, it will be interesting to see whether industry and government remain as committed to driving forward these changes.
There would also be another indirect benefit from increasing the quality of transport. If the industry is to meet climate change targets there will have to be considerable investment in lower carbon-emitting trucks. Starving the industry of profits will not only mean that driver shortages will be a constant factor, but that many operators will be unable to ‘green’ their fleets with the latest low carbon technology.
It is time that all stakeholders in the sector – industry associations, the government, operators and shippers – throw their support behind plans to make road freight transport fit for purpose as a driver for sustainable economic growth.
Source: Kogan Page, 30 September 2021
Author: John Manners-Bell
Supply Chain Risk Management – How to Design and Manage Resilient Supply Chains
By John Manners-Bell
GLOBAL SUPPLY CHAIN INTELLIGENCE (GSCi)