Capacity constraints in freight transport are spreading across much of the world and road freight is as affected as sea freight. The latest indicator of over-heating is in the UK, where retailers are complaining about a shortage of trucking capacity.
The trade association for food wholesalers in Britain has just issued a statement asserting that the “shortage of HGV delivery drivers is now critical and could threaten food supply in some areas…With the estimated 70,000 shortfall in HGV drivers, some wholesalers have had to limit the number of deliveries they make to convenience stores which has led to some availability issues”.
The road freight operators trade association, the Road Haulage Association, agrees, stating that the “HGV driver shortage has now hit catastrophic proportions”. It warns that the shortage threatens any recovery in food retailing or hospitality such as restaurants.
One of the causes of the shortage of drivers, explains the Road Haulage Association, is that the COVID-19 crisis has “resulted in the loss of about 12 months of driver training and testing ”. A further issue, nodded to by the Road Haulage Association, is that a substantial number of drivers in the UK (and indeed much of western Europe) are from various countries in central Europe. Although freight operations across international borders continue through the present crisis, it appears that the availability of central European drivers has been interrupted.
However, the real long-term problem is that truck drivers are not paid enough for what is often an unattractive job. Over the past several decades the supply of imported labour has enabled freight rates to remain at low levels in economies such as the UK, but other developed markets as well, including the US. Unsurprisingly the conditions for these low rates are changing due to limits on the movement of labour and continued increases in demand. This provides a useful opportunity to provide higher wages for those in the road freight sector. Of course, this may result in higher costs for road freight services. Yet this is also the case for rises in fuel or vehicle purchase costs. The task for both road freight service providers and purchasers of road freight services is to improve productivity to enable the management of those costs.
Source: Transport Intelligence, June 15, 2021
Author: Thomas Cullen
GLOBAL SUPPLY CHAIN INTELLIGENCE (GSCi)