The UK is facing a shortage of 100,000 HGV drivers and as the summer holiday season gets into full swing, HGV drivers taking time off to spend with families adds even more strain to the already breaking point scenario for UK haulage.
The shortage of truck drivers is impacting industry supply chains – with warnings from companies and hauliers that they can no longer guarantee all pick-ups and deliveries.
This could lead to major supply issues. Most concerned are farmers, the construction sector and manufacturers who are reliant on a tight schedule of deliveries.
How will this affect businesses?
A Driver Retention Surcharge (DRS) is now being implemented by many container hauliers that face increased costs trying to retain and attract new drivers within the sector.
The cost of the DRS varies between hauliers and carriers, but is usually between £60 and £100 per delivery. In most cases this is effective immediately or imminently and will be reviewed every 3 months. On average we are expecting this to be a cost of around £75.00 per import container delivery and £25.00 per export container delivery.
In some cases general container transport prices are being uplifted to include the fee and in other cases the fee is identified and charged separately as a surcharge.
Longer delivery times, lack of availability and increased delivery costs could destabilise supply chains. This will affect smaller manufacturers and businesses the most, as they do not have the resources and finances to compete with larger organisations demanding deliveries and passing on costs.
We are finding container deliveries booked 3-4 weeks ahead and schedules forever changing.
How will this affect consumers?
The price of goods will go up, surcharges are being applied and drivers wages are being increased to meet demand and these costs will be passed onto the end consumer. Less deliveries will also lead to emptier shelves.
Why is there a shortage of truck drivers?
A combination of Brexit and COVID-19 are exacerbating a long-term problem with recruitment. In the UK, truck drivers are an aging workforce, the average age is 55 years old, and many drivers opted for early retirement in the last year due to the pandemic, or have left the industry in preference for jobs that allow them to spend more time with their families.
Even before COVID, the estimated shortage was about 60,000 drivers. Younger people do not want to become lorry drivers, despite the wages being higher than the UK average and jobs waiting. One of the reasons for young people not taking up a career as a lorry driver is a lack of understanding of the logistics sector. Unlike in Europe, UK schools do not include education on the logistics industry.
The pandemic has also created a large backlog in HGV driver tests, so it’s been impossible to get enough new drivers up and running.
European driver numbers working in the UK have fallen dramatically
It is estimated that 25,000 EU truck drivers have left the UK since Brexit and COVID added to the situation. As travel became more and more restricted last year, and with large parts of the economy shut down, many European drivers went home. Haulage companies say very few have returned.
HGV drivers are not on the approved list of skilled workers eligible for a special visa post Brexit so recruiting from Europe is difficult and HGV training takes many months.
When the UK was part of the single market, HGV drivers could come and go as they pleased, But the additional border bureaucracy after Brexit meant it became too much hassle for many of them to drive into and out of the UK.
Other factors for European drivers are pay – many drivers are paid by the mile or kilometre rather than by the hour, so delays cost them money, coupled with the tax changes making it more expensive for drivers from elsewhere in Europe to work or be employed in the UK.
What is being done
The UK government has made a change to the Drivers’ Hours rules, enabling drivers to increase their daily driving limit from nine hours to 11 hours twice a week. This temporary extension has been extended to 3 October. But it has been criticised as compromising safety standards and is not expected to make much difference to the problem.
Night-time deliveries are now also allowed, and the government is making more driving tests available in an effort to avoid crisis.
The Road Haulage Association (RHA) is lobbying the government to relax Brexit immigration rules to allow foreign drivers to return on a temporary basis.
Up to 2,000 military HGV drivers are reported to be on standby to help with deliveries of food and medicines.
Advice
We are concerned that there could be a potential pinch point for UK road haulage and supply chain logistics next month as workplaces re-open and schools return, coinciding with freight peak season.
Review your supply chain operation, making any changes to avoid interruption, and reforecast budgets where necessary for the next 6 months.
Contact us if you are looking for shipping and storage services, we specialise in final mile shipping solutions. Including UK and European Distribution using our own fleet of vehicles and drivers, this includes our own HGV delivery service.
We also offer secure warehousing and experienced pick and pack teams at our Kent based, Aylesford warehouse and distribution facility.
What is Peak Season and why is it important?
Starting in mid-August and continuing through October, this is the busiest time of the year for shippers and retailers. The ‘back-to-school’ season leads up to Black Friday, and retailers want products ready for the shelf as early as possible.
Generally, each year, the rise of demand makes carriers increase rates, companies increase labour costs and shippers secure capacity in advance. So preparation is important to avoid costly delays.