The acute driver shortage in the UK has taken a toll on the manufacturing, and retail industry. Brexit is somewhat responsible for the shortage of HGV drivers while the Covid-19 further delayed the influx of new drivers from other European countries. Moreover, the shortage of nearly 400,000 HGV drivers across Europe is putting tremendous pressure on the European logistics industry. As per a survey by the Road Haulage Association (RHA) Britain has a shortage of over 100,000 truck drivers. Read on to find out the details of this pressing problem and the steps being taken to address it.
Impact of driver shortage on the logistics industry: What led to the driver shortage in the UK?
Presently, there is a shortage of HGV drivers all over the content but the Brexit situation has made things worse in Britain. A large number of truck drivers from all over Europe went back to their own countries during the pandemic. However, now they are unable to return to the UK because of Brexit. In the pre-Brexit times, they were free to come and go out of the UK. However, that is not longer the scenario. Additionally, the fall of the value of the pound against the euro is not motivating EU nationals to move to the UK for a living.
The pressure on the logistics industry was already there even before the UK started imposing checks on items coming from the European nations. Presently, the arrival of goods has been delayed indefinitely. Since most drivers get paid by the distance travelled instead of the time on duty, delays are affecting their income. This is yet another reason behind the driver shortage.
The pandemic is certainly a contributing factor. The lockdown and travel restrictions and the overall slack in the economy prompted a large number of drivers to leave Britain for their homes. Most of them have still not returned. Furthermore, the Covid-19 also led to a huge backlog in HGV driver tests. As a result, recruiting new drivers is becoming a problem. Back in June 2020, the logistics industry warned that there was a shortage of 25,000 candidates passing their driving test as compared to 2019. Moreover, the pandemic disrupted the truck driver training courses which also added to the shortage.
The tax changes in the UK such as the reform of IR35 rules have further complicated the situation. Right now, drivers from other European countries find it more expensive to work in the UK.
Impact of the driver shortage
Nevertheless, the oil companies and the government bodies have reassured that there is sufficient stock of fuel and there is no reason to panic yet. However, because of the driver shortage, there is no one to move the oil from the refineries to the petrol pumps. The crisis is also taking a toll on the health industry. Care workers and ambulances are not able to function normally because of the long queues for fuel.
British Petroleum had to shut down several of its outlets because of the driver shortages. Other oil companies like Shell, Esso, and ExxonMobil are also facing similar problems. EG Group for instance imposed a buying limit of 30 pounds per customer because of the unforeseen demand and panic buying.
Supply chain crisis
The retailers are dealing with serious disruptions to their supplies. This has become all the more worrying since the Christmas season is approaching and shoppers are out to do their holiday shopping. Simply, put, the driver shortage now has palpable and almost devastating consequences on the supply chains. There are talks that at least one of five deliveries might not reach the retail stores on time.
Proposals from the business sector
The ongoing shortage of drivers is adversely impacting the logistics and retail sector- two of the largest business bodies in the country. The British Retail Consortium and Logistics UK have urged the Department for Business, Energy, and Industrial Strategy to outline the steps the authorities should take to tackle the problem. Moreover, these two groups that make up over 23,000 members across the UK, think that the crisis is going to deepen in the near future. This is because the reopening of offices and the build-up to the holiday season will consist of a busy time for the logistics industry.
The British Retail Consortium and Logistics UK have requested DVSA to increase its testing capacity. This will allow the agency to cope with the test backlog that is not allowing thousands of HGV drivers to start working. Additionally, they have urged the government to consider providing temporary work visas to drivers from European countries. These drivers can help to create a short-term workforce till the government resolves the driving test backlog. They are also suggesting a reformation of the National Skill Fund for funding the training of truck drivers.
What the government is going to do to manage the crisis
Following the repeated demands from the logistics companies, the government has decided to allow up to 5000 drivers to Britain on short-term visas. These drivers will be allowed to work in Britain for 3 months till Christmas. To quote the British Transport Minister, “After a very difficult 18 months, I know how important this Christmas is for all of us and that’s why we’re taking these steps at the earliest opportunity to ensure preparations remain on track.
This will provide much-needed short-term relief for the retail sector. Britain’s Transport Department is also sending letters to licensed truck drivers in the UK who are presently not working. They will be appealed to resume working and contribute to averting the crisis. Additionally, the authorities are also issuing 5,500 visas for poultry labour to reduce the strain on the food industry.
The crisis has taken such a menacing form that the government is considering the deployment of the military for driving trucks. Kwasi Kwarteng, the British business secretary is temporarily exempting the oil companies from the competition regulating laws. They will now be free to share data for optimizing fuel supplies at the gas stations.
Even after the formal announcement of these plans, the Chief of the European Road Haulers Association commented that a temporary relaxation of immigrant laws isn’t enough. In his words, “There is a driver shortage across Europe…I am not sure how many would want to go to the UK.” He explains that wages in other European countries are higher than in Britain. Moreover, the new EU laws have enhanced work conditions. For this reason, European drivers might not be tempted to move to the UK where wages are low and there is the additional problem of customs and border checks.