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Over the past few weeks, a lot of attention has fallen upon the situation in the United Kingdom (UK), as the country battles unprecedented driver shortages. For the past couple of weeks, multiple media outlets have reported about the current situation in the UK related to the truck drivers’ shortage and the consequences of that shortage across the supply chain for various businesses. Recently, the local government on the island announced that it would issue 5,000 short-term visas to drivers from outside the UK to fill the shortages. What does this mean for the UK and the European logistics industry?
While under normal circumstances, we, as an industry, have managed to plan and execute across the seasonal peaks without critical product supply problems, the current situation showcased that this is no longer possible, as driver shortages are straining supply chains in Europe and the United Kingdom. However, the current situation in terms of constraints in the supply chain and product supply problems has been in the making for quite some time.
The perfect storm of issues
The UK is currently being hit disproportionally hard by the issues, this is in part due to still lingering Brexit Implications, around legislation and borders, but the problem is global and there are several factors at play. We have come out of a situation in the early 2010s where it was much easier to acquire hardware and hire drivers, a case no longer relevant as the calendar flipped to 2020 and 2021.
The depth of the crisis has only been highlighted by the fuel shortages around fuel stations in the country. While refineries and storage centers have plenty of fuel, petrol stations have been running dry, as there are not enough drivers to ensure the supply of that fuel from storage centers to the final consumer. While the newly-introduced visa measures could help the UK in the short-term, the issue will go way beyond Christmas, as the current driver shortage is affecting operators all across Europe.
“Today, global supply chains are in a never seen before disarray and while, e.g. McDonald’s and most grocery stores can operate without a few parts or products, factories most often must stop production even if a small part is missing,” says Jens Romer Sode, the Chief Operating Officer (COO) of the Scandinavian Business Unit at Girteka Logistics.
In the new reality of the road freight transport sector, which could last well into 2022, we could see a real shortage of people and capacity, especially trucks and trailers across most supply chains and markets, including the UK.
As a result, significant increases in operating costs have been exhibited in the market, such as growing fuel and ferry ticket prices throughout 2021, something that should continue into 2022. Despite the lack of capacity and rising operating costs, the demand for transportation is outpacing the supply (namely capacity) that companies can provide.
“The industry will have to adjust to higher prices for road transportation, which should trickle down across the supply chain to the final consumer,” points out the COO at the logistics company.
After all, trucking is an essential part of global supply chains as nearly every item a consumer or a business utilizes was brought onto a shelf by a truck.
Fragmented market
Since the European trucking industry is very fragmented, with more than 90% of companies owning less than 10 trucks, these companies can run on low profit margins. With the UK leaving the EU and making it much harder to cross the border between the two, such operators have stayed away from crossing the Channel and instead stayed in mainland Europe on trips that are better paid. The problem was worsened by the fact that since Brexit, many drivers with European passports have left the country to drive trucks elsewhere, be it Germany or any other country within the EU.
“However, Girteka Logistics remains 100% committed to servicing its UK customers, and the UK is as an integral part of the company’s overall European network and future growth plans,” notes Sode.
To draw a conclusion:
The Driver shortage is caused by a number of factors – the main reasons being:
- The trucking industry continues to restore capacity to pre-Covid levels, and as new trucks join companies’ fleets, more drivers are needed. In addition, as a result of the EU mobility package more drivers per truck are needed due to resting and home trips rules;
- The main challenge and goal needs to be to improve driver facilities and working conditions, as driver salaries are not the only factor influencing people’s decisions to either join or to leave the industry;
- Older & experienced drivers are retiring, while trucking is not a very popular industry amongst the younger generation, and we have to improve the image and the reputation of the industry and the profession;
Girteka Logistics’ employment plans are very comprehensive and part of how we plan the deployment of our fleet and operate every single day. In total, we employ approximately 15K drivers across the Girteka Group business.
- As Europe’s biggest international trucking company we are looking to employ over 7,000 new drivers in the EU throughout 2021, as we look to continue the growth of our business, keeping in mind a natural turnover of employees;
- In addition, we provide training courses to our colleague drivers to make sure they are up to date with the latest developments in the industry;
On average, it takes between two and four weeks to integrate a new driver into the daily operations of Girteka Logistics. Hiring over 7,000 new drivers annually not only to continue growing but to also compensate for the natural turnover of employees is no easy task, as we must ensure that our drivers feel that they are compensated well, as well as that they feel safe and comfortable behind the wheel. Thus, the driver shortage is not a question of the pay that drivers receive – while that is a very important factor – rather, it is a question of how safe, comfortable and stress-free their daily jobs are.
