HGV Driver Shortage – Risks & Threats to the Haulage & Logistics Industry
If you are a business owner or a policyholder and you work in the haulage & logistics industry, you may want to amend your policy to match the risks happening in the industry at the moment, one of these risks is the lorry driver shortage.
Several companies around the United Kingdom have complained about not having enough lorry drivers, which as a result has created shortages for some products. As you can imagine this has caused concern within certain industries. The combination of Covid, Brexit and other factors, means that there aren’t enough drivers to meet the demands of the industry.
Some of the most famous companies that have been affected by this include Morrisons who have warned that the driver shortage could push up prices, Wetherspoons who have said that they have run out of particular beer brands, Brewers such as Heineken and Molson Coors have also been affected by the shortage.
Other famous brands who have been affected include Coca Cola, Nandos, Haribo, BP and Iceland. A recent report has also found that transport delays between April and June of this year have resulted in shortages in items such as furniture, electrical equipment and car parts.
The construction industry has also been affected with materials such as cement and timber being hard to come by too.
There are more than 100,000 drivers in the United Kingdom, out of a pre-pandemic total of 600,000, there was a shortage even before the pandemic and unfortunately, these numbers keep increasing.
COVID-19 is, of course, a huge factor to this as travel restrictions were put in place EU drivers went back to their homes and as driving tests were suspended, there were less and less new drivers ready to apply for the jobs available.
As well as this there is Brexit to think about too. HGV driver shortages across Europe, but the UK has been the hardest hit by the problem. This was because many European drivers went back to their home countries, or dedicated themselves to work elsewhere.
What Is Being Done About The Shortages?
Now you know all the facts it’s important to know what is happening about it. The Government has slightly relaxed the Drivers’ Hours rules, which means drivers will be able to increase their daily driving limit from 9 to 11 hours twice a week.
The Government is also expected to announce changes to the HGV driver testing process to get newly qualified people into the haulage industry as well as announcing that £7,000 will be given as funding for the Large Goods Vehicle Driver apprenticeship scheme.
Individual businesses have also increased wages and offered other bonuses for drivers including Tesco, Aldi & Waitrose. This has taken the average page from a little over £30,000 a year to almost £37,000 and some employers are willing to pay more.
A Case Study: Morrisons
Morrisons has said that the company expects the UK lorry driver shortage to push up prices from this year. The lack of lorry drivers plus higher freight charges and commodity prices could lead to higher prices. A lot of supermarket chains have called on help from EU workers, however, the Transport Secretary has said that the UK must stand on its own two feet and not rely on EU workers.
Shortages in lorry drivers have been blamed on EU workers leaving the UK due to as mentioned above COVID and Brexit. Mr Shapp has said that the shortages have nothing to do with Brexit and the main reason is COVID.
Morrisons and its rivals due to this shortage have seen a loss in stock and therefore empty shelves and there have been calls for the Government to do more about the shortages.
Chief executive David Potts indicated that HGV drivers should be eligible for Skilled Worker visas, allowing them to work in the UK. Morrisons have also said that the British food industry was facing continued challenges with COVID-19 which were largely out of its control.
“We will seek to mitigate these and other potential cost increases, such as any incurred to maintain good on-shelf availability.”
Morrisons are expecting industry-wide retail price inflation driven by sustained recent commodity price increases and freight inflation and the current shortage of HGV drivers.
A Case Study: Schools
School meals have been said to be at risk due to delays and shortages in food supplies across the country and due to a lack of HGV drivers in the UK. Industry representatives told Borris Johnson that the driver shortage due to COVID and Brexit was causing a crisis in the food supply chain.
City councils have warned schools that they may have to rely on emergency ingredients such as pasta to feed students. School chefs would be supplied with two weeks worth of ingredients in case the supply chain were to fail. Schools reacted by saying the Government needed to do more to help the supply chain. This was one of the reasons the drivers ‘ hours were relaxed as mentioned above.
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The UK recovery post-pandemic is said to remain bumpy as the industry reacts to the 0.1% GDP increase and remains 2.1% below its pre-coronavirus pandemic levels. The main contribution to the GDP increase was due to the production output increase of 1.2%.
Coronavirus restrictions forced workers to self-isolate which contributed to the bigger than expected slowdown in economic growth. These stats came out amongst the ‘pingdemic’ with a record number of people being told to self-isolate at home after a close contact notification. This rose by more than 600,000 people a week in England.
The government eventually introduced exemptions which included food production and hauliers. The government has also said they will take the targeted interventions needed to enable businesses to keep their doors open for example placing HGV drivers on the Shortage Occupation List could make a real difference.
Supermarkets and hauliers have warned that the lorry driver shortage could push up food prices in shops, this warning comes as Christmas is around the corner. Firms across the economy also reported supply chain problems with 7% unable to get the material or staff they need in the last two weeks, due to this they were forced to switch suppliers.
How Do We Solve The HGV Driver Shortage?
There are a range of reasons why the HGV shortage is happening in the UK, which could make it difficult to solve. The average age of HGV drivers was 56 in 2018 and this number is rising. Less than 1% of drivers in the industry are under 25.
There unfortunately is a preconception that suggests that HGV drivers work long hours and are always away from home, these shifts are seen to be unaccommodating to people’s lives, especially when the majority of other industries have a flexible work from home rule since the pandemic.
Getting a HGV license can also cost upwards of £5,000 pounds which again can sound unappealing to a younger person. You will also have to carry out medical tests, theory tests, practical tests and demonstrations which can all add up. Training is too expensive to even consider the career path. Some employers won’t employ people below the age of 25 due to the insurance costs. Making the industry more flexible in terms of payments, age and training could help this shortage
Another issue within the industry is the stereotype that it’s a man’s job as a result of this only 1.2% of people in the industry and women. Many young women don’t even consider this job as it is a very male dominated industry. More than half of the population is female which means this stereotype is causing a barrier to over 50% of the population, this needs to be broken down to get more females into the industry. This can be done via education.
Brexit & COVID
Brexit and Covid saw many EU hauliers return to their home country with this estimated loss of around 60,000 HGV workers. The impact of the pandemic meant that lessons and tests could not go ahead during the various lockdowns. Due to this it is estimated that 16,000 new passes have been lost and as mentioned above with working from home becoming more popular, the HGV industry could be seen as less appealing.
The government is supplying £7,000 funding for the Large Goods Vehicle Driver apprenticeship scheme.
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HGV driver testing process
The government as mentioned above has increased the driver hours from 9 to 11 hours however they have also said this must only be used where needed and must not compromise the drivers’ safety. The government is also expected to make an announcement to the HGV driver testing process to get more newly qualified people into the industry.
The industry needs to go around inspiring young people about the potential of the industry. This could be driving days or school talks and presentations. The Road Haulage Association has said that they will struggle to solve the shortage without government intervention. Making the process of getting qualified more financially viable would be a great start to making the industry more viable and should increase the number of new drivers.
The Latest News
The Government has taken further action to help tackle the HGV driver shortage making up to 50,000 more HGV driving tests available each year thanks to a streamlined testing process as well as accelerating the entry of drivers into the UK’s haulage industry.
HGV driving tests will be overhauled meaning drivers will only need to take 1 test to drive both a rigid and articulated lorry rather than having to take 2 tests. This will make up to 20,000 more HGV driving tests available each year and means drivers will be able to gain their licence and enter the industry a lot quicker.
Tests will also be made shorter meaning more tests will be able to be carried out daily. The standard of driving required to drive an HGV will not be affected. Any driver who doesn’t demonstrate the utmost competence will not be granted a license. (Updated September 10th, 2021)
If you are a business owner or a policyholder you will need to keep up with the risks in the industry. The Government has said that they believe the problem will be solved by December this year, however, it is important to be prepared in case this doesn’t happen. Risk management is imperative and will help you and your company succeed in the future.
The UK economy relies heavily on HGV drivers and many industries such as education and retail would be stuck without them. This is how we need to advertise the industry for potential workers in the future.
As a business owner and policyholder, you may want to look at amending your policies to cover you and your business against any changes. If your business relies on HGV drivers to carry out day to day tasks and you would like advice or guidance for risk management in these uncertain times [broker_name] in [broker_county] will be able to help. Get in touch with a member of the team today on [broker_phone]. We will help keep your business thriving and adaptable to new and changing environments.