Richard North, 01/10/2021  

I thought I might get away from crisis mode for a day or two, and blog about something really interesting, like hedge trimming or shoe polishing. But an article in the Irish Times brings me screeching back into the fray to continue the saga of HGV driver shortages.

The article in question is headed, "Lorry driver shortage 'an imminent national emergency' in Ireland", with the sub-heading retailing familiar woes: "Industry struggling with exodus of foreign truckers and inability to attract young staff".

There is, it appears, a shortage of 3,000-4,000 lorry drivers in the Republic of Ireland, which has put haulage firms under pressure to keep trucks on the road, amid severe disruptions to the global supply chain as a result of the Covid-19 pandemic, exacerbated in western Europe by new post-Brexit border requirements.

The problem is a familiar one of ageing drivers which, the paper say, "has long been flagged". It refers to a future skills report as far back as 2015, which forecast a demand for just under 7,000 HGV drivers to last year. A follow-up report, in 2018, addressing skills shortages linked to Brexit, said this statistic was "a cause for concern, requiring urgent attention".

The pinch is being felt now, we are told, because many eastern European drivers have not returned from extended summer holidays, having found alternative work in Poland's soaring economy. Haulage firms which would normally have drivers on file are finding that there are no applicants for vacancies.

This brings in Eugene Drennan, president of the Irish Road Haulage Association. He says that the [Irish] Government needs to treat the shortage as "an imminent national emergency" or else face similar supply chain shortages to those experienced in the UK.

Nikolaos Valantasis Kanellos, lecturer in logistics at Technological University Dublin, says the shortage of drivers in Ireland may seem minor compared with the UK, but the State's reliance on road transportation, which accounts for 99 percent of goods distributed, makes the problem equally challenging.

Then we get Aidan Flynn, general manager of the Freight Transport Association Ireland. He says that lorry driving has become an unattractive job for a variety of reasons: poor pay and career prospects, long hours on the road, unfavourable conditions, tight and stressful delivery windows, and high insurance premiums for young drivers, who see better work options elsewhere.

Since Brexit, border checks and red tape have added to the woes of the driver on the UK "land bridge", whereas avoiding it means long ferry journeys on the direct routes to Europe. With few young drivers entering the industry, the average age has remained stubbornly high, in the 50s.

John Nolan, of Nolan Transport, illustrates the problem. "No new blood came in, and the old blood have retired", he says. At one stage, his company – one of the largest in the country - was "down 100 drivers" out of a full complement of 450. He sees the shortages continuing for the next two to three years and costs in his business rising as a result. Nolan is having to hike pay by 20 per cent to retain his drivers.

Further input comes from Paddy Neary (65), from Co Louth, who has been driving lorries for many years. "In Ireland", he says, "most young people are highly educated and just don’t want to do it". And there is a Brexit dimension. Before the UK left the EU, "you hopped on a ferry and drove through the UK. Now you go out on direct boats that take much longer – 26, 27 hours is normal. Many young men have given up. They just couldn't be bothered".

Here, in this article it's fascinating to see the reference to the "future skills report as far back as 2015", and the follow-up report in 2018, flagging up the shortages as "a cause for concern, requiring urgent attention". The 2015 reference harps back to my Wednesday piece, and the concern at "too heavy a reliance on drivers from Eastern Europe".

From 2015, we also have another piece from The Loadstar, headed: "Treat drivers better and we may solve shortage, say bullish transport bosses".

This has Graham Short, managing director of Walkers Transport, complain that "the recruitment of younger drivers remains one of the company’s principal challenges, despite the fact that wages are on the increase as firms try to establish a continued supply of younger drivers into their businesses".

"The money is certainly available – a young driver can look to earn £25,000 a year with class 1 licence", Short said at the time, "but there isn't a great deal of joined-up thinking in the sector". An example he gave was that end customers and major suppliers showed "relatively little flexibility in helping hauliers and insurance premiums for younger drivers continue to rise".

Mike Farrall, chairman of Farrall's Transport, agreed that it was not simply a question of pay, but also the way drivers were perceived by society. "It's not about the money", he said.

"Good rates are being offered across the industry, but I believe the problem is more closely related to the way drivers are regarded and treated", he added. He also warned that the exponential growth of e-commerce retailing, and the huge pressure that would place on the supply chain, would further accentuate the pressures on drivers.

Nevertheless, even with my report yesterday referring to the shortage of HGV drivers in Italy, there are still those who want to put the problem in the UK down to Brexit. After all, it is said, only in the UK do we see reports of empty shelves in the supermarkets.

Yet we have Eugene Drennan, president of the Irish Road Haulage Association, warning that the Republic could face similar supply chain shortages to those experienced in the UK. In that respect, the UK is simply ahead of the field – but not in a happy way.

In fact, there are very specific reasons why supermarkets in the UK should be hit harder and earlier than continental operations – for reasons which have little to do with Brexit. Quite simply, the retail structure in the UK is very different to that on the continent, and more vulnerable to disruption.

Accurate and recent information on retail structures, Europe-wide, is difficult to get hold of, but illustrated above is a graph taken from work produced for the European Commission. Although seven years old, it still has validity.

The key thing shown is that the UK has fewer supermarkets per capita than any other country in Europe – and fewer even than the United States. And also signalled is a remarkable concentration of retail outlets at the larger end of the spectrum.

On the other hand, there are indications that larger stores are more popular with consumers in the UK, compared with some other European countries. And almost half of all Brits (48 percent) visit supermarkets weekly, choosing to do a big shop to see them through the week.

Another piece of the jigsaw indicates that per capita retail sales area in the UK is substantially lower in the UK than in countries such as Germany, Belgium and France – plus many more. Then, on top of that, UK supermarkets carry less stock, with greater reliance on just-in-time systems.

Broadly, this suggests that a very different retail pattern applies to the UK: more of us shop in fewer, larger supermarkets, where throughput is higher, demanding more frequent replenishment. It thus follows that the UK supermarket system is under far greater pressure, and far more likely to suffer stock shortfalls if the transport system is disrupted.

And there is now far too much evidence to ignore that the driver shortage was a crisis waiting to happen, and – in the absence of remedial measures – was going to happen with or without Brexit.

In one sense, the cause of the crisis has been heavily influenced by our membership of the EU, which has enabled hauliers to rely on the crutch of imported labour, to solve short-term problems.

But, as Ireland is finding out, this was only a temporary fix which actually made the overall situation worse. It obscured the extent of the structural problems in the industry and delayed the implementation of longer-term solutions.

According to this report, the Driver Require Think Tank estimates that the actual shortfall is at the most 70,000 and probably lower.

It has dismissed claims that an exodus of EU drivers caused the shortage, claiming these drivers only account for 18 percent of the required staff. It added that the pandemic led to 70,000 people leaving the workforce, bringing numbers from 300,000 pre-pandemic to 230,000. Of these only 12,500 were EU nationals, most of whom it believes were under the age of 45.

"We believe the 55,000, predominantly British, over-45s left mainly in Q1 2021 when demand fell off", it says. "During this period many were self-isolating or furloughed and may have realised they preferred other options to driving for a living".

To that extent, Brexit – and the Covid pandemic - have simply highlighted the problem and, at most, created some additional stresses which have influenced the timing and intensity. Thus, which we cannot say that the crisis has nothing to do with Brexit, no rational person could argue that it was caused by it.

That, of course, will not stop some people trying.

Also published on Turbulent Times.

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