Exodus of EU truckers leaves UK hauliers facing acute driver shortages - it’s a story of #COVID19 #Brexit and HMRC tax reforms.

So what now?? Stay with me. /1 https://on.ft.com/3y0O3PG 

First, the problem: this is what Alex Veitch of @LogisticsUKNews and @RHARodMcKenzie of Road Haulage Association call an "acute" shortage of HGV drivers that -- as we open up from #Covid19 -- could be come a "hurricane" of shortages. Why now? /2

Well it's a triple whammy of factors:

1. Brexit/Covid (EU drivers which UK was reliant upon going home)

2. Covid. 28,000 HGV tests missed during lockdown

3. Brexit/Immigration: no legal route to recruit foreign HGV drivers /3

In round terms there are approx 300,000 HGV drivers in the UK (more people than that hold licences) but as @kieransmithuk of Driver Require Ltd tells me, approx 12k-15k went home because of Covid-19, and another 10k-15k are now leaving because of IR35 tax rule changes/4

(The industry largely welcomes IR35 change which stops drivers who only drive for one company from being 'self employed and paying little or no tax...BUT it has meant that even with wages rising, lot of EU drivers say no longer worth it, once tax status is regularised) /5

So that's the problem, but what does it mean?

Well, first already big trucking operations are struggling to cover their delivery schedules. The @TheGrocer reported last month that Spar shops in midlands getting 'capped' deliveries...so less to sell /6 https://www.thegrocer.co.uk/wholesalers/driver-shortage-leading-to-availability-issues-in-convenience-stores/655558.article#.YIp5On5TvHo.twitter

Big Cos that @FinancialTimes spoke to said that major household names (logistics and a retailer and a building supplies company) are struggling to cover loads -- no-one much notice during Jan-April because Covid suppressed demand, but as we come of May 17 lockdown, watch out/7

Paul Day, boss of @TurnersLtd tells me “Within three months, goods won’t get delivered. In fact, it’s already happening"...Lee Juniper, the operations director FreshLinci adds "t is a challenge every day to cover off the volumes" -- they were but two of many saying same thing/8

Already now companies are reporting that haulage prices/wages are starting to rise...Lee Juniper of FreshLinc says by between 10 and 30 per cent, depending on the region/type of work which ultimately will feed into prices. Paul Day warns of a looming 15-20 hike in rates /9

The government and those pro ending Freedom of Movement might cheer higher wages "that's the point!" but you always have to recall the other side of the ledger. Higher wages ultimately feeds into = high prices, which means an effective *pay cut* for purchasers /10

It also means a brake on growth and expansion...so the Spar franchisee that doesn't have enough bags of charcoal to sell over the Bank Holiday loses out on sales; bosses like Paul Day @TurnersLtd say they are taking on NO new work. So not expanding as they might /11

So what's the solution?

One idea (favoured by trucking bosses) is to put HGV drivers on the Shortage Occupation list. But ministers are clear that won't happen -- HGV drivers are too low-skilled to qualify for Skilled Worker visa, even though they earn more than £25,600 /12

And the govt is clear that this is the point...read this policy statement.

Tl;dr

- Ending EU labour imports,
- force business to adjust
- and automate where possible. /13

https://www.gov.uk/government/publications/the-uks-points-based-immigration-system-policy-statement/the-uks-points-based-immigration-system-policy-statement

Automation is some years away, so that isn't gonna help immediately

Short term, you can

a) train more drivers, but that takes time still and is expensive. @TurnersLtd has UK training scheme

b) get UK drivers with licenses back into the profession. There is a surfeit /14

The government can help -- for example as @LogisticsUKNews says, by producing grants to get younger folk on the ladder -- and also, as DVSA is doing, recruiting more examiners to push more tests through, which it is doing. But all of that won't help this summer. /15

There is also a big question over whether UK people want to do the work -- which is reasonably paid £32-£40k but not THAT much paid than a lot of jobs that don't mean 60 hour weeks, weekend working, nights away from home. UK companies aren't being over run with candidates/16

One thought that @jdportes had in chat with me was to encourage more van delivery drivers to make the step up? But that my cause another pinch-point. In short term likely impact is bottlenecks and rising prices. #Covid19 isn't going to leave huge labour pool /17

Another possibility is that EU drivers come back -- some 5m EU nationals have applied for settled status in UK, many have left, not clear how many will return post-pandemic, but govt it that statement points this cohort as giving employers flexibility /18

If stuff gets very tight, it will be an interesting test of the #Brexit mantra on labour -- Paul Day, the @TurnersLtd boss says he voted for Brexit, but not for delivery and labour shortages. About 40% of his drivers are Eastern EU where he has long-standing relationships /19

Anyways, we'll have to see how it all pans out. But this is one of many new front lines in post-Brexit, post-Covid Britain....social care, hotels, agriculture will also have to "adjust"...whether govt can meet its growth/productivity goals at same time? Tbc. ENDS