Read on TwitterExodus 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 ">https://on.ft.com/3y0O3PG&q...
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& #39;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
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 & #39;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& #39;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 & #39;capped& #39; 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">https://www.thegrocer.co.uk/wholesale...
Well, first already big trucking operations are struggling to cover their delivery schedules. The @TheGrocer reported last month that Spar shops in midlands getting & #39;capped& #39; 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">https://www.thegrocer.co.uk/wholesale...
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& #39;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& #39;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& #39;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& #39;t happen -- HGV drivers are too low-skilled to qualify for Skilled Worker visa, even though they earn more than £25,600 /12
One idea (favoured by trucking bosses) is to put HGV drivers on the Shortage Occupation list. But ministers are clear that won& #39;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">https://www.gov.uk/governmen...
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">https://www.gov.uk/governmen...
Automation is some years away, so that isn& #39;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
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& #39;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& #39;t mean 60 hour weeks, weekend working, nights away from home. UK companies aren& #39;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& #39;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& #39;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
