20:20 hindsight is seldom helpful, but does a different narrative based upon the latest ONS data help put the current crisis in greater perspective?
Kieran Smith, CEO of DriverRequire joined our Driver Crisis discussion last week to refine a hypothesis that potentially allows us to re-think both the cause and the solution for the crisis. The latest ONS data that he and the ‘Think Tank’ that he leads have been considering, highlights that the causes of the crisis are multi-layered and EU nationals are neither the true cause, or likely to be the primary solution (panacea) as held out by some pundits and anti-Brexiteers.
Of the estimated 70,000 drivers short, EU nationals who have yet to return account for only 12,500 (with a further 5,000 seasonal drivers having already left after Christmas). So, 65% of the EU Nationals who were driving before the pandemic are already driving in the UK now. However, for those who have yet to return, Brexit restrictions may inhibit some but improving conditions and wages on the continent are likely to be a bigger reason to stay put.
The surprise statistic was the 55,000 drivers over the age of 45 who have left HGV driving as a job since 2020. The impact of Covid, whether through Furlough or lockdowns, has enabled many who work long hours in unsavoury conditions, often away from their families, to re-evaluate their options, taking roles closer to home to improve their quality of life, with minimal impact on pay.
The recent reports from drivers describing the near-thankless, yet critical, task they perform has highlighted the lack of access to decent food, facilities and treatment, coupled with minimal respect may be the cause of 90% of those qualifying to get an HGV Class 1 licence, seeking alternative employment after c. 24 months driving HGVs.
This statistic also suggests that there wasn’t a crisis in the making, but enough drivers to fulfil the required workload for most of the year, with a challenge at peak, which has been filled by foreign and British casual drivers, before dropping down to normal levels after peak. Prior to the pandemic EU nationals played an important part in responding to large fluctuations in demand, cushioning these to the tune of 30% to 50% in both directions.
Market forces, exploited by powerful buyers of these services has reduced the industry to a price-based commodity with chronic under-investment and low returns, which limps from year to year.
Only when a chronic shortage hits that cannot be solved by recruiting seasonal drivers, do we have a full-blown crisis on our hands.
The pool of available and willing drivers is finite, so raising wages and incentives are the only levers in the shortest term to entice drivers back into their cabs, despite the conditions.
The backlog of driving tests will reduce as training capacity increases, but if money is the only incentive, these new drivers will surely be seeking alternatives in the coming months, unless the conditions change – Driving is hardly an aspirational career under the current circumstances. And if we train too many drivers, we could go back to a surplus that merely re-ignites the price war.
The driver crisis, along with the additional layers of challenge caused by fuel and food inflation, staff shortages in warehouses and factories across the country and the challenges to imports from Brexit documentation and sea-freight availability, has undermined the resilience of every stage of the supply chain.
There is no clear short-term solution and it feels like it will continue to be chaotic in the next three months as rivals battle to secure enough transport to deliver their own part of Christmas.
There is however, an even greater imperative to look at improving collaboration to reduce the number of vehicles required to deliver the current demand. Our supplier network groups are actively seeking ways to reduce waste and cost by collaborating further and have identified a number of options to reduce customer deliveries without impacting inventory, improving service and cost for all concerned.
We are now looking to widen our net to engage even more suppliers to scale the results and deliver real impact within the industry. If you are seeking proactive alternatives to mitigate the effects of the crisis and are willing to work with peer suppliers, get in touch email@example.com