Parliamentary Select Committees usually produce well reasoned and useful reports to guide policy. The latest Transport Select Committees report into supply chain problems is anything but well reasoned.
London, UK: The Parliamentary Transport Select Committee report, published in 1 June, lays the blame for the logistics crisis firmly at the door or logistics companies, suggesting that it they which should build trucks stops and driver rest facilities.
The Chair of the Transport Committee, Huw Merriman MP said: “We urge Government to be brave and force the sector to get its house in order. A Supply Chain Levy has worked previously to incentivise reform. If the industry won’t deliver change, Government should do so and send them the bill via increased taxes to those who produce and sell and make the most profits. This must be accompanied by minimum standards for planning, facilities and employers’ treatment of HGV drivers and seafarers. It’s the least we can ask for those who work so hard to deliver our goods to us.
He then repeats the nonsensical claim that: “The long-term solution lies in moving more freight to rail and water.” This is palpable nonsense: Not only is railway use geared towards passenger transport but doubling rail freight would deal with less than a year’s growth of road freight. Research into shits to water as a mode of freight transport, conducted by Frank Worsford, then at a senior research fellow at University of Westminster, clearly demonstrated the extremely limited scope water borne freight could make.
Why is it that the same trite and demonstrably wrong statements are repeatedly made by those who should know better?
“We’ve been here before. In 2016, the Transport Committee called for action in the haulage sector but little changed,” Merriman said. “Lack of diversity is holding expansion in the workforce back. Women make up as little as one per cent of the workforce. The proportion of under-25s is under three per cent. For too long, this lack of diversity has seen more drivers retiring than being recruited.
“The pandemic turned a chronic problem of a lack of HGV drivers into an acute one. Yet again, the Government had to step in to shore up a private sector which failed to mend its fragile roof in sunnier times. The industry needs an expensive incentive to fix its problems rather than expect the Government, and taxpayer, to step in when we inevitably encounter the next crisis. The dire alternative is that drivers will go elsewhere and the essential goods we take for granted will be in short supply.” The fact that shops did not run out of goods, that shelves remained well stocked (Brexit induced shortages excepted) is not mentioned by Merriman.
The problems of an ageing workforce are not confined to logistics, almost every sector of the British economy is facing the same problem made worse by ludicrous government policies to thwart immigration.
The report ignores years of campaigning by the Road Haulage Association and other industry bodies for more and better truck parking and driver facilities. Indeed, it is often the customers of logistics companies which are the worse offenders denying truck drivers even the most basic of facilities at delivery points, including use of toilets or washing facilities.
Richard Smith, managing director of the RHA said: “We welcome the recognition of the difficulties of life as an HGV driver. In many places HGVs and their drivers are simply not welcome. “This needs to change. We welcome measures that will improve HGV drivers’ experiences on the nation’s roads and the way they’re treated.”
Road transport industry groups have, not surprisingly, slated the Transport Select Committee’s report into supply chain problems as misguided and just plain wrong. The report is “an attempt to blame the industry for supply chain problems,” says Logistics UK. Shane Brennan, chief executive, Cold Chain Federation said: “It is a shame that despite the many good insights and testimony gathered for the report, that the headline recommendation is so poorly conceived and unnecessarily divisive.
Blame for the issues faced by the sector has been unfairly placed at the industry’s door said David Wells, chief executive, Logistics UK. “Logistics workers are the unsung heroes of the Covid-19 pandemic, keeping shops, schools, hospitals and locked-down families supplied with all the goods and medicines the country needed,” he said.
“To place all the blame for the supply chain issues facing our industry at our door does our workers a great disservice, and totally ignores the role which the government and other agencies have played in creating staff recruitment and retention problems across the sector,” Wells said.
“Despite operating on incredibly narrow margins – often of less than 1% – our sector has already made significant investment in the next generation of workers through the Apprenticeship Levy with £700m paid in by our industry to date. However, due to a lack of appropriate qualifications for the sector, which did not even exist until 2021, only £150 million has been able to be drawn down thus far, representing a tax on our sector and a huge, missed opportunity for recruitment,” Wells said.
“It is also a national disgrace that thousands of HGV drivers, who have worked so tirelessly to protect the supply chain during the pandemic, are still unable to access suitable safe and secure truck stops across the country, with many forced to take their legally mandated rest breaks on the side of roads, something which Logistics UK has campaigned on for many years.”
However, it is not the industry’s responsibility to build and run these facilities, not least because they are commercial enterprises, many of which cater for all road users and not just the haulage sector, Wells said.
“The real problem that has not been resolved is local authority planning rules and red tape that prevent these facilities being built in the first place. To suggest that these new builds, which are used by all road users, could be constructed as a result of a levy on hauliers would place an unfair, disproportionate burden on the industry.
The Cold Chain Federation also rejected the proposal for a tax on haulage services describing it has a poor idea especially at a time of general inflation across supply chains, especially in food.
Wells said: “The report’s overview of the sector’s recruitment issues is confused and misleading. Like nearly every other industry in the UK, logistics is facing issues caused by a combination of factors, none of which are within its control.”
“These include an ageing workforce, the loss of European workers after Brexit and the impact of the Covid-19 pandemic on testing of new HGV drivers. The industry has already come together to create and fund a massive skills and recruitment campaign, aimed at young people, women and other under-represented groups, to attract new talent into the sector. The government is aware of this and has committed to supporting the industry’s efforts.”
“It’s disappointing that the committee has taken so long to reach the wrong conclusions and not address the real public policy issues needing urgent attention”, Wells said.Brennan said: “Last year’s driver shortage crisis was a rude awakening for our nation, demonstrating just how reliant we are on a small number of dedicated front line professionals to drive the vehicles carrying the goods that feed, clothe and generally sustain us.
Short-term fixes to solve the driver shortage crisis, like high signing on bonuses, will not be enough to retain drivers for the long term. Along with bonuses, logistics companies are also upping wages and offering training subsidies but many drivers are leaving within two years. Brennan said earlier this year, “Our job as an industry is not just to get drivers in through the door but to ensure they see this as a life-long career.” New government funding for driver training this year amounts to more than it spent on HGV driver training over the previous eight years combined.
But it is not just a shortage of truck drivers that has hit the supply chain: warehousing firms are struggling to find forklift drivers. Brexit had a huge effect forcing thousands of EU passport holders to return home; workers who made up a about a third of proportion of the warehousing industry workforce. Yet government ministers, including the prime minister, who backed Brexit so enthusiastically, consistently deny its negative effect. “If anything, warehousing has been hit harder than (truck) driving by the exodus of people from our workforce,” said Clare Bottle, chief executive of the UK Warehousing Association.
Ministers talk about “working with sector leaders to understand how we can best ease particular pinch points” and that “similar challenges are being faced by other countries around the world”. The driver shortage is not a “pinch point” – it is a major problem. And while Brexit is a factor in the labour shortage, the principal reason is demographics and the age of the workforce. It is why labour shortages, and the driver shortage in particular, have long been predicted. But the government, obsessed with its “taking control of our borders” Brexit mantra chose to ignore this.
Companies in the cold chain sector such as PML forecast the current scenario and its dire consequences almost two year’s ago, says Mike Parr, its managing director. The average age of a heavy good vehicle driver is 55, with less than 1% under the age of 25, according to the Road Haulage Association. It’s a physically demanding job with tough health requirements and annual medical examinations, which means that a lot of people are forced out before retirement age for health reasons alone.
Regardless of Brexit and Covid, the industry would be facing a driver shortage. But the problem has been masked to a large extent by drawing on EU drivers. Brexit, and the government’s obsessive determination to thwart immigration, has put paid to that. Covid has played it part too, with many driver retiring early because they were self isolating.
The Road Haulage Association’s survey of 616 hauliers, identified retiring colleagues and Brexit as topping the list the list of reasons behind the driver shortages. Respondents also cited tax changes to IR35 rules, which have made it more expensive for hauliers from elsewhere in Europe to work or be employed in the UK. And the post Brexit fall in sterling’s value has made it less attractive for EU citizens to work in the UK. Rod McKenzie, policy director ,Road Haulage Association, said that, on top of a historic shortage of drivers, the industry had lost 20,000 European drivers due to Brexit, while the pandemic had forced 40,000 driver training tests to be cancelled.
The government response has been pitiful and demonstrates a woeful lack of understanding about the problem or the nature of truck driving. In recent weeks, the Department for Transport has made it quicker for HGV drivers to get their licences, but the RHA criticised the changes as a risk to road safety. Nor does speeding up the licensing process help. The apocryphal line from driving instructors to their pupils passing their test and gain a licence is: “Well done, now that you have your licence, go and learn how to be a truck driver.”
Government minsters seem to think you can create truck drivers merely by boosting the number of examiners. They do not realise that a lot more training is needed to handle much of the ancillary equipment fitting to trucks, such cranes, tail-lifts, forklifts, fridges, as well as other loading and unloading skills, let alone how to use the tachograph. It takes time to learn how to handle the paperwork (which this government has done its best to increase) and the learn how to negotiate distribution centres and supermarkets. It all takes time, and when you are faced with loaded trucks and no drivers, time is not what you have.
The gap between the government’s ideological-driven policy and what’s plainly needed for the benefit of business and the country remains as large as ever. “Combine the HGV driver shortage, the customs clearance issues and the impact of the pandemic and it is plain to see that the country is destined to be facing some very challenging conditions,” Parr says. “Surely the government should have seen some of this coming and prepared for these problems? The approach taken by the powers that be seems to be very much reactive rather than proactive – if I ran my business in this way, we would have gone bust.
“The fact is, there should be a long-term strategy in place to deal with all of these concerns,” Parr says.
It is not clear what the Select Committee’s report authors believe can be achieved in the two year deadline they have set, Bennan said. “This will be achieved through open, committed partnership focused on common goals not seeking to single out blame, set arbitrary deadlines and make threats of punitive taxes.”
The Road Haulage Association has been more welcoming of the report broadly welcoming it and supporting its recommendations although cautioning against another tax on the industry.
“Whilst we support many of the Government’s 33 measures to deal with the HGV driver shortage, as the report highlights, many of these are limited, temporary measures and the systemic issues affecting the industry require long-term planning,” the association said in a statement.
“The report rightly identifies that the voice of the SME needs to be heard more clearly in government to find the right solutions to our long-term problems; most hauliers are SME.”
“With firms facing huge financial pressures it’s unreasonable for the logistics sector to fund driver training alone, given the significant upfront cost, the acute shortage of drivers and the difficulties in retaining new drivers due to external factors.
“We’re pleased the report recommends making HGV skills bootcamps a permanent feature and making greater use of Apprenticeship Levy funds. This is something we’ve repeatedly called for.
“We appreciate the principles behind the Supply Chain Levy, but we need assurance that this would not result in undue cost pressures or limit the growth of SME hauliers.
“We’re concerned that the industry cannot make the necessary changes to avoid the levy in just two years when so many of those changes are outside of the industry’s control.
“We oppose any measure which risks significant additional cost on SMEs.
In marked contrast to the associations, industry trade union Unite, welcomed the report saying: “the industry can no longer drag its heels on the need to tackle driver shortages, poor pay and a lack of decent on the road facilities that are causing workers to walk away from the sector.”
In a somewhat simplistic analysis, the union accuses the industry of profiteering at driver’s expense.
Unite general secretary Sharon Graham said: “The logistics giants need to stop hoarding the profits and start investing in the workforce.”
Unite national officer for the road transport sector, Adrian Jones, said: “Unite has been very clear that the sector must pay better and stop waiting for someone else to invest in lorry park rest facilities. As this report reaffirms, the troubles in the sector are the fault of the employers.
