Amco - logistics for your world

How Brexit And The Pandemic Has Created The Perfect Storm

Posted on 09.07.2021

“A perfect storm” is described as an awful situation caused by a combination of unfavourable circumstances. A description that couldn’t be more relatable to the current HGV driver shortage across the UK, which has been exacerbated due to Brexit, the Pandemic, IR35 and growing consumer demands.

How AMCO Can Help Combat The Issues Caused By This Perfect Storm

You may be thinking what the point of starting this article is if we are faced with problems that can’t be solved immediately?! But, at AMCO, we are here to stay alert and put whatever remedies we can in place to help combat the crisis of such a perfect storm.

Although attracting and training new drivers is not a quick or simple fix, we believe intelligent software utilisation can make a difference.

At AMCO we can support customers throughout the ongoing supply chain disruption with our out of the box thinking and utilisation of our transport management system – Carlo.

Our transport management system allows us to use fewer vehicles to deliver more goods in fewer miles with fewer drivers. This ensures that we will have less demand for drivers now and in the future, because we are maximising our fleet’s potential allowing us to focus on working with retailers to replenish their shelves, manufacturers to get components where they need to be and OEMs, 1st tier and 2nd tier suppliers to keep lines moving.

Improving our route quality and delivery schedules allows us to minimise the need to recruit new drivers, transform performance, and maximise the utilisation and efficiency of our existing drivers and vehicles.

Combating the driver shortage is essential but is not a challenge that will be solved overnight. However, we are confident that our investment in the latest technology and onsite facilities at our bonded and BRCGS certified site AMCO Park, can go a long way in supporting our existing and future workforce. Whilst rewarding all employees with the pay they deserve for their ongoing hard work and dedication to providing logistics for your world.

Brexit and the additional disruption of the pandemic have led to the most pressure on the UK supply chain in 40 years, reducing workforce numbers and global food price inflation. – Carry on reading to find out why.

The Facts

In June, the RHA (Road Haulage Association) released a statement calling for six key measures to be implemented by the Government to reduce the driver shortage problem. However, despite passionate campaigning, it hasn’t produced the results The RHA were looking for.

UK Government Ministers may have increased the funding limit for Large Goods Vehicle Apprenticeships to £7,000, but it still isn’t enough.

UK Hauliers are still struggling to recruit qualified drivers, with the RHA revising its driver shortage estimate on Wednesday, June 23rd 2021, from 70,000 to 100,000, meaning there’s still fresh food rotting in our cold stores.

Supermarkets are already missing critical items on their shelves, resulting in another round of panic buying and limits being issued on certain products such as Baked Beans and Pasta. (This is all whilst we are being charged more for our standard shop). Restaurants are also facing similar difficulties meaning the driver shortages are an ongoing problem.

Following Brexit, a drop of 15,000 UK truck drivers partnered with nearly 300,000 UK drivers now over 55 and heading for retirement means that the shortage has now become critical. In short, the industry needs to act NOW.

There’s A Shortage!

The International Road Transport Union (IRU) reported that an additional 76,000 Heavy Goods Vehicles (HGV) drivers were required in the UK during 2020.

Before the pandemic, Road Transport Businesses employed approximately 600,000 HGV drivers; this included 60,000 from the EU. This number has significantly deteriorated throughout the course of the pandemic due to residing workers returning to their native countries during extended periods of travel restrictions. However, the uncertainty of Brexit and future rights to live and work in the UK has meant the vast majority of EU HGV drivers have decided not to return to the UK.

The increasing number of retiring drivers have also exacerbated the problem. The average age of HGV drivers is 55, with less than 2% under 25. Due to the pandemic, prolonged periods of inactivity have resulted in this ageing workforce retiring early or finding employment elsewhere.

The complete shutdown of vocational driving tests throughout much of last year has also resulted in the loss of over 30,000 test slots. This prevented the industry from being able to train and recruit new drivers. A typical year would see 72,000 candidates training to become HGV drivers, with 40,000 succeeding. Last year, only 15,000 completed the training successfully, a dramatic downfall in such a time-critical year.

The IRU also reports that 45,000 HGV driver tests are outstanding at the Driver and Vehicle Standards Agency (DVSA) due to the pandemic. Although the DVSA has estimated that it can undertake 118,000 HGV driver tests before the end of 2021, it will obviously, take months to catch up on the existing backlog.

But the problems don’t stop there. The introduction of IR35 on April 6th, 2021, has resulted in agency labour withdrawing their services as businesses struggled to absorb the significant rate increases that were being requested, in some cases as high as an extra £5-6 per hour. Across the UK, thousands of HGV’s were parked up because haulage businesses could not find drivers to drive them, resulting in delivery lead times of 24 hours increasing to a staggering 80 hours.

Like many others in the industry, the Road Haulage Association (RHA) believes that the Government needs to take action. The RHA wants ministers to add HGV drivers to the UK Shortage Occupation List. This identifies occupations that are facing a shortage of labour so that eligibility for the skilled worker visa scheme can be granted, allowing migrant workers to fill those jobs where needed.

The UK Government Ministers have increased the funding limit for LGV Apprenticeships but little else has been forthcoming. Although we know the Government can’t solve this crisis, they can undoubtedly remove barriers to help clear the growing backlog across the supply chain.

Contact us at sales@amco-group.co.uk or 01905 758 000 to find out how we can work together to tackle this crisis efficiently.