Tuesday, December 3, 2019

Freight Transport Lobby Group Foretells the Ghost of Christmas Future

(and it Looks Pretty Bleak)
Shipping News Feature

UK – Twas the night before Christmas, when all through the warehouse, not a vehicle was stirring - due to a growing shortfall of 59,000 HGV drivers. A tenuous lede at best but, the Freight Transport Association (FTA) says that it is confident that the logistics sector will deliver Christmas on time this year despite the industry facing severe staff shortages.

The FTA points out that the logistics sector is the lifeblood of the nation’s economy, employing around 2.6 million people and contributing £124 billion gross value added (GVA). Logistics is also a critical enabler of success across all businesses sectors.

According to the FTA's latest skills shortage report, HGV drivers and mechanics are becoming increasingly hard to recruit, and the age demographic, specifically within the HGV driver population, is significantly older than the national average. Retirement and problems recruiting younger people are contributing to driver shortages in particular, with 60% of HGV drivers over the age of 44 and only 19% under the age of 35. There is a lack of people filling the void left by those leaving the industry. Not enough young people are considering logistics, especially HGV driving, as a career option.

The issue will be significantly worse for Christmas 2020 unless the government amends its post-Brexit immigration policy to retain existing EU workers and welcome new ones after the UK leaves the EU. Sally Gilson, FTA’s Head of Skills Campaigns, commented:

“With UK Christmas present spending now topping £19 billion a year, and 42% of that spent online, the pressure on logistics businesses to deliver a flawless Christmas for consumers and businesses alike is increasing every year. At the same time, the availability of HGV drivers to deliver these gifts and other vital commodities has declined by 16,000 year-on-year despite soaring demand for their services.

“While the industry is resilient and flexible, logistics businesses will do everything possible to keep goods moving across the UK. With the skills shortage worsening each year, delivering Christmas on time will become increasingly difficult after the UK’s departure from the EU, unless the government provides the support industry needs.

“The logistics sector is heavily reliant on EU workers: they currently constitute 13% of the sector’s entire workforce. But the government’s proposed post-Brexit immigration policy fails to take into account what these employees bring to industry and, instead, is based around arbitrary academic levels and minimum salary requirements, not what the UK economy needs to remain functional.

“The FTA is urging the government to amend its future immigration policy to allow these workers continued access post-Brexit; the government must prioritise the recruitment and retention of HGV drivers alongside other logistics staff, to future-proof Christmas for years to come.”

In the FTA's Skills report, estimates of employment in UK logistics in Q1 2019 were assessed using the most recent data from the Labour Force Survey (LFS). The data show the wider logistics sector employed 2.59 million people, of which 13.2% were non-UK, EU nationals, up from 11.3% in Q1 2018.

Overall, the number of people employed in logistics decreased by an estimated 18,397 (0.7%), in the year to Q1 2019, while the number of HGV drivers was down 15,859 (5%), year on year. However, the reliance on labour from EU workers within various roles has helped mitigate the fall in the total number of UK nationals working in the logistics sector.

In the first quarter of 2019, compared with the same time the previous year, the proportion of HGV drivers who were EU nationals increased by 5.2% (but decreased 5.1% compared to the previous quarter), while the number of van drivers who were EU nationals increased by 61.3% to 41,008.

Overall, there was a 16.5% annual increase in EU nationals in logistics. This was offset by a decrease of 67,068, or 2.9%, in UK nationals, with HGV drivers in particular seeing a fall of 17,693, or 6.3%, in the UK-national head count. While the number of people employed in logistics fell in Q1 2019, there were some increases for warehouse and storage occupations and van drivers (12.4% growth), driven by rising demand for warehouse space and deliveries from online retailing.

The popularity of online shopping contributed to record-breaking take-up of warehouse space in 2018. The first half of 2019 was lower than the same time the previous year but was above the half-year take-up average for the past 10 years. The online retail sector represented over 30.6% of overall take-up. The second largest sector was third-party logistics (3PL) providers, with 28.5% of take-up.