Pay rises and improved working conditions are helping hauliers to overcome the nationwide driver shortage, according to accountancy and business adviser Duncan & Toplis.
The company reports pay rises of between 10 and 14 per cent are helping haulage firms to attract and retain drivers in the wake of a national shortage which has severely impacted the industry over the last year.
Although there is a nationwide worker shortage across many sectors, fuelled by both the pandemic, Brexit and long-standing issues, the haulage sector has been in particular need of qualified drivers.
Official figures show an 81% rise in the number of vacancies for the transport and storage industry between October and December last year compared to the same period in 2020, with 56,000 vacancies, according to the Office for National Statistics.
Meanwhile, the Road Haulage Association has warned that the industry is short of up to 100,000 drivers, with 40,000 fewer than before the pandemic began.
Keith Phillips, Head of Transport, Haulage and Logistics at Duncan & Toplis, which supports more than 12,000 people and organisations across the East Midlands, including 40 haulage businesses, reports that increasing pay and conditions is helping companies to overcome the shortage.
Keith Phillips said: “Since the haulage crisis was at its height this summer, the emphasis may have changed, but the underlying issues have not. Some hauliers, such as those transporting product from ports to factories are now faring a little better because there are fewer goods coming into the country. Meanwhile, those handling raw food products are struggling because demand is high at this time of year.
“Generally however, hauliers are overcoming the driver shortage by trying to tempt drivers who’ve left the profession to come back to work by increasing pay and making the work more appealing. Most of my clients have increased pay by around 14% and they’re offering options like flexible working, fixed hours, fixed days and full or part time work.
“This is certainly helping because lots of HGV drivers have left the profession over many years to drive smaller delivery vans where they could work shorter days, drive shorter distances, have greater flexibility and still have good pay. From what my clients are telling me, the sector is succeeding in turning the tables now, but there is still a way to go.”
While ONS labour market statistics do show an 81% increase in vacancies year on year for the transport and haulage industry, the October-December period was the first time in 12 months that the number of vacancies in the sector had decreased, reducing from a record 57,000 vacancies in September to November to 56,000 vacancies at the end of the year.
Ballards Removals, which employs 35 full-time drivers, has managed to overcome the effects of the driver shortage by increasing its pay offer. The company has increased pay for all its staff by at least 10% over the last year with two successive pay rises. Ballards drivers help hundreds of families and individuals move home each week, with many customers requiring belongings and furniture to be moved across the country and to continental Europe.
Managing director of Ballards Removals, Matthew Ballard said: “The driver shortage has been a growing problem over many years, caused by the number of drivers retiring at the end of their careers and the lack of new starters taking up driver training and it’s then been made worse by Brexit and the pandemic. We were fortunate to be able to nip this problem in the bud by improving pay to make the job more lucrative.
“I’m glad that many other employers have done the same as we have because, if there’s one positive of this driver shortage, it’s that it’s drawn attention to the important role drivers play in keeping our country moving, encouraging employers everywhere to finally treat them as the valuable workers they are.”
Another haulier, Jeremy Morris, Managing Director of Hull-based ET Morris & Sons Ltd which operates 30 vehicles delivering goods across the UK, agrees: “The driver shortage was terrible a few months ago. It was absolutely awful and we just couldn’t get drivers. Lots of Eastern-European drivers left after Brexit, leaving everyone in the industry with a big problem.
“Generally, every company has had to pay more to keep their drivers and attract people back into the industry, including ourselves, and although this has helped things level out for now, it’s pushed up prices and the industry is still not saturated with drivers by any means. I don’t know how it’s going to work out long term and I think the driver shortage will be with us all through this year unless something can be done to help us attract drivers from overseas again. Of course, this is all having an impact on costs for end users, driving up inflation for everyone.”
While increased pay across the haulage sector is addressing the short term issue, Keith Phillips at Duncan & Toplis agrees that there are underlying causes that need addressing. He also warns that increased driver pay largely results in increased costs for companies that rely on haulage and logistics to do business, as well as for consumers. Keith Phillips said:
“A consequence of all of this is that attracting drivers from one job to another will create staffing pressures in other areas of the economy, and higher wages means higher costs for clients. As a result, companies are having to prioritise higher margin work to the detriment of others and there are long delays. Brexit has meant there is still a constant backlog of goods at ports and container prices have shot up too and all of this is causing problems for all other parts of the economy, let alone haulage.”
One company that has depended on imports and exports is Lincoln-based manufacturer, SuperFOIL Insulation, which is one of the UK’s leading manufacturers and suppliers of high performance foil insulation. The company has experienced lengthy delays and soaring shipping costs which have increased the costs of imported materials and almost wiped out exports. SuperFOIL’s managing director, William Bown said:
“The cost of moving goods in and out of the country has shot up over the last year and delays have meant we’ve almost had to give up selling goods to Europe, which used to account for 20% of all our income. It used to cost us around £800 to send a truckload of our product to the Netherlands; it’s now around £3,000 and there’s a 90 day lead time.
“I don’t see the problem easing any time soon, despite our best efforts like setting up a Dutch company and streamlining the way we ship and distribute goods. Luckily, we have had a record year for domestic sales which has made up for the shortfall and this has meant we haven’t had to rely on haulage so much, but this year could have been so much better if the driver shortage and border problems hadn’t been an issue.”
In response to the driver shortage, the UK government claims it is providing funding to help train new HGV drivers, increasing the number of HGV driving tests and encouraging former drivers to return to driving. The government has also relaxed drivers’ hours rules, visa restrictions and offered apprenticeship incentives. However, Keith Phillips at Duncan & Toplis claims that it may take years for these to have a significant impact.
Read more:
Two years from Brexit: Pay rises help hauliers overcome UK driver shortage