Posted inAnalysis

Is the transportation crisis here for the long haul?

The haulage and petrol crises are not confined within the borders of the UK, although it seems most acute there. The former, certainly, is something also being felt across the continent.

Last week, I took my bike into Decathlon for its yearly service, only to be told that a number of parts would be replaced. And in this store, in the centre of Berlin, one of the company’s flagship stores with thousands upon thousands of products, the mechanic told me that it would be three weeks at least before they would have the parts that need to be replaced. When I asked why, he said, “We have the same haulage problems as everyone else.”

400,000 drivers short

But this is just the tip of an age-old problem. A recent White Paper from Transport Intelligence with the imaginative title of European Driver Shortages says that this has been an issue for the last decade and a half.

The report says: “The issue comes as the pool of truck drivers is contracting but demand for transport is rising. As global economies have grown, the demand for transport has increased which has caused a strain on personnel resources especially for van and last-mile drivers. As this happens, labour costs are also rising, which is increasingly putting pressure on road freight operators and freight rates. The reasons behind the growing shortage are plentiful as are the solutions, but the implementation is difficult and lengthy.”

Transport Intelligence estimate that there is an overall shortage of around 400,000 drivers with the European freight industry. Surprisingly, the biggest shortage seems to be in Poland, for which a very exact figure of 123,842 is given. This is followed by the UK, with 60,000 to 76,000, and Germany with 45,000 to 60,000 shortages respectively.

Bitten by Brexit

The problem with the UK, though, is that Brexit has made it harder to recruit drivers from other European countries. Transport Intelligence makes that clear in its report: “The UK is in a particularly difficult position as it is not only grappling with Brexit, but it also saw many European workers leave over the course of the pandemic, as fears over lockdowns grew.”

Apologies for the lengthy quoting here, but it is important.

“Brexit effectively ended recruitment from the EU,” says Transport Intelligence, “making it legally impossible to recruit foreign HGV drivers. The covid-19 pandemic created a backlog of tests and saw around 15,000 Eastern European driver returning home. Finally, newly introduced tax reforms exacerbated the exodus of EU drivers from the UK which will only get worse over the coming summer.”

The effects have been stark: “From 2010 to 2017 the number of EU nationals driving HGV in the UK rose from 10,000 to 45,000, and fell to 42,000 in early 2020, possibly related to Brexit. From March to June 2020, the number of EU HGV drivers declined by another 15,000, to 25,000, recovering only slightly to 28,000 by the end of the year. Additionally, the pandemic is also believed to have accelerated the retirement rate in the industry.”

Taxation has also not helped. “The so-called IR35 reforms by UK’s HM Revenue & Customs,” says Transport Intelligence, “further exacerbated the issue. The reforms required all contractors with a turnover of £10m or 50 staff to pay full tax and national insurance on their drivers, starting in April 2021. Even though this was widely welcomed by industry leaders, the reforms were adding to the shortage, who reject the drop in incomes that come with regularising their tax status. Research suggests that around 12,000-15,000 EU drivers left partly due to the pandemic and another 5,000-10,000 left due to the tax changes.”

(At this point, I will confess that about I was an employee of the Revenue nearly 20 years ago, for which I can only apologise. It was a different and difficult time in my life, and does not reflect the person that I am today.)

Lonely road

Becoming a driver is not an easy life. It is an awful job, often populated by lonely, ageing men. And it is pretty much exclusively men. According to ITV, “The haulage industry estimates that there is a shortfall of up to 100,000 HGV drivers, yet only between 1% and 3% of truckers are female.”

It is a job that requires a lot of solitary travel, responsibility, and time away from home. It is a hard sell for a younger generation to take on, even when a 40% payrise kicks in to try and shake off stagnation.

Which I guess is why it is lucky that the British government is allowing 5,000 temporary visas up until Christmas. Because what’s the point in fixing a problem in advance when you can just slap a plaster on it once it is too late?

What we are seeing now, exacerbated by covid, are the first real effects of Brexit upon the British economy. There is already a shortage in people picking fruit and in food processing, says the BBC. Things that ‘Project Fear’ warned people about in 2016.

It has become fashionable to give up on the idea of relitigating Brexit. The thinking is that it has now happened, that the past is the past. That we should give up on fighting to remain. But here is another idea. We should move towards a period of truth and reconciliation.

Once we have gotten past our various crises, once we get the economy working again (and not in an empty Labour way, but one in which food is on the shelves), can we start looking again at who stood to gain from Brexit, and why?

Pete Carvill

Pete Carvill is a reporter, writer, and editor based in Berlin who has been writing for the B2B and mainstream media since 2007. He is a contributing writer for Expert Investor and, in addition, has...

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