HGV Driver Shortage – Supply Chain Challenges Increase

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HGV driver shortage – the background

A shortage of HGV drivers is not a new challenge for our industry yet increasing demand across the supply chain now means the situation has hit crisis point – and finally national headlines.

When our recent Industry Monitor report was published in June, 29% of operators listed recruitment of skilled HGV drivers as their top concern.

So how big is the problem and how many drivers are needed? Logistics UK suggests 76,000 additional HGV drivers are required to support operations, while the Road Haulage Association now puts this number at more than 100,000 based on a member survey.

A combination of the Covid-19 pandemic and Brexit has proved the perfect storm for those trying to source staff. It’s thought Brexit prompted around 15,000 European HGV drivers to have left the UK for mainland Europe.

And now a backlog of potential candidates wanting to book essential HGV driving test slots with the DVSA means the sector has been dealt another blow.

What is preventing the sector from recruitment?

According to respondents to our Industry Monitor, one quarter (27%) of operators feel the most significant barrier to sourcing new drivers is low wages compared with similar jobs, with the average HGV driver salary in the UK sitting between £26,000 – £35,000 per annum.

While more than a fifth say difficulties for young people entering the industry, such as high insurance and training costs, are the main issue. Other cited barriers include poor industry image, inadequate roadside facilities for drivers, drivers’ hours legislation and lack of secure parking.

Changes to the IR35 tax status this year have also created a challenge. Under IR35, large and medium-sized haulage companies with a net turnover of more than £10.2m or 50 or more staff will not be able to take on HGV drivers that work as limited companies. Instead, drivers will need to be employed as a PAYE worker – either by the haulage company or the driver agency or through an umbrella company.

So, what can be improved to help onboard HGV drivers?

Both Logistics UK and the RHA are urging the DVSA to ramp up testing of key HGV drivers and help fill the vacancies that operators are struggling with. Logistics UK is asking the government to provide interest-free loans or grants to train and reskill potential employees for a road haulage career and catch-up on driver tests lost during the pandemic.

And it’s clear they have backing from operators. Our Industry Monitor highlighted operators’ frustrations including the need for clearer legislation and government leadership and the majority say the industry image needs to be boosted to support the much-needed recruitment drive for new and younger HGV drivers.

Unfortunately, positive action feels slow. And the government’s recent move to relax Drivers’ Hours rules meaning the daily driving limit was increased from nine hours to 11 hours twice a week, was highly criticised on safety grounds. It is also felt this has done little to ease the main issue.

No immediate solution is yet forthcoming

What is clear is that there needs to be some fast action as well as longer-term strategy to support the industry in overcoming this crisis and introducing new talent to the sector.

Our supply chain sector needs government support, which is finally understood and in the meantime competition to fill shortages is becoming apparent and at extra cost to the operators amid increasing operating costs and diminishing margins.

With recruitment and subsequent training typically taking between six and nine months we may need to accept an increasingly difficult period ahead. The resilience of our UK supply chain operators will once again be put to the test as we await constructive intervention and support.