Picture: 123RF/SOLEG
Picture: 123RF/SOLEG

London — When Helen Wang’s Abakus Foods is ready to ship its seaweed crisps — stocked by stores such as J Sainsbury and Asda — she calls up a haulier.

Normally, a truck comes the same day to collect them from her base in northeast London. But in recent weeks there has been a problem: a national shortage of truck drivers means deliveries are facing delays and stock is piling up.

“It’s a struggle every time,” said Wang, who has had to pay £3,000 a month to rent extra storage space for goods that have not been collected. “It’s meant a lot of headache and tension.”

Her experience is one shared by many companies across Britain: a shortage of truck drivers, worsened by Brexit and Covid-19, is pushing up delivery costs and leading to empty shelves in stores.

It is a sign of a much bigger structural shift in the UK economy after Prime Minister Boris Johnson took the country out of the EU. Industries from hospitality to agriculture and health care are having to adapt to a sudden reduction in the availability of cheap labour from the bloc. The symptoms are likely to worsen after the government’s lifting of the bulk of Britain’s coronavirus restrictions on July 19.

The shortage is having ripple effects throughout the UK economy. Fresh fruit, vegetables and milk are going to waste due to cancelled or delayed deliveries, according to Tom Bradshaw, vice-president of the National Farmers Union. The country’s biggest supermarkets are beginning to see gaps in their offerings due to goods not arriving at their stores.

Working hard

“While we might not always have the exact product a customer is looking for, we’re delivering more products to stores every day and we are confident customers will find a suitable alternative,” Sainsbury said. In June, Tesco CEO Ken Murphy said the company is working “exceptionally hard” to manage the driver shortage.

The lack of truckers — the result of an ageing workforce, the high cost of training new drivers, and the industry’s low margins — has long been a problem in Britain. But the twin effects of Brexit and Covid-19 have brought the industry to a crisis. In 2020, there were 76,000 fewer drivers than needed, a figure that has since risen to 90,000, according to Logistics UK, a lobby group.

“It’s close to a perfect storm,” said Ian Baxter, chair of Baxter Freight, a Nottingham-based transport firm which moves goods for FTSE-100 companies. According to him, the pandemic has disrupted training courses for new drivers, while the additional customs checks required by Brexit have delayed truckers making deliveries.

“The supply of vehicles is extremely tight,” Baxter said. Prices for same-day deliveries have gone up by as much as 30%, he said.

First test

For Johnson’s government, addressing the driver shortage is one of its first big practical tests after Brexit, but the solutions it has so far offered have only put it at odds with the industry.

The government has rejected calls from hauliers to give overseas drivers temporary visas to help plug the gap. For Johnson, one of the arguments in favour of leaving the EU was controlling migration.

“We have no plans to introduce a short-term visa for HGV drivers,” the department for transport said. “Employers should invest in our domestic workforce instead of relying on labour from abroad.”

To address the problem, the transport department said it will provide additional testing capacity so more drivers can become qualified and provide more funding to train drivers.

The government is also relaxing rules limiting the hours truckers can drive each day. They previously had to stop after nine hours, but this has been extended to 10 hours. Yet the industry argues this is a poor, low-impact fix that threatens driver safety.

Short-sighted decision

“Tired drivers do not make better drivers,” said Rod McKenzie, MD of public policy at the Road Haulage Association. “It’s an incredibly short-sighted decision.”

Johnson’s administration has left it up to the industry to take further measures. Speaking in the House of Lords on July 7, transport minister Charlotte Vere called on truckers to “step up just a little more”.

Increasing wages in the industry could help. Before the pandemic, a driver could expect to earn an average of £32,000 a year. Truckers hired through agencies can now expect to earn more than £40,000, a figure that is set to rise further as the shortage worsens, according to Kieran Smith, CEO of Driver Require, a specialist driver recruitment agency.

The best way of fixing the immediate shortage, Smith said, would be to encourage truck drivers in the UK who have found work in other fields to get behind the wheel again. There are about 300,000 qualified drivers who fit this profile, and many could be tempted back with better pay and working conditions, he said.

For Hubert Zanier, MD of Kipferl, a London-based cafe which delivers Austrian delicacies such as sachertorte across the UK, a solution to the shortage cannot come soon enough. He complains he has been plagued by drivers not showing up to collect consignments or failing to deliver them.

“We have a real problem,” Zanier said. “Delivery is getting more and more a real nightmare.”

Bloomberg News. More stories like this are available on bloomberg.com

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