Logistics sector gripped by ‘unprecedented’ labour crisis

An unprecedented labour crisis is now gripping the logistics sector, driving up costs and reducing operational flexibility, according to a stream of leading logistics and recruitment executives.

Illustrating the scale of the challenge, Leigh Anderson, managing director of Bis Henderson Recruitment, told delegates at the Multimodal 2019 event in Birmingham, that in his 30 years of supply chain recruitment “in terms of a labour crisis, this is bad as it has been”.

Peter Ward, CEO of the United Kingdom Warehousing Association (UKWA), said he was “very, very concerned” about warehouse labour shortages, while Duncan Buchanan, policy director for England and Wales at the Road Haulage Association, highlighted the current ”very serious driver shortage situation”.

According to Anderson, more than 25% of people in the global supply chain globally are currently beyond retirement age, and some 45% of companies report that they are struggling to fill vacancies. And despite being beset by political and economic challenges, and with Brexit possibly ending access to EU labour supplies, he said any economic recovery could make shortages worse. “We have low unemployment and even in an uncertain society with Brexit, we still have shortages,” he noted.

Pauline Bastidon, head of European policy and the Brussels office at the Freight Transport Association (FTA), said FTA shipper members reported that while the UK driver shortage had eased in recent months, it had worsened considerably in continental Europe resulting in inflationary pricing and less operational flexibility.

“If you want something quickly transported that wasn’t quite foreseen or if you need additional capacity or to ship certain things at relatively short notice, then it’s a problem,” she told Lloyd’s Loading List. “Traditionally haulage in Europe was relatively flexible; you could do that relatively easily. It's now becoming more and more difficult. 

“Haulage providers are more and more reluctant to provide that flexibility, or if they do it comes at a substantial cost compared with before.”

Addressing the image of the logistics sector would help ease shortages, agreed executives. Anderson said 70% of companies report that the perception of the industry was the biggest barrier, not least with only 15% of senior supply chain roles held by women compared to the near parity in achieved by sectors such as finance and insurance.

“That’s pitifully low,” he added. “We have an image problem.”

He also noted that of the top 100 companies to work for in the UK, none were logistics or supply chain companies last year or in 2017, with DPD the last company to feature – at number 73 in 2016. 

Sally Gilson, FTA’s head of skills, said more automation might reduce the need for workers, in future, in some parts of the logistics industry, but insisted “that won’t be enough; we need to attract more young people also”.

She agreed the negative image of the sector was a problem, with media coverage tending towards truck accidents and other negatives.

“It’s really vital we talk up our sector better,” she said. “There’s a huge amount of diversity in our sector. We need drivers, but it doesn’t have to be a job for life.”

She noted that starting as a driver or warehouse worker did not preclude promotion through an organisation, but these career opportunities were not highlighted enough.

She argued that recruiters could look for drivers seeking a career change. “35 is the average age of someone taking their HGV licence,” she said. “So, our demographic might be the middle-age market, people who have started their families - driving appeals to them now. 

“1% of drivers are female, so we need to attract middle-aged men, but also show that our sector is open for women as well.

“We want to diversify and we need to show we’re not just white and male and that there are amazing career opportunities in logistics.”

Buchanan admitted haulage companies and trade bodies needed to work harder on recruitment and training, not least with Brexit set to limit supply. 

“We need to get our house in order,” he told Multimodal delegates. “We can’t rely on importing labour; we need to make a better use of our labour. We need to create the right environment and work harder at training ourselves. There are fault lines with government policy in this area, but we need to work with government and the people who control the purse strings.”