VS1 Cloud Blog

VS1 Cloud Blog

As food shortages loom, how to solve the driver crisis?

5th Oct 2021 | Wholesale

The shortage of HGV drivers is threatening food supplies, but the government has proved reluctant to take action. What is the way ahead?

The Road Haulage Association has called it “worse than Covid” in terms of its potential to impact UK food supply chains.

The crippling shortage of HGV drivers, estimated to be a void of 100,000, is leaving logistics networks unable to meet demand.

Calls to mobilise qualified army personnel have been made by both the RHA and the Federation of Wholesale Distributors, as industry leaders scramble for emergency solutions to keep supplies flowing.

Convenience store retailers have complained of being left with empty shelves as wholesalers fail to deliver. Tesco has reported tonnes of food going to waste in its supply chain in a week amid delayed deliveries (see box, right).

And in the latest developments reported by The Grocer this week, leading brands are warning of disruption.

So how, after proving so resilient amid last year’s wave of panic buying, how did supply chains end up so apparently in jeopardy now, and what can be done to mitigate them in the short and long term?

How the HGV driver shortage came about
The RHA points to four key factors creating a ‘perfect storm’ of driver shortages.

The pandemic was the first, causing swathes of hauliers to repatriate to the EU last year, says the trade body.

And lockdown put HGV driving tests on hold, creating a backlog of 30,000 applicants that has yet to be cleared, says RHA CEO Richard Burnett.

The second factor, according to the RHA, was Brexit. From 1 January 2021, those repatriated HGV drivers were no longer eligible to return to work in the UK, since the job is not on the Home Office’s Skills Shortage Occupation List.

Then in April this year came HMRC’s introduction of new IR35 tax rules, meaning self-employed hauliers working shifts via agencies were switched to employed status if they drove for a sole company and didn’t own their own vehicle. The PAYE tax model, now applicable to those drivers, has put huge strain on haulage company budgets, says a leading national haulage firm director, whose business had to change the employment status of 80% of its drivers and was forced to raise its prices on key routes as a result of the new tax rules.

During the busy summer and Christmas seasons, many logistics companies, wholesalers and supermarkets supplement their fleet with agency drivers, but the numbers of those have also fallen.

Worse still, the new pressures have been heaped on an already depleted workforce, with a historic shortage of up to 60,000 drivers, according to the RHA. The group puts the average age of an HGV driver at 55, with only 1% of them under 25, meaning the workforce already badly needed fresh blood.

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By: Lyndsey Cambridge