Driver Require CEO, Kieran Smith [pictured], features prominently in the House of Commons Transport Committee’s recent report, which explores the challenges currently facing the supply chain in the road freight industry.
Although the UK has now passed the acute phase of the Covid-19 pandemic and social restrictions are no more, the logistics sector has not been able to fully supply essential goods to the UK’s supermarkets, petrol stations and other marketplaces for some months.
A severe labour shortage in the industry has meant that HGV driver numbers are at a minimum. Contributing factors include an ageing workforce and record job vacancies across multiple sectors in the UK economy, meaning that recruiting and retaining talent in the haulage industry has been challenging. The issue has, at times, left supermarket shelves bare and motorists unable to fill their vehicles with fuel.
The Transport Committee’s report sought to establish the challenges facing the logistics industry and their causes and put forward recommendations that will make the supply chain and its workforce more robust and resilient.
Smith was invited to the House of Commons along with other sector representatives to give evidence to the Transport Committee in December 2021, after which the report into the issues blighting the logistics sector was compiled.
Within the report, Logistics UK are quoted as saying that the pandemic “exacerbated the existing shortage of HGV drivers”, which had “deteriorated from chronic to acute.”
While the Department for Transport [DfT] pinned the blame for labour shortages on disruption to driver testing and increased demand as the economy reopened, Smith shared his view that the “majority” of the shortages were fuelled by the ageing logistics workforce, with “over-45-year-olds leaving in their droves”. Indeed, 50,000 adults of that age left the haulage workforce over the first quarter of 2021, which Smith said had “triggered the crisis” in the industry.
Smith added that the shortage had also been worsened by the impact of IR35 rules which disincentivised the outsourcing of recruitment; the full enactment of Brexit which saw many European workers return to their countries of origin; and “other factors”.
Smith highlighted statistics provided by Tesco, which stated that roughly 79 per cent of its drivers were employees while the remaining 21 per cent were agency staff. In April 2021, new off-payroll working rules were implemented as part of IR35 legislation that made such outsourcing less attractive and further contributed to labour shortages.
The Driver Require boss was also critical of the regulation of drivers’ working hours, after the DfT temporarily relaxed regulations between July 2021 and February 2022. Smith and most other industry representatives in attendance at the Committee meeting voiced their opposition to the move, with the Chartered Institute of Transport and Logistics [CILT] saying that it placed “more pressure on an already stretched workforce”.
While the government argued that the changes provided “no diminution in the overall amount of rest” drivers must take, Smith criticised the regulations as “mind-bogglingly complex” and called on ministers to simplify them.
Smith also informed the Committee that the industry and government were not doing enough to retain talent, particularly HGV drivers, on issues such as working conditions and remuneration.
Smith explained: “The nature of the job is that the majority of the hours are antisocial and unpredictable.
“When you get to a point where you wish to start a family, you end up with a bit of a conflict because the wages to date, up until this year, have not been sufficient for a driver to be the primary income earner for a family unit.”
He went on to argue that the salaries of drivers had been depressed for the last two decades because of a “highly fragmented haulage market” and “powerful, consolidated buyers dominated by the grocery sector and the high street retail sector”.
Smith added that over previous years, wages had been kept low by the “outsourcing of labour to agency” which only now is being addressed by IR35, but for years the government and HMRC had “essentially tolerated the avoidance of tax”.
The full report can be read here.
