Global Economic Downturn Increases Truck Driver Shortages
Logistics companies are increasingly faced with a shortage of commercial truck drivers due to a combination of global economic downturn, Covid-19, and the Brexit. Driver shortages have been a global problem even before the start of the coronavirus crisis but recent studies predict a 25 percent increase across all EU member countries.
A combination of factors that industry experts have been warning about for a long time, driver shortages have resulted in a situation where European logistics companies and businesses find it increasingly difficult to move goods to shelves on time. They are also increasingly facing higher operating costs for doing so.
Figures and Reasons for Shortages
A survey involving 800 forwarders in more than 20 countries shows that driver shortages are most serious in Eurasia. About 1/5 of the positions are currently open. China has been the least affected, with just about 4 percent of positions not filled.
There are different reasons for the mismatch between supply and demand, the traditional being earning restrictions, lifestyle, and demographics. The commercial driver workforce is aging in advanced economies, which makes it challenging to find replacements. With the average age of drivers in the EU being 44 years, every fifth position is now vacant. Lifestyle also acts as a deterrent for many as commercial drivers spend 2 – 3 weeks on the road. It is also a fact that drivers work long hours compared to other professions. In some cases they spend up to 70 hours a week when on duty.
The pandemic also has a role to play. For one thing, it slowed the process of training, testing, and licensing of commercial drivers, resulting in supply chain disruptions. Restrictions and shutdowns of motor vehicle administrations and training schools across Europe have caused a declining flow of new market entrants. And while states are trying to make up for the lost time, this trend is likely to continue in 2021.
The surge in e-commerce also increased market imbalances. As many consumers have shifted to online shopping, increased volumes of small shipments pushed up demand for commercial trucking. This can hardly be surprising given that trucking services are cost-effective for online retailers.
Price Rises Due to Increased Demand
Consumers are likely to see a rise in retail prices resulting from demand exceeding supply. This is a likely scenario that can cause customer dissatisfaction as well as a hit to stakeholder and brand reputation.
One solution is to offer drivers financial incentives to join the workforce. Payments should include hours waiting at warehouses, hours unloading and loading, hours driving, etc. Automation is also a possible solution in the near future, with automated trucks helping to alleviate persisting shortages. One problem here is that drivers will be still needed in the years to come, at least for the first and last mile. Still, the requirements and nature of the job will be different and hopefully contributing to alleviating shortages.