We’ve been writing about the HGV driver shortage since 2018. And now in 2021 the haulage industry not only finds itself in the same situation, but increasingly in a situation which is worsening when it comes to the recruitment of lorry drivers.
The Road Haulage Association (RHA) estimated a shortfall of as many as 60,000 HGV drivers before the pandemic. But now believe this could be as high as 100,000 with concerns for the stability of supply chains increasing with Haribo the latest brand to announce delivery issues due to HGV driver shortages. Tesco have also been reported as saying they are having to bin tonnes of fresh food a week due to the HGV driver shortage. So, it is becoming evident that difficulties in prioritising perishable goods means foods are going to waste as a direct result of driver shortages.
But what is driving the HGV driver shortage in 2021 and what action is the haulage industry calling for to address the shortages?
What is driving the HGV driver shortage 2021?
The impact of the COVID-19 pandemic on HGV driver numbers has been two-fold
COVID-19 has caused disruption across the board due to lockdowns, self-isolation requirements and the economic impact it has had. And one area thought to have been hit is the progress of HGV driver tests. In 2020, many driver test facilities were shut down as the UK entered lockdown periods and restrictions put on the types of work that could go ahead.
The RHA estimate that this has resulted in the loss of 30,000 HGV driver test slots with only 15,000 able to successfully complete their HGV driver training. This is compared to around 40,000 completing their training in a typical year. This reduction is a big loss in an already struggling industry.
The second impact of COVID-19 has been linked to drivers not native to the UK. Many of these drivers returned to their home country due to lockdowns and travel restrictions and are yet to return.
With the end of free movement of people, Brexit has put new rules in place for people coming to the UK to work. The RHA state that as many as 60,000 of the HGV drivers in the UK are from EU member states.
Those living in the UK from the EU, Switzerland, Norway, Iceland or Liechtenstein had until the 30th June 2021 to apply to the EU Settlement Scheme to continue living in the UK. From the 1st July anyone wanting to come from the EU to live and work in the UK needs to meet certain requirements under the UK’s immigration policies.
The uncertainty driven by Brexit and future rights to live and work in the UK is thought to have led to many EU drivers to leave the UK, with many not expected to return.
Brexit also creates more challenges to recruiting HGV drivers from EU member states in the future. Under the new Points Based Immigration System, haulage drivers are not defined as skilled workers so UK businesses are not able to recruit EU or non-EU based HGV drivers under this system. Weightmans set out details of how UK business may still be able to recruit EU based HGV drivers using the frontier working permit which may be of use if this is a concern for your business.
An ageing workforce
At 55, the average age of an HGV driver is also a concern for the industry. Many drivers are approaching retirement age and few younger drivers are coming through to replace them. In fact, less than 1% of the workforce are under 25.
IR35 rules changed from the 6th April 2021, with responsibility to determine an individual’s employment status and whether IR35 rules apply or not moving from the worker to the client. The employment status which is decided by your review will determine whether a worker is subject to off-payroll working rules. If the rules do apply, then the workers fees will be subject to Income Tax and National Insurance contributions.
It is thought to that this is further impacting HGV drivers with the RHA stating that ‘The introduction of IR35 has resulted in agency labour withdrawing their services as low-profit margin logistics businesses (typically 2-3%) cannot sustain demands for £5-£6 per hour rate increases’
These changes to IR35 may also make it less attractive for EU based drivers to work in the UK, as international based contractors carrying out work in the UK may be subject to the off-payroll working rules.
What action is the haulage industry calling for to address the shortages?
The RHA have recently written to the UK government expressing their concerns about the HGV driver shortage and the impact this is having on UK supply chains. In the letter they set out three key actions that they would like to see taken to help the haulage industry address the HGV driver shortage being seen in 2021.
- Calls for the introduction of a temporary worker visa for HGV drivers from the EU and EEA and for this occupation to be added to the Home Office Shortage Occupation List.
- The setting up of a taskforce that works to determine a sustainable way of recruiting and training a homegrown workforce so that reliance on foreign labour dissipates over time
- The re-establishment of the DEFRA Food Resilience Industry Forum
Read the full letter from the RHA to the UK government addressing HGV driver shortages on the RHA website.
With increasing challenges to the haulage industry, it’s more important than ever to review your haulage fleet insurance. At Anthony Jones, as an insurance broker with proven buying power our dedicated experts can help you find the cover that you need for your business at the best possible price. Get in touch with us today on 020 8290 9099 or email us at email@example.com.