The shortage of truck drivers is now reaching a critical point, especially in Europe. A factor that should affect the evolution of transport prices.
It's the kind of refrain that we've been hearing for years: road transport is chronically labour-poor. But it seems that we are now reaching a critical threshold. Last March, an IRU study found a serious shortage on a global scale. In Europe, according to a survey published by Transport Intelligence last August, there would seem to be a shortage of more than 400,000 drivers.
Future tenders to be affected by inflation
Professional organizations and institutions are mobilizing to find new sources to recrute from. The sector is working to encourage the feminization of the workforce. This approach would seem to have met with some success in the United States, where their proportion has increased from 3% to 11%, however it seems that the current working conditions do not make it possible to massively seduce this target audience, at least not in Europe. Another pool has now been identified: that of migrants. The IRU has initiated an operation to raise awareness among European institutions on the steps to be taken to attract and train legal migrants as road drivers. But all these steps take time and in the immediate future, the pressure is strong, as shown by the current disruption of supplies in the United Kingdom. The traditional logic of supply and demand is therefore taking over, with pressure to implement pay rises.
Wage increases already began in Eastern European countries a few years ago. Today, the United Kingdom is witnessing the largest increases. Some companies offer hiring bonuses of £1,000 and pay rises of up to 15% to retain their drivers. The trend can only spread throughout Western Europe. Dutch trade unions have already obtained a general wage increase of 3.5% in July 2021 and a programmed 3.25% rise for January 2022. The mood is therefore clearly inflationary.
In an article published on September 3rd, the Lithuanian carrier Girteka Logistics announced "a difficult season in Europe for tenders" for the 4th quarter of 2021, under the influence of the shortage of drivers and the new rules to come into effect under the Mobility Package from 21 February 2022. Luis Gomez, president of XPO Logistics Europe, confirms this diagnosis in an interview with the Financial Times quoted by the website Trans.Info. Gomez estimates that drivers' wages will see an increase close to, or into, double digits, and that road transport prices will increase for at least the next 18 months. Our latest Upply / Ti European road transport price barometer shows that the trend has already started.
The hypothesis that shippers will have to experience in road transport what they have experienced in maritime transport over the last 18 months, namely a lower level of service at a higher cost, is therefore not to be excluded. This is clearly a break with the dynamics that we have observed for almost 40 years.
The situation by country
The table below, taken from the Transport Intelligence study on the shortage of truck drivers, details the situation country by country. Poland is the most seriously affected, followed by the United Kingdom. Next come Germany and France showing a shortfall of between 40,000 and 60,000 jobs, then follows Spain and Italy at around 15,000 each. Spain therefore seems relatively spared since the estimated need represents only 6% of the total of the 250,000 drivers recorded in the country in 2018, according to a CNR study published in 2020. However, this country represents the second largest European market for road freight transport in tonne-kilometers transported, behind Germany and ahead of France.
- Poland is suffering
Poland is the sick man of Europe. It is estimated that there is a shortfall of more than 120,000 drivers! In our February 2020 article titled "Polish hauliers' blues should be short-lived", we were already talking about this phenomenon. Estimated at 100,000 - 110,000 in 2015, the driver shortage is expected to reach the 200,000 mark in 2022. Neither the training of new drivers nor the use of drivers from third party countries will be enough to replace the retirees.
This poses a very serious threat to the country's economy, as the transport and logistics sector accounts for almost 7% of Polish GDP as of today (and a surplus of more than 10 billion euros alone for the trade balance). In 10 years, the Polish flagged sector has experienced tremendous growth, competing for first place with Germany. It also reached the top of the podium in 2017.
- The specific situation of the United Kingdom
The UK is also grappling with a lack of drivers. The country recently made headlines with shortages recorded in stores, gas stations, and restaurants. The issue of driver availability is not the only cause, but it has undoubtedly played a role.
The United Kingdom had to deal on the one hand with a strong recovery in activity in the second quarter of 2021 and on the other hand with the departure of 30,000 European drivers (mostly Polish, Romanian or Bulgarian) due to the pandemic in 2020; they seem not to have returned because of Brexit, either through personal choice or owing to administrative hurdles. It should be noted that the profession of truck driver is not part of the list of professions officially in short supply over the Channel, which de facto blocks access to the many European drivers who worked there before Brexit. It is estimated that there is a shortage of at least 60,000 drivers, and the British Road Haulage Association (RHA), even estimates the figure at around 100,000, as we indicated in our report covering the six first months of Brexit.
British employers' organisations (RHA, Logistics UK, etc.) are now calling for an easing of immigration rules. After initially dithering, Boris Johnson's government has agreed to temporarily facilitate the granting of visas for road drivers.
A relentless demographic evolution
The analysis of the demographic evolution of the population of road drivers on the French market makes it possible to understand the mechanisms that are at work. According to the 2020 OPTL report (Prospective Observatory of Trades and Qualifications in Transport and Logistics), the number of drivers in France involved in road freight transport was approximately 300,000 at the end of 2019, of which 3% were women. Over a ten-year period, the sector has experienced an aging of the workforce, more marked among public transport drivers, but also noticeable in freight transport. The 50-57 age group clearly dominates.
The renewal rate (ratio of number of employees over 50 years to total number of employees), which reflects potential theoretical retirements in the next twelve years, amounted to 36% in the RFT at the end of 2019, or about 110,000 drivers to be recruited simply to compensate for the retirements. The relay rate, i.e. the ratio of employees under 30 to employees over 50, which amounts to 0.36, is also much lower than in the rest of the economy (0.84).
These explanations backed up by figures seem to be transposable to the Polish, German and European markets in general. There is a rise in the average age of driver populations in Europe and an obvious lack of appeal for the sector. The profession no longer attracts the younger generations. On the one hand, freedom, or more precisely autonomy, which could be one of the appeals of the profession, has been somewhat limited by the deployment of geopositioning. On the other hand, working away from home and returning there less than once a month or sometimes once every 2 months for international long-distance drivers is increasingly seen as a sacrifice.
Over and above the question of wages, the balance of power could also turn to the advantage of truck drivers who seek improvements in working conditions. "Due to low wages, drivers are forced to work long weeks of 60 hours and more. These long working weeks without rest cause drivers to drop out or go to work in other sectors", argues the Belgian Transport Union. An improvement in working conditions is one of the objectives of the Mobility Package. As such, it will be interesting to analyse the impact of the entry into force, next February, of the provisions on the posting of drivers and cabotage.