The freight and logistics sector is still suffering a shortage of skilled drivers, according to the Freight Transport Association (FTA)’s July Quarterly Transport Activity Survey (QTAS), sponsored by Santander Corporate Banking.
The survey, which asked the opinions of 6,000 freight and logistics businesses in the FTA’s membership, showed that almost a third of respondents were experiencing long delays in recruiting HGV drivers. Given the sector’s reliance on skilled HGV drivers from abroad and the ongoing uncertainty over workers’ status as the Brexit negotiations unfold, members are keen for clarification on what the situation will be once the UK exits the EU.
“At a time when British businesses are becoming increasingly reliant on an efficient supply chain, the lack of qualified drivers available to work could soon become cause for concern,” says Christopher Snelling, Head of National and Regional Policy at FTA. “And with just over 57% of respondents to QTAS also anticipating a shortage of HGV drivers moving into the second half of 2017, it is clear that the industry needs a recruitment boost to overcome the potential issues which this could cause in the long term to Britain’s ongoing profitability.”
International trade through UK-based hauliers also proved less buoyant than anticipated in April, and could reflect the low levels of growth in the overall economy in the second quarter of the year.
Respondents reported weaker growth in domestic road freight activity levels in Q1 2017 compared to the previous quarter. The outturn growth in activity reported was lower than the expected level of growth anticipated in the April 2017 QTAS report, reflecting the muted growth in the UK economy during the period.
However, the survey did give cause for cautious optimism about domestic logistics operations, with most industrial sectors and most regions indicating reasonable levels of growth in Q2 2017, and the majority reporting they expect strong growth in activity levels in Q3 2017.
Looking forwards, growth in demand for haulier hire and contract hire is expected to be broadly similar to the previous quarter in the next three month period, with growth in demand for contract distribution expected to be softer.
Across the other modes of freight transport, respondents reported that short sea, deep sea and air freight volumes are expected to grow on most trade routes in Q3 2017. The anticipated improvement in export volumes is probably due to the low level of Sterling against the US Dollar. The anticipated rise in import volumes is probably due to the continued growth in the UK economy. The rail network maintained its reliability advantage over the road network in Q2 2017.
John Simkins, Head of Transport and Logistics, Santander UK, said, “A shortage of skilled drivers has been a persistent challenge in the sector over recent years, and the results of this survey indicate that this is still an ongoing problem. However, it is encouraging to see that businesses from across the country are expecting strong growth in domestic activity in the coming months. Despite some T&L businesses putting their international expansion plans currently on hold, the T&L sector will continue to play a crucial role in the UK economy.”
Copies of the full QTAS report for Q2 2017 are available from www.fta.co.uk
FTA represents all modes of the UK’s freight and logistics sector on behalf of its 16,000 members. The UK remains a leader in logistics at a global level, ranked in the top ten countries in terms of logistics performance, and the sector contributes 11% of the UK’s non-financial business economy. In 2016, 2.54 million people were employed in logistics in the UK, approximately 8% of the UK’s workforce. FTA members operate over 220,000 goods vehicles (half the UK fleet), consign over 90 per cent of the freight moved by rail and 70 per cent of sea and air freight.