DPD marks UK politician visit with new jobs pledge
The Chancellor George Osborne yesterday visited DPD, the UK's favourite parcel delivery company, to hear about plans for a new £150m investment which will create over 750 new jobs.
On the final day of campaigning ahead of the 2015 general election the Chancellor called in on DPD's state-of-the-art depot in Raunds, Northamptonshire as part of a 24 hour tour of businesses across the country.
DPD announced that as a result of its £250 million investment in its UK business over the last 5 years, it had opened 15 brand new depots, and created 4,000 new jobs. In total it now operates 52 depots, and employs 9,300 people.
The company also confirmed that it plans to continue investing significantly in the UK in the next five years, and today set out plans to invest a further £150 million to open an additional 10 depots, creating at least 750 new jobs.
The 43,000 square foot purpose built Raunds depot opened in late 2013 and now employs over 200 people. The new site replaced DPD's depot in Rushden, and in addition to offering improved access to the A14 and the A45, the new, bigger facility includes the latest automated sorting technology, significantly improving the efficiency of the operation.
DPD's CEO Dwain McDonald commented: "We were very happy to welcome the former Chancellor today and show him around our operation in Raunds. Our record over the last five years speaks for itself with revenue up over £500m and 4,000 new jobs created. Today we announced more good news with a five year plan to build a further 10 new state-of-the-art depots which will create another 750 new jobs at least.
"I'm incredibly proud of what we have been able to do in terms of UK jobs and wealth creation - no other parcel delivery company has come close to matching our levels of growth, profitability or investment in recent years. Our success is based on innovation, service and investment - our unique Predict service means customers are in complete control of their delivery and don't have to wait in all day. Predict is hugely popular with our retail partners as it allows them to offer their customers a truly first class delivery experience, which in turn, encourages them to make repeat purchases."
Last month, Predict helped DPD win the Queen's Award for Enterprise 2015 in the Innovation category. The award - the most coveted in British commerce - recognises not only the quality of the innovation itself, but also the enormous contribution Predict has made in the transformation of the company and the dramatic growth achieved in the last five years.
Launched in 2010, Predict remains the only free service in the UK to give parcel recipients advanced notification of their exact one hour delivery slot by SMS or email, so that they don't have to wait in all day for their parcel. The service includes a full range of ‘in-flight' options allowing the customer to divert their parcel at any time to a specified neighbour or arrange the delivery for another day if they can't be at home.
The UK's favourite parcel delivery company: In the last 12 months DPD has been voted top in both Which? and MoneySavingExpert consumer satisfaction polls for parcel delivery companies. It is the second year running that DPD has topped both polls.
DPD is a member of one of Europe's leading parcels groups GeoPost, wholly owned by France's La Poste, the second largest postal group in Europe.
The company employs more than 9,000 people in the UK, operating more than 3,000 vehicles from over 50 locations and delivering 1.6 million parcels per week.
Driver shortages: Why the industry needs to be worried
While driver shortages are a global problem, with a recent survey from the International Road Transport Union suggesting that driver shortages are expected to increase by 25% year-on-year across its 23 member countries, the issue has very much made itself felt for UK businesses in recent weeks.
A perfect storm of factors, which many within the industry have been wary of, and warning about, for months, have led to a situation wherein businesses are suddenly facing significant difficulties around transporting goods to shelves on time, as well as inflated operating costs for doing so.
What’s more, the public may also see price rises as a result due to demand outmatching supply for certain product lines, which in turn brings with it the risk of customer dissatisfaction and a hit to brand and stakeholder reputation. Given that this price inflation has been speculated to hit in October, when the extended grace period on Brexit customs checks comes to an end, the worst may be yet to come.
"Steps must be taken to make a career in the industry a more attractive proposition for younger drivers, which will require a joint effort from government, industry bodies, and the sector as a whole"
That said, we have already been hearing reports of service interruption due to lack of driver availability, meaning that volumes aren’t being transported, or delivered, to required schedules and lead times. A real-world example of this occurred on the weekend of 4-6 June with convenience retailer Nisa, with deliveries to Nisa outlets across the UK affected by driver shortages to its logistics provider DHL.
But where has this skills shortage stemmed from?
Supply is the primary issue. Specifically, the number of available EU drivers has decreased by up to 15,000 drivers due to Brexit alone, and this has been further exacerbated by drivers returning to their home country during the COVID-19 pandemic, as well as changes to foreign exchange rates making UK a less desirable place to live and work. This, alongside the recent need to manage IR35 tax changes, has also led to significant inflation in driver and transport costs.
COVID-19 complications have also meant that there have been no HGV driver tests over the past year, meaning the expected 6,000-7,000 new drivers over the past year have not appeared. With the return of the hospitality sector we understand that this is a significant challenge with, for instance, order delivery lead times being extended.
It is little surprise, therefore, that the Road Haulage Association (RHA) earlier this month became the latest in a long line of industry spokespeople to write to the government about the driver shortage for trucks. The letter echoed the view held by much of the industry, that the cause of this issue is both multi-faceted and, at least in some aspects, long-standing.
So, many in the industry are in agreement as to the driving factors behind this crisis. But what can be done?
Simply enough, outside of businesses completely reorganising their supply chain network, external support is needed. In the short-term, the government should consider providing the industry with financial aid, and this can also be supported more widely with legislative change.
Specifically, immigration policy could be updated to place drivers on the shortage occupations list, which would go some way towards easing the burden created by foreign drivers returning to their home countries. Looking elsewhere, government should also look for ways to increase the availability of HGV driver tests after the blockage created by the coronavirus lockdowns.
Looking more long-term, steps must be taken to make a career in the industry a more attractive proposition for younger drivers, which will require a joint effort from government, industry bodies, and the sector as a whole. As it stands, multiple sources suggest that the average age of truck drivers in the UK is 48, with only one in every hundred drivers under the age of 25. We must therefore do more to increase the talent pipeline coming into the industry if we are to offset more significant skills shortages further down the line.
On the back of a turbulent year for the supply chain industry, it has become increasingly clear that the long-foretold shortage of drivers is now having a tangible and, in places, crippling effect on supply chains.
Drivers, and the wider supply chain industry, have rightly been recognised for the seismic role they played in keeping the nation moving and fed over the past year under unprecedented strain. If this level of service is to continue, we must now see Government answer calls to provide the support the sector needs, and work hand-in-hand with the industry to find a solution. If we do not see concrete action to this effect soon, we are likely to be in for a turbulent few months.
Rob Wright is executive director at SCALA, a leading provider of management services for the supply chain and logistics sector