ELITE formed to represent freight forwarders
A new industry body representing the freight forwarding sector launched this week, following backing from aviation trade association IATA.
The Elite Association of Logistics Networks (ELITE) has announced its official launch yesterday, after the qualification of nine major global logistics networks as founding members.
According to an online statement by the association, ELITE will ‘act as a body to represent the independent freight forwarding community by engaging with and participating alongside major global industry associations, regulators and government agencies’.
Combined membership of ELITE-qualified networks comprises over 3,550 freight forwarding companies around the world, with annual revenues in excess of US$60 Billion and over 140,000 staff operating from 7,000 plus offices in 188 countries worldwide.
IATA’s head of global cargo, Des Vertannes, has welcomed the formation of ELITE, stating that with the industry currently undergoing major changes it is essential that all sectors work together.
“ELITE has the potential to become a powerful and potent voice for freight forwarders around the world. The size and quality of the networks within ELITE ensures that their views will be heard and taken seriously by associations, regulators and carriers. We look forward to forming a close strategic relationship with ELITE and working together to drive new efficiencies for the benefit of us all,” said Vertannes.
A second key objective for ELITE is to provide the global logistics industry with visibility and clarity by differentiating bona-fide, high-quality logistics networks from a growing number of ‘rogue’ networks around the world.
In a statement, the ELITE founding members said: “There are new networks appearing almost daily that do not have the same ideals and standards that ELITE member networks embrace. Many of these networks operate using dubious practices, provide poor quality services, offer unsubstantiated benefits, lack proper financial backing, fail to implement membership vetting procedures and are generally unable to fulfill their stated obligations to their membership.
“This not only damages the reputation of logistic networks as a whole, but also creates much confusion among freight forwarders, shippers and the logistics supply chain. By applying strict membership criteria we are able to provide the industry with a ‘seal of quality’ ensuring that each network only operates to the highest standards.”
The nine global networks to have met the qualifying criteria for ELITE comprise:
1. Global Logistics Network (GLN)
2. Global Project Logistics Network (GPLN)
4. Project Cargo Network (PCN)
5. Time Critical Logistics Alliance (TCLA)
6. Universal Freight Organisation (UFO)
7. WCA Family of Logistic Networks (WCAF)
8. WCA Projects Network (WCAPN)
9. Worldwide Partners Alliance (WPA)
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