How Integrated Logistics can help your business
Q: What are the products and services that you bring to the logistics sector?
JvW: One of the key things that we bring to our clients is a different approach to that of many industry players. If you look at our solutions set, we have some of the best in class supply chain optimisation tools that have been successfully sold many times to some of the largest companies in the world. Encompassing these tools, we have skills and management services that take the information and turn it into supply chain strategies and tactics. We then manage these operationally as part of our service agreement with clients, in order to make sure that their supply chain is operating as optimally as possible. We also try to anticipate, to some extent, the future; understand what we can do to make the supply chain more sustainable and increase performance from a cost point of view. By increasing visibility, we improve our ability to respond to situations that may emerge in the future.
Q: You mention sustainability, which is somewhat of a hot topic at the moment. What are you doing to increase sustainability in the supply chain?
JvW: Sustainability is a concept that not only refers to the environmental issues but also refers to the resilience of the supply chain and the ability of that supply chain to adapt and maintain a very high performance level over an extended period of time. We have a carbon emissions modelling optimisation tool, which is part of our network suite. Beyond that, we have a philosophy that doing green business and doing sustainable business is actually doing good business. It starts with better planning and ensuring that you have, for example, only the requisite number of trucks and travelling only the requisite number of miles on the road at any one time. You then begin to see how an integrated view of your supply chain can be managed with the right tools, the right management services, the right operational methodologies and start to deliver sustainability into the supply chain. Occasionally, new customers start looking at green as only an emissions issue and we believe it goes way beyond that. We are seeing some incredible initiatives and that comes from having a much deeper view of what’s happening in the supply chain.
Q: Is a green strategy becoming a ‘must-have’ for logistics providers and clients alike?
JvW: You can’t put a bid in for a client today that doesn’t have robust sustainability components to it. It is now mainstream. I personally think that not only is it great news for the environment but also great news for clients. Often, a lot of the innovation comes from those smaller supply chain companies where they’ve got a particular toolset, or a particular way of doing business that delivers some of that optimisation, or some of the modelling that’s required for emissions.
Q: How do your logistics services help improve performance?
JvW: If you observed a cross section of companies, not all of them would firstly know that they had an opportunity in transport to improve the performance of the business. Those that are aware of it would start to look at various alternatives and the first one that they typically look at is outsourcing. At a very simple level, the first stage is to try and obtain control of your transport operations. Our entire focus is to ensure that when we work with a client, we’re able to not only recover what we earn from improvements, but make sure that those improvements stay locked in for future years.
Q: What does the future hold for Barloworld Logistics Europe?
JvW: We’re going through a period of integration and consolidation. 2010 is about making sure that we protect our clients so that we keep growing with them as their volumes return. Looking at 2011, it’s about making sure that we’re offering to all our clients across the spectrum, the full range of services that we have. Then in late 2012, maybe look at some aggressive expansion.
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