Widespread call for Juncker to set fuel economy standards for EU HGVs
Fuel efficiency standards for heavy-goods vehicles (HGVs) in Europe would save billions for businesses, reduce the price of goods, protect the environment and boost energy independence. 19 global brands, logistics companies and green organisations, including IKEA, Nestlé, Philips, DB Schenker and Deutsche Post DHL, have told European Commission president Jean-Claude Juncker.
Simply monitoring truck CO2 emissions would not be sufficient to kick start the market for ultra-fuel efficient trucks in Europe, they wrote in a letter that called for post-2020 fuel efficiency for new trucks and trailers.
Road transport currently accounts for one-fifth of Europe’s carbon emissions, and while trucks make up less than 5 percent of all vehicles on the road, they are responsible for 25 percent of road transport’s fuel use and carbon emissions. Meeting the EU’s 2030 climate targets as well as the more challenging targets of the Paris climate deal will require major efforts in the road freight sector, the companies and organisations said.
Bart Vandewaetere, Nestlé’s Assistant-Vice President Relations with European Institutions, said: “Nestlé is working, together with our supply chain partners, to cut fuel consumption and GHG emissions from transport by another 10 percent by 2020 (versus 2014), on top of already made reductions.
“We do this by efficiency optimisations such as routing, avoiding of empty runs and using at maximum the available vehicle capacities. Increasing the fuel efficiency of trucks will give the transport industry the required boost to further reduce overall CO2-emissions after 2020, when most of the other options have been fully exploited.”
Ewald Kaiser, CEO of DB Schenker Region Europe and Member of the Board Land Transport, said: “Political framework decisions should provide balanced incentives for best-in-class performers in order to drive innovation.”
William Todts, freight director at sustainable transport group Transport & Environment, said: “Commissioner Cañete has said truck CO2 standards are essential and he’s right. More fuel efficient trucks will save hauliers money, boost the economy and protect the environment. It’s time for the Juncker Commission to follow the example of the US, China and Japan and set ambitious truck fuel economy standards.”
The letter calls on the European Commission to make a proposal to introduce standards within the next two years.
SOURCE: [Transport and Environment]
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