How logistics became an essential service during COVID-19
Whether delivering essential Personal Protective Equipment (PPE) around the world or supporting small- and medium-sized enterprises (SMEs) as they adapt their business operations, the logistics sector has helped ensure the global flow of goods and has provided an essential service for our society during this unique time in our history.
As lockdown restrictions begin to ease across major European cities, it is time to ask ourselves what the ‘new normal’ will look like and what changes we want to see from a pre-pandemic world. Many will see it as an opportunity to reset and re-evaluate their operating model. Too often, logistics is overlooked as a crucial cog in this model, allowing businesses, individuals, and societies to connect and grow together.
The pandemic has highlighted this need for connection more than ever before, underlining our reliance and dependence on technology to keep the economy moving. It has also demanded agility and, with over 47 years of experience in implementing contingency plans, FedEx has been able to respond quickly, making the necessary adjustments to minimise impact to our customers.
FedEx has played a critical role in transportation of COVID-19-related supplies, including but not limited to PPE, clinical trials, and medical equipment into and across Europe, and around the world. We’ve delivered over two million face masks across Norway, over five million masks from China to Belgium and have also shipped over 2,000 protective screens to shops and pharmacies across the UK, to name a few.
During the pandemic, we’ve seen the need for a connected supply chain become ever more apparent. One small breakdown in a complex network can have a major impact for businesses during uncertain times. A connected supply chain will help ensure visibility for every link in the network, allowing all parties to respond to any possible changes to the shipment. For example, the pandemic has driven a rise in demand for business-to-consumer trade, with some domestic suppliers struggling to keep up, while urgent shipment of medical supplies internationally has added to this pressure. Thanks to a connected supply chain network, FedEx has been able to prioritise handling of medical and humanitarian supplies for our partners and non-profits, while continuing to support existing customers.
As a direct result of the information-intensive nature of our operations, FedEx has been able to quickly respond to this shift in demand. We are one of the few companies globally with the capability to keep commerce moving while responding to the added demand for emergency aid. We are protecting our customers’ base volumes to the greatest extent possible and working together to find solutions, something which is especially important for the millions of small businesses that depend on us.
If recovery from this pandemic offers an opportunity to reset our ways of working, it is time to bring the essential role of logistics to the forefront of everyone’s minds. Without the agility, flexibility and efficiency of essential service providers, we would be facing a radically different situation in terms of supporting those who need it most. Robust logistical networks will continue to connect countries around the world, ensuring the flow of goods and commerce as we face an uncertain economic future.
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