• Warren Middleton, Partner |
3 min read

The UK logistics industry faces an acute shortage of skilled drivers due to a combination of Brexit, COVID-19, and long-running challenges within the industry. While the sector could cope while the economy was under lockdowns and overall demand was low, the combination of a rapid reopening and booming demand has strained the capacity of the industry.

  • UK road haulage sector faces an acute shortage of around 100,000 drivers
  • Driver shortfall could continue for at least a year unless further action is taken
  • Supply disruption could mean higher costs, lost sales and production stoppages for businesses

Why is there a shortage of drivers?

Prior to the pandemic, the industry estimated the shortage of HGV drivers at 60,000(The Road Haulage Association (RHA) letter to the PM, 23 June 2021.), fuelled by low driver retention and workforce ageing. The current shortage is not a new issue, but COVID-19 has made things worse. The demand for transport, logistics, and warehouse services has doubled compared with pre-pandemic levels (chart 2), while the supply of drivers has fallen. Staff shortages are being reported across a range of industries of the UK economy as it reopens including the wider logistics sector, however the shortage of drivers is particularly acute due to delays in training and certification for newly qualified drivers. The UK is not alone in facing these challenges.(The 2021 IRU driver shortage survey.)

Nonetheless, with travel restrictions during the lockdown period and concerns about the virus, many drivers from the EU returned home, while those in the UK dropped out of the labour market or retired. As a result, nearly a third of employers in the logistics sector report waiting for over eight weeks to fill a vacancy.

COVID-19 has also led to a backlog of the necessary driving tests. In the five years prior to the pandemic, over 70,000 candidates took a practical test each year on average, with 41,000 passing (chart 3). In 2020-21, fewer than 30,000 tests were conducted, resulting in just 16,000 passes – a shortfall of 25,000 new drivers.

And while COVID-19 has made many drivers leave the UK, Brexit could prevent them from returning. Companies say that 15,000 European truck drivers left the UK in 2020. UK’s new immigration system, which gives priority to skilled workers, excludes HGV drivers from its shortage occupation list. That is exacerbated by the IR35 reforms, which increase the tax burden on drivers working in the UK.

How long could the shortage last?

The UK government has already announced a plan to increase driver tests by an extra 500-1,000 per week. However, at this rate it could take a year to make up the shortfall of tests missed during the pandemic, and to replace the loss of EU drivers. The temporary relaxation in the limit on the number of hours could help, but this is not intended to run past the 8 August; and more importantly could compromise on safety. Other, longer-term measures around training and parking spaces are welcome, but are unlikely to help in the immediate future.

Most importantly, the government has stopped short of announcing any changes to visa policies, such as the seasonal worker visa open to seasonal agricultural workers. The focus of policy is clearly aimed at shoring up a homegrown workforce in this sector.

With analysis showing that nearly one third of HGV drivers are over the age of 55, a truly sustainable solution for the industry will need a major ramp-up in training and staff retention. Innovative approaches using new technologies could help accelerate and lower the cost of training new drivers, addressing some of the barriers to entry that currently exist.

The need for new drivers to be tested and certified means that the issue can’t be fixed overnight. In the short run, the gap between the demand and supply will likely result in higher pay. But absent a more radical solution, it will raise costs for businesses, increase delays and could ultimately throttle the pace of recovery with widespread shortages resulting in lost sales, and forgone output.

HGV chart 2
chart 3