Road freight supply chain – Report Summary

This is a House of Commons Committee report, with recommendations to government. The Government has two months to respond.

Author: Transport Committee

Related inquiry: Road freight supply chain

Date Published: 1 June 2022

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Summary

Since the most severe covid-19 restrictions were lifted, the logistics sector has been unable to fully supply essential goods to the UK’s supermarkets, petrol station forecourts and other marketplaces. At times, motorists have been unable to fill up their tanks with fuel and shelves have been bereft of food. A labour shortage in the logistics sector, exacerbated by an ageing workforce and record job vacancies across many other sectors in the UK economy, has made it challenging to retrain and recruit personnel.

Some links in the supply chain industry enjoy high margins. Other links, including transporters of goods, operate to narrow margins and cannot withstand shocks to the labour market or spikes in cost. Despite this risk of market failure, the supply chain does not operate holistically. This report and its recommendations seek to overhaul the logistics sector and ensure that the supply chain, and its workforce, is more robust and resilient.

Driver availability

A lack of HGV drivers has concerned Government and industry for more than a decade. The covid-19 pandemic turned a chronic problem into an acute one. The unprecedented nature of the recent crisis led the Government to take a more interventionist approach than it has in the past. That change was welcome, but it has largely involved a range of limited and/or temporary measures. We want to see greater ambition, which means the introduction of a coherent strategic plan.

The Government’s approach could also give the false impression that the issue of driver shortages is for the Government alone to fix. Whilst it has a role to play, the private sector must put its own house in order. The Government must force the pace and end years of industry inertia. One step the Government should take straightaway, as part of its review of the Driver Certificate of Professional Competence, is to ensure the logistics sector funds its own driver training, as is common practice in the bus and coach sector.

Retention

Driving an HGV is a challenging job. The way in which drivers are treated and the conditions in which they are required to work can exacerbate those pressures. Unless these conditions improve, retention rates will remain low. The Government, in consultation with the sector, should devise a binding code of conduct setting minimum standards for employers’ treatment of HGV drivers.

A key reason drivers do not stay in the sector is the lack of high-quality rest facilities, especially on key road freight routes. This lack of capacity is not new; the Department’s previous lorry parking survey identified it five years ago. It means some drivers are forced to stay overnight in unsuitable locations. This leaves drivers vulnerable to crime and is not conducive to rest and recuperation. To fix this problem the Government should:

  • Reform the existing planning framework to ensure that decisions for new driver facilities are not left to individual planning authorities who cannot be expected to elect to provide for lorry parks in their local plans in the face of opposition from residents impacted by such large projects.
  • Set regional targets for building additional parking capacity, with a joint Government-industry taskforce to ensure these targets are met.
  • Speed up negotiations on new leases with motorway service operators operating on Government-owned land so they have the security of tenure to invest in upgrading their facilities.
  • Set minimum quality standards for driver facilities covering security, toilet and shower facilities, food options and services for female drivers.

These steps alone may not solve the retention problem as the fragmented nature of the road haulage sector makes it difficult for logistics operators to act in a concerted fashion to improve conditions. The actions of a few large companies, such as the major supermarket chains, exacerbate this. These companies use their market power to drive down costs but take no responsibility for the consequences. So far, despite a lot of warm words, the sector has failed to address this. Radical, sector-wide action is required to end this cycle of failure.

The Government should give the logistics sector two years to deliver sufficient drivers and high-quality parking facilities. If industry does not deliver, the Government should introduce a Supply Chain Levy on those at the production and sales end of the supply chain, such as large retailers, oil companies and online service giants. This levy would require the parts of the supply chain where margins are greatest to deliver improved standards and the resilience to the supply chain which they themselves require to ensure their shelves, warehouses and petrol pumps are full.

Recruitment

While the sector is perhaps more open to female drivers than in the past, it has largely failed to attract a younger and more diverse workforce. It is disappointing how little progress has been made since our predecessor Committee raised the same concerns five years ago and this should be a source of shame for the sector. It must redouble its efforts to attract and retain a diverse workforce.

The sector has struggled to make apprenticeships work as an entry point. Therefore, we welcome the introduction of “skills bootcamps” as a faster, more flexible route to becoming an HGV driver. The Government should make these bootcamps permanent, with part of the scheme targeted at underrepresented groups in the current workforce. That policy could be funded from the sector’s apprenticeship levy contribution.

Infrastructure

We welcome the steps the Government has taken to get more freight off our roads and on to our rail and waterways, but there is still more to do. The Government should work with industry to move towards a multi-modal model in which long distances are served by rail and water and shorter journeys by road. This will not only help the country meet its decarbonisation goals but improve the lives of HGV drivers who would spend fewer nights away from home. This must happen alongside steps to decarbonise road freight itself.

The introduction of the EU’s new Entry/Exit system later in 2022 threatens to cause further confusion, disruption, and delay at the UK’s border, particularly at the Port of Dover. It is crucial the Government gets a grip of this issue and engages urgently not just with the European Commission but with its counterparts in France and Ireland whose trade could also be disrupted if a solution cannot be found.