Logistics has long been the poor relation of Britain's economy and despite all the breast beating by interested parties not much has changed but who are the real culprits who have given the industry a reputation for low pay, which is a key driver for workplace shortages?
Right now there is a clutch of problems plaguing global logistics but many of these, like the chaos surrounding container shortages and long shipping delays, are short-term. Years before Brexit and Covid 19 the seismic change in the way we all shop exposed the perennial problem of driver shortages, currently estimated at 60,000 in Britain. The ingredients of this shortage were low pay, long unsocial hours, dreadful roadside facilities for drivers to wash, eat and feel secure in their parking compounds, all experiences unknown on the Continent where drivers are treated with more respect.
The factors that led to this parlous state ultimately lie at the door of manufacturers and retailers whose obsession with maintaining good profit margins was at the expense of the 3PLs' margins which were often wafer thin, causing bankruptcies. This is important because much of Britain's goods movement is done by 3PLs often locked into 5-year contracts where they have little room for manoeuvre when their costs rise. In short the 3PLs were screwed long term by their clients and were helped in this by their exploitation of cheaper, foreign drivers.
It has been aired that the labour shortages are being blamed for distress in other areas outside logistics, like in food production, and here the post Brexit return of EU nationals, including drivers to their native countries, is blamed. Such distress, however, is short-term and can be addressed by a mixture of automation and better pay and conditions. In the broccoli picking fields of England, for example, a robo veg picker has been successfully trialled and while costing £400,000 it can replace seven human pickers who can earn up to £30 an hour and such robots are likely to fall in cost when economies of scale improve.
So if we see driver and warehouse operators' incomes rise would the downside by significant inflation? This is a difficult one to call but we should remember that logistics (distribution and storage) forms less than 10% of a product's retail price and when the current, transitory logistics upheavals have normalised it should not be too worrisome. Meanwhile some mea culpa would be in order by the ultimate culprits, namely manufacturers and retailers, who are hoist by their own petard.
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| More respect for drivers would see less of this |
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