Insights
Here are the problems we are facing:
1. Skill Shortages in the Logistics Industry
Addressing skill shortages remains an enduring challenge for the logistics sector, a problem that continues to escalate annually. According to estimates from The Road Haulage Association (RHA), the UK faces a shortage of approximately 50,000 HGV drivers. Many factors converge to compound this issue.
Ageing Workforce:
Many workers in the logistics industry are getting older, with a big proportion of them over 50. As these experienced workers retire, there aren't enough young people stepping in to take their place, especially in important jobs like HGV driving. This shortage of young workers is a big problem that needs fixing fast to keep the industry running smoothly.
Lack of Awareness:
Lots of people don't know much about the logistics industry, and it's seen as not very interesting, partly because the government doesn't classify jobs like HGV driving as skilled work. This means fewer young people are interested in working in logistics, which creates a cycle of fewer new workers entering the field. We need to change the way people see logistics and show them the great opportunities it offers.
Brexit Impact:
A fall in UK net migration is a 'major threat' to the logistics sector which is already struggling to recruit staff, says the Freight Transport Association (FTA). Since Brexit happened, it's become harder for the logistics industry to hire workers from the EU. This adds more pressure on an industry that's already struggling to find enough staff. Companies in logistics need to quickly find new ways to get the workers they need to keep things running smoothly, despite the challenges brought by Brexit.
2. Lack of roadside facilities
Logistics drivers play an indispensable role in our economy, sustaining the seamless flow of the supply chain across the UK and Europe. Yet, the prevailing conditions of inadequate roadside facilities fail to acknowledge this crucial contribution. We urgently require enhancements to driver facilities, encompassing fortified security measures, enhanced parking provisions, and superior amenities.
According to estimates from the Road Haulage Association, there is a deficit of 11,000 HGV parking spaces. Furthermore, data indicates that the utilisation of existing lorry parking spaces stands at 83% nationally, with certain regions soaring to 93%. Consequently, drivers are compelled to resort to roadside stays due to the scarcity of secure and safe parking spots and welfare facilities. This leaves them without hygiene amenities and puts them at risk of freight crime.
3. Environmental pressure
Both the UK and EU are escalating efforts to cut carbon emissions, including a focus on reducing greenhouse gases from Heavy Goods Vehicles (HGVs), which account for about 4.3% of emissions in the UK. As awareness of this issue spreads, the logistics industry faces mounting pressure to adopt greener practices. Companies are increasingly choosing eco-friendly logistics providers for transportation. Failure to do so could result in missed business opportunities in an increasingly environmentally aware market.
In addition, the EU is expanding its emissions regulations to cover large ships entering its ports, and introducing measures like the Carbon Border Adjustment Mechanism (CBAM) and stricter reporting requirements for emissions. These changes are pushing supply chain operations to adapt quickly and invest in sustainable practices.
Meanwhile, Clean Air Zones are becoming more common in the UK. These zones aim to reduce pollution by enforcing specific emission standards for vehicles. Logistics companies must upgrade their fleets to comply with these standards or face significant charges.
Learn how logistics companies can boost sustainability. Check out our recent newsletter for practical tips on becoming more eco-friendly: https://baxtersgroup.com/news?s=2024-04-22-sustainable-logistics-advancing-environmental-responsibility-in-supply-chains.
4. Worldwide issues
Over the past four years, the world has faced some major unfortunate events that have greatly influenced the logistics industry:
Firstly, the COVID-19 pandemic didn't just disrupt supply chains—it accelerated existing challenges and highlighted the urgent need for visibility, resilience, and digitisation. While some sectors, like life sciences, coped better, others faced unprecedented disruption.
Then there's inflation, which brought capacity constraints, price hikes, supply chain instability, longer lead times, and container shortages. These disruptions triggered ripple effects, driving up logistics costs, fuelling inflation, and eroding consumer purchasing power.
Furthermore, conflicts like the Russia-Ukraine tension and Gaza strife strained logistics routes even more. Ports in the Black Sea region were stretched thin, facing increased pressure due to surges in imports and labour shortages. Major ports like L.A. and Long Beach dealt with historic backlogs, leading to higher marine insurance costs, fuel prices, and longer transit times—all contributing to escalated logistics expenses.
On top of all this, strikes and protests in countries like France and Germany added another layer of complexity. These disruptions caused delayed deliveries, higher transportation costs, and, in some cases, complete supply chain paralysis for businesses operating in affected regions.
In summary, the logistics industry confronts significant challenges, including skill shortages, inadequate roadside facilities, environmental pressures, and global events like the COVID-19 pandemic and geopolitical tensions. These hurdles demand strategic solutions, emphasising the need for adaptability, resilience, and sustainability in navigating an increasingly volatile landscape.
Contact us today for all your sustainable logistics needs:
+44 (0)1902 492205
sales@baxtersgroup.com
Sources:
https://www.rha.uk.net/Campaigns/Net-Zero
https://faganwhalley.co.uk/the-top-five-logistical-challenges-in-2024/
