Labour Surcharge

The current HGV driver shortage crisis has made headlines throughout the country as numerous major retailers experience supply chain issues and warn of further shortages of products on the shelves. As a business, Willmotts Transport has proactively looked at how we combat the driver shortage and ensure the continuation of supply for our customers.

What is happening in the logistics sector? 

Globally, many suppliers reduced capacity or shut completely during the pandemic and cannot scale back up quickly enough to meet the demands of recovering economies and this situation has been exacerbated by Brexit red tape.  But even when the product itself is available, the labour to pack and physically distribute goods is in very short supply, and consumers are starting to wake up to how vital the logistics industry is to the economy.

The driver shortage has become a national crisis.  Conservative estimates are that the UK transport industry is short of about 100,000 drivers due to a perfect storm of the end of Covid restrictions; the impact of Brexit leading to many EU drivers returning home, the lack of testing during Covid, the introduction of IR35, so-called ‘pingdemics’ preventing drivers coming into work and all of this combined with a historical perception of low pay and poor welfare conditions which has deterred new entrants from considering a career in the industry.  The issue of labour resources is not restricted to drivers, and is also impacting warehouse operators, forklift drivers and many others involved in the supply chain.

What are Willmotts doing to help solve the problem?

Willmotts have always valued our operations teams very highly and offer good pay and conditions appropriate for the professionalism of the job.  We have invested in new vehicles to ensure that our drivers have premium equipment to enable them to carry out their job to a very high level.  We are proud of our expert warehousing and distribution team, and even more so for the way that they have risen to the challenges both during the Covid pandemic and now that we are in an exceptionally busy and pressured period.

It is perhaps ironic that we were deemed as ‘Key Workers’ when times were at their worst and suffered some of the biggest consequences of this pandemic to keep the wheels turning and the shelves stocked. We have highly professional HGV drivers who undergo significant qualifications to carry out their job. As a company we encourage new drivers into the industry and have schemes such as VAN TO CLASS 1, which is designed to bring new entrants to our business with a standard car licence and enrol onto our training and development course to become a full C+E professional driver.

In common with every other distribution company, we have seen increased demand at a time when the labour resource is exceedingly stretched.  We are actively recruiting new drivers all the time, however the pool of professional drivers has diminished and drivers are, quite rightly, seeking employers who offer the best pay and conditions.  The Government’s response to temporarily extend driving hours is not one that we will adopt, as it does nothing to address the core issues.

Long-term, the Government has published a plan to resolve the problems by introducing a renewed apprenticeship system for HGV drivers and improving the treatment of drivers at collection and delivery points, among other actions – unfortunately it will take years to influence today’s issues.

What is going to change?

The immediate problem of the availability of both HGV drivers and other operations staff is likely to worsen during the forthcoming months, and in order to continue to retain and recruit our workforce, and to ensure our customers’ freight is delivered, we will need to ensure that our salary packages align with other transport operators within the industry.  Our pay levels have already increased substantially, with further increases anticipated which will have added in excess of £1M to our labour costs.  Despite our efforts, we have still lost highly valued team members and are conscious that we may need to flex our rates accordingly during peak months to ensure we continue to pay market rates and can therefore maintain service levels for our valued customers. 

We fully appreciate that any rate increase, however presented, is always unwelcome.  But it is not sustainable to do nothing or to park up trucks indefinitely, and we need to pro-actively manage an exceptional situation which is still evolving and likely to become more difficult until the supply and demand of labour resources balances.  Our intention is therefore to adopt a ‘labour surcharge’ which is directly applicable to operations salaries, this is in line with other operators who are also introducing similar contingency measures and will be a variable structure very similar to the more established fuel surcharge invoices and reviewed on a monthly basis. 

This is a responsible measure designed to deal with the immediate labour crisis and aimed at ensuring continuity of service to our customers as we all navigate through these turbulent times.  

Please contact us for more details of our Labour Surcharge.