Shortage of HGV drivers could impact Christmas deliveries
26 November 2014
Consultancy KPMG is the latest voice to warn driver shortages could hit retail fulfillment this Christmas.
Earlier this month Transport Secretary Patrick McLoughlin said ‘shoppers should buy their presents quickly’ due to the potential crisis, while HSS columnist and blogger Geoff Dossetter highlighted the issue back in September, focusing on DriverCPC issues and other longer term trends.
KPMG said with more and more retailers’ offering customers later "guaranteed delivery dates”, some as late as 24-48 hours before Christmas day, there is concern that the recent shortage of HGV drivers will lead to parcel companies not being able to deliver.
Justin Zatouroff, global head of post and express at KPMG said: "The Christmas package delivery peak roughly doubles average daily volumes at this time of year, but these potential driver shortages mean that not all retailers will be able to fulfil their delivery promises to customers. Some retailers may be forced to bring forward their last online order dates so that they are able to guarantee delivery before Christmas. However, this could see them miss out on the lucrative last minute surge in online orders before the big day.
"Ultimately there are a number of choices faced by the retail supply chain, be it retailer or logistics supplier. They can sacrifice service, they can increase the costs base or they can seek alternatives, the answers are not obvious.
"The most likely blockage point seems to be the hub to depot delivery and this is where driver shortages become a reality. The solution, with appropriate pricing, may be to use subcontractors with the extra resource and capacity to help fill the gap.
"Retailers also need to prepare themselves for the inevitable wave of product returns and exchanges. In some cases this can be in excess of 30% which will put considerable strain on courier’s capacity.”
Long term problem
The Freight Transport Association is warning that the problem of driver shortage is a long term issue and not just one that is going to affect the festive season.
Sally Gilson, FTA skills policy manager said: "FTA has long voiced its worries regarding driver shortage and is calling on the government to support the freight industry with funding in order to encourage new drivers to enrol in the logistics industry.”
Delegates attending the FTA Transport Manager Conference series were asked to answer a ‘snap-shot’ survey relating to their own freight operations and were asked: "On a scale of 1-5 how bad is the driver shortage?”
• 67% of respondents in Durham said that driver shortage is ‘very bad – and that it will be a major issue’.
• 60% delegates in Warrington replied that ‘it is bad and could impact Christmas deliveries’.
• 57% of attendees at the Dunblane event said that it is ‘a potential problem in the longer term’.
The Association estimates that the number of drivers that will need to be recruited over the next few years exceeds 45,000.
Ms Gilson concluded: "It is clear that from the FTA survey that the issue of driver shortage is one of genuine concern. This is the busiest time of the year for many businesses. Thanks to the e-commerce explosion with so many people buying goods online it is only going to get busier. It may appear that there are more ‘trucks on the road’ but they are simply trying to deliver the goods ordered. The simple fact is that this is a case of supply and demand but the real problem is that there simply aren’t enough drivers to meet it."