Could a lack of HGV drivers put the brakes on economic growth?

Posted on 7 Feb 2020 by The Manufacturer

The overwhelming majority of logistics operators rank the endemic lack of drivers as having the most impact on their business. Does automaton and technology hold the key to overcoming the shortage? Ian Cranidge reports.

If roads are indeed the arteries through which the economy pulses, then heavy goods vehicles are the red blood cells. Almost every organisation, regardless of size or sector, relies on transport and logistics to keep their business going.

More than 1.4 billion tonnes of goods were transported in the UK in 2018, from food products and construction aggregate, to recyclable materials, chemicals and livestock.

Boxes On Conveyor Belt shutterstock_551413036

Despite its vital importance, however, the UK logistics sector faces an ongoing challenge – recruitment.

The overwhelming majority of operators rank the endemic lack of drivers as having the most impact on their business, according to Barclays’ 2019 Logistics Confidence Index.

This shouldn’t come as a surprise given the continuing challenge to attract younger people to replace an aging workforce of drivers and the negative impact of Brexit on EU nationals working in the UK.

  • The average age of an HGV driver in the UK is 48
  • 47% are over 50 years of age, and just 1% are under 25
  • 13% of HGV drivers working in the UK are EU nationals
  • 15% of current HGV driver vacancies won’t be filled in 2019
  • Long delays are expected to fill a further 36% of current vacancies

All figures c/o the Freight Transport Association

To address these skills shortages, Barclays’ Logistics Index found that the most popular measure taken by respondents in the past 12 months has been offering improved pay and conditions.

This was followed by those who say they have worked with younger people or introduced an apprenticeship scheme, and those who have enhanced the volume and quantity of training.

Overcoming driver shortages

While most of these findings are consistent with results from previous years, the 2019 survey also suggests logistics operators are beginning to consider technology as a viable solution to recruitment problems.

As with last years’ survey, the main technology focus for most operators (23.3%) is upgrading or replacing their existing resource planning, warehouse or fleet management systems.

However, a small (but growing) number of businesses are also showing a greater interest in technology as a solution to driver shortages.

HGV Drivers - Logistics and transportation of Container Cargo ship and Cargo plane with working crane bridge in shipyard at sunrise, logistic import export and transport industry background

While the use of drones in the short term is largely dismissed, there is a small but significant increase in those respondents who expect the use of driverless trucks or ‘platooning’ to have the greatest impact on their business over the next three years.

This could simply be down to greater awareness of driverless technology through media coverage of ongoing trails. Below are just three examples from around the world:

  • In Spring 2019, a driverless electric truck – the ‘T-Pod’ – begun making deliveries using public roads on a Swedish industrial estate, with estimates of a 60% reduction in road freight operating costs compared to a diesel truck with a driver
  • The US Postal Service is testing self-driving trucks on a 1,000-mile mail run between Phoenix and Dallas. (Whether or not these autonomous lorries will in fact be genuinely driverless in the short term is debatable as the trucks still have a safety driver to intervene if necessary)
  • Last month, Hyundai started testing truck platooning technology on the Yeoju Smart Highway in Korea – a 4.5-mile stretch developed by the Korean government specifically for autonomous driving research and simulates real-world driving conditions.

While driverless trucks are moving closer to becoming a reality, it seems likely – given the sizeable investment associated with such a transition – that the early adopters of such technology will be larger operators.

However, there is another area ripe for automation that is within reach of a far greater number of businesses – warehouse operations.

View of a Logistic delivery service application on a warehouse background 3d rendering - image courtesy of Depositphotos.

Image courtesy of Depositphotos

Warehouse automation

Barclays’ 2019 Logistics Index found that while logistics operators don’t see technology bringing big changes to warehouse operations in the short-term, they expect it to be increasingly important over the coming 10 years.

As always, there are those businesses who are already embracing the opportunities.

Below is a snapshot of the early-adopters:

  • Multinational sportswear manufacturer, PUMA, has launched a pilot project to create what it describes as the “world’s first intelligent and decision-making warehouse” populated by robots capable of picking up individual objects, as opposed to standardised loading units like trays or boxes. These “perception-controlled” robots use software, sensors, cameras and AI to interpret their environment and work either alongside people or independently.

  • The UK designer and manufacturer of cutting-edge electro-mechanical systems, Tharsus, has been working with online supermarket Ocado to develop a “game-changing” automated hive system featuring thousands of robots retrieving crates of groceries for beneath a grid structure. Deployed in Ocado’s customer fulfilment centres (CFCs), the hives are helping maximise the efficiency of deliveries and significantly reducing order picking times from hours to minutes.

  • Brose, the world’s fourth largest family-owned automotive supplier, has invested nearly £2m on the introduction of Automated Guided Vehicles (AGVs) over the past two years and the business is already reaping the benefits. The business’ Coventry factory has fully embraced the driverless technology in order to accelerate the movement of finished goods and reduce the prospect of human error. Using a bespoke transport guidance system, the AGVs are able to communicate with each other to ensure materials are moved efficiently through the warehouse – whether being stored for future use or sent directly to shipping lanes.

The shift towards warehouse automation technologies such as collaborative autonomous pickers, inventory management robots and increasingly sophisticated software automation should release staff from more repetitive, physically demanding, low-skill roles, providing them with the opportunity to retrain and upskill.

More than 80% of Barclay’s respondents expect that less than 10% of their operational-based warehouse workforce will be replaced by technology, automation and robotics in the next five years.

More long-term, however, the findings show that 43.2% of respondents expect technology, automation and robotics to replace 10% – 29% of their workforce within 10 years, with nearly 18% predicting it will replace somewhere between 30% – 49% of their staff over the next decade.

These figures reveal that as logistics businesses increasingly turn to technology in an effort to overcome their workforce challenges, how these technologies are integrated into their operations and the knock-on effect it has on employees (and how that is positively managed) will prove key.

I’d love to hear your thoughts, so please connect with me on LinkedIn.

Ian Cranidge is  Relationship Director and UK Head of Transport and Logistics at Barclays Corporate Banking