For several years now, experts have been pointing to an impending shortage of skilled workers in various economic sectors. This is why the current shortage of drivers in the transport industry has not come as suddenly as some people think.
The transport and logistics sector has long been considered particularly vulnerable. Many companies are already complaining about an acute shortage of drivers, not least due to the war in Ukraine. How will this development continue? What solutions are there?
THE CURRENT PERSONNEL SITUATION IN THE TRANSPORT INDUSTRY
Transport and logistics companies are complaining about a worsening shortage of drivers. Previously, there was talk of a shortage of around 40,000 drivers. This shortage has now worsened. Some skilled workers have given up their jobs during the coronavirus crisis and looked for alternatives.
A recent economic survey by the DIHK (Association of German Chambers of Industry and Commerce) paints an increasingly bleak picture of the staffing situation in the transportation industry: over 70 percent of the companies surveyed complain about staff shortages.
This situation has deteriorated further since February 2022 due to a ban on Ukrainian men leaving the country. The driver shortage is spreading, and the situation is not limited to Germany. In the wake of Brexit in the UK, the sight of empty shelves was a clear signal of what staff shortages can mean in the transport industry.
Expressed in figures, the shortage of skilled workers in Germany represents a shortfall of up to 80,000 drivers. Across Europe, there are around 400,000 vacancies to be filled in this area.
Around 75 percent of drivers currently employed in the logistics and transportation sector in Germany are over 55 years old. The numerical ratio between drivers who retire and those who complete their training is extremely unfavorable. While around 40,000 drivers retire every year, an average of 16,000 complete their training.
Job loss
This development is putting jobs in the entire industry at risk. Once a driver’s job has been lost, it becomes difficult to re-establish it. This also affects neighboring industries that are particularly dependent on the services of the transport sector.
Order rejections
According to many of those affected, the lack of qualified personnel is jeopardizing the sales expectations of transport companies. They are currently having to turn down customer inquiries even when the order situation is good to very good because there are not enough staff available. This is a problematic development at a time when supply chains are also suffering from other bottlenecks such as material shortages.
Tough battle for personnel
Companies in the transport and logistics sector are competing ever more fiercely with each other for workers. In this battle, smaller and medium-sized companies in particular can fall by the wayside. They are unable to cope with the increasing demands on salaries and working conditions.
Lack of cargo space, supply and alternatives
The shortage of skilled workers is jeopardizing growth targets in the industry. There is an acute shortage of loading space, which is increasing transport times and prices for customers.
In macroeconomic terms, the consequences of a further shortage of drivers cannot yet be foreseen. Serious supply shortages are possible, even for essential goods such as food. EU goods traffic is affected overall.
There is (still) no rail alternative to many road transports. Goods that reach the transshipment points on the coasts by sea in containers, for example, often still have to be transported onwards by truck. Moreover, rail transport will soon reach its capacity limits at its current level of expansion. Experts currently place this capacity limit of the railroads at around 130 billion tonne-kilometres.
The figures from the Federal Statistical Office for 2020 make it clear: around 120 billion tonne-kilometres by rail compared to around 487 billion tonne-kilometres by road. Overall, over 70 percent of freight traffic in Germany is transported by road.
THESE ARE THE REASONS FOR STAFF SHORTAGES
A wide variety of factors affect the personnel situation in the transportation and logistics sector:
- Freight volumes have been rising steadily for years. Since 2013, statistics have recorded an annual increase of at least 1 percent. Among other things, increasing digitalization and globalization have contributed to this. In themselves, these are positive economic factors that are increasing the demand for transport services.
The higher volume of trade is changing the demands on transportation services. Goods need to be transported from A to B ever faster and consistently on time.
- Many industries have abandoned comprehensive warehousing in the wake of digitalization through just-in-time processes. This includes the dissolution of local warehouses in cross-border freight transport. These developments are also creating more demand for freight transport by road.
- Compared to rail, freight transport by truck often proves to be cheaper. It is not yet clear how this situation will change with rising fuel prices. Modern trucks are much more economical than older models.
- What’s more, many drivers in the transport industry can no longer afford this profession personally and no longer want to: Low salaries, poor working conditions and increasing stress on the road do not make the profession attractive. Those who find an opportunity to change will switch.
In the training sector, many young people choose a different job from the outset. Many people today, especially young people, have different ideas about a balanced life. They are no longer prepared to spend almost their entire lives on the street, far away from family and friends.
- The image of the driving profession is still poor. It is not only the direct working conditions, but also the entire environment that puts a strain on those affected. A poor parking situation and repeated truck jams at European borders contribute to the unpopularity of the profession.
- Bureaucratic requirements and rising crime on the road are putting a strain on drivers on the roads throughout Europe.
- The situation on the labor market is currently difficult for many sectors overall in order to compensate for the shortage of skilled workers in the transport industry. In times of low unemployment figures, there are not enough available workers who would be interested in working as drivers. Labor is currently a sought-after resource. The logistics industry, with its tough working conditions and low wages, is struggling to retain existing skilled workers and attract new ones. It cannot always compete with what other industries have to offer.
- The war in Ukraine has further exacerbated the shortage of skilled workers in the transport industry. Insiders lament the loss of potentially over 100,000 drivers from Ukraine. This loss jeopardizes around 7 percent of the total transport volume in Germany. The longer the war lasts, the more difficult the overall situation becomes.
POSSIBLE SOLUTIONS
Various players are trying to counteract the shortage of skilled workers in the transportation industry at different levels:
- Some companies are focusing on more attractive salaries and working conditions. There is a competition here between large and small transport companies. It is not uncommon for the smaller ones to fall by the wayside because they cannot pay higher salaries.
- Increasing the efficiency of transportation is also an issue. Transport companies are increasingly working with their customers to ensure the reliable and timely delivery of goods with a reduced number of drivers through bundling.
- Truck drivers are better trained to deal with the increasing automation of truck transportation. This also improves the esteem and image of the profession. Companies are increasingly offering further training and promotion opportunities for drivers.
- Automation could also help to alleviate the shortage of skilled workers in the industry in the medium to long term. However, there is still a long way to go before driverless trucks are technically mature. For a long time to come, automated vehicles will have to be accompanied by at least one person.
- The government is trying to create a more attractive environment for drivers by regulating driving times and working conditions. There are also attempts to facilitate labor migration in this area.
Many companies are currently looking for drivers from abroad. However, the search is proving difficult. Driver shortages are a pan-European problem. The countries are in competition with each other.
- Many companies are breaking new ground in the recruitment of skilled workers. They make attractive offers to potential drivers on social networks. Short-term contracts are also offered to give interested parties the opportunity to “get a taste” of working as a driver. The companies hope to be able to recruit some people for a permanent position after the “taster phase”.
- The transport industry is not alone in coping with the shortage of skilled workers. It is not for nothing that transport and logistics companies are regularly considered as a whole. What is needed is even closer cooperation in all areas of transport and logistics.
The more effectively all those involved work together, the more effective the entire transportation system will be. In this way, the required service can often be provided with fewer personnel resources. This is a feat of strength for everyone involved in the company, but it helps to safeguard transportation and logistics as a whole.
- In the event of an acute shortage throughout the industry, prioritization of transport could play a greater role. Here, simple consumer goods would have to take a back seat to essential supplies. This is not an optimal solution, as it is detrimental to overall economic growth.
Such a classification of transportation into “vital” and “non-vital” is therefore only a stopgap solution in the event of an intensified crisis. However, such considerations could become increasingly relevant in view of the continuing rise in fuel prices.
- The effects of the fuel and energy crisis have not yet been taken into account in this article. What can be expected here will only become clear by the end of the year and beyond. What is certain, however, is that the transport industry will continue to be burdened by rising fuel prices. It will have to pass these prices on to customers, which will increase the general price increase.
- The expansion of rail transport is often seen as a solution to reduce the demand for truck transportation. Measures in this area are lengthy and expensive. Furthermore, there is no guarantee that more rail transport will be in demand if rail capacity is increased.
Price and infrastructure conditions as a whole play a role here. For many industries, transportation by rail is still the simpler solution. This is primarily because road transportation is accessible from almost everywhere. In future, clever infrastructure concepts will be required, which will have to be developed by transport planners for the whole of Germany.
CONCLUSION: THERE IS NO ONE SOLUTION
There is no single solution that can solve the shortage of skilled workers in the transportation industry. Only a combination of short and long-term measures can provide a remedy. It is not certain whether the shortage situation can even be eliminated in the next five years.
Forecasts are dependent on various factors such as general economic development and the resolution of various acute crises. In the current situation, it is not even certain how demand will develop next year. Inflation, the energy crisis and supply bottlenecks are putting a strain on industries and people. An economic crisis may lead to a slump in consumption and reduced demand.
All in all, these are not good prospects, because although they do not further exacerbate the problem of the shortage of skilled workers, they cloud the overall growth prospects of the transport industry.
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