Sharp ■ Informed ■ Challenging
7.2.22
NEWS INSIDE Appeal rejected
Scania cartel fine confirmed p3
SAVING 8% IS SUPER
Digital revolution
Gregory Distribution integrates new brands
p4
We have the technology
Teesside University and TAP take high-tech approach to greening urban deliveries p6
OPERATORS INSIDE ARR Craib ..................................................... p4 Cullimore Group ...........................................p18 DHL .............................................................. p4 DigiHaul........................................................ p4 DX Group....................................................... p4 EFS Global..................................................... p3 Freightlink Europe........................................p18 Gees Haulage................................................ p3 Gregory Distribution ...................................... p4 Miniclipper Logistics ..................................... p4 Pallet-Track .................................................p18 Pollock (Scotrans)......................................... p4 REL Haulage.................................................. p3 Roy Bowles Transport...................................p18 Tyneside Express Transport............................ p3
HOT TICKET: Registrations are now open for the Road Transport Expo 2022 (RTX) taking place from 30 June to 2 July at NAEC Stoneleigh. This exciting three-day event promises to make your summer sizzle with the latest trucks, trailers, tankers, tippers, bodies and everything you need for your fleet. Not only that, but we are putting together a fantastic line-up of industry speakers and experts who will give you the know-how you need to help your business excel. To find out more about the show, see page 8. You can register to attend for free at roadtransportexpo.co.uk
As pay rates soar, hauliers insist regulation is needed to address safety and liability issues
Driver agencies in the spotlight By Carol Millett
Operators have demanded driver agencies be regulated by government in a bid to raise standards. The call for greater regulation follows rises in driver agency rates of around 20% over the past year, driven up by the shortage crisis, the IR35 tax reform and the introduction of pay parity last year. Currently there is no requirement for driver agencies to be accredited to any governmentregulated scheme, which hauliers argue is an oversight that undermines road safety by allowing agencies to avoid liability. Leslie O’Brien (pictured), director at Freightlink UK, is calling for a government-approved scheme similar to FORS for driver agencies. She told MT: “Anyone can set up a driver agency, with no knowledge of the Highway Code, drivers’ hours regulations, the Working Time Directive, or
tail-lift regulations – and with no obligation to ensure the driver is trained to a certain standard. “If my drivers get it wrong we would be up before the traffic commissioner with our operator licence and our reputation at risk, but right now driver agencies have no liability. I would like to see agencies also subject to public inquiry.” Dave Patten, group MD of Abbey Logistics, added: “We pay
a premium for this service, so we do not expect the bottom of the barrel. Agency rates have gone up considerably – we are prepared to pay, but we should be able to expect properly trained, polite, clean, courteous drivers, who are accountable, take responsibility and get the job done.” However, Kieran Smith, chief executive of driver agency Driver Require argued that government regulation is unnecessary. He wants hauliers to help raise standards by requiring the driver agencies they use to join the Logistics UK Driver Agency Excellence Scheme (DAE). Smith took on the role of governance chairman of the scheme in October last year. “This is a rigorous test of the agency’s specialist driving knowledge, capability, processes and systems,” he said. “It’s a ‘no brainer’ for hauliers to ask for this because it costs them nothing and
requires only a couple of lines to be inserted in their agency terms. In exchange they get a significant improvement in their agency quality and service levels.” n For more reaction, see our haulier Vox Pop on page 6.
search Scania super
News Extra: Countdown to RTX p8 Business barometer p10 Viewpoint: Time to switch p12 Covid-19: The recovery begins p16
News
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EU General Court finds EC did not infringe on truck maker’s rights to presumption of innocence
Scania loses its appeal against price-fixing fine
EFS Global buys two more hauliers
7.2.22
“We will not comment until we have had a chance to review [the judgement] in all its complexity. “Overall I would however like to state that we contest the allegations,” the spokeswoman added. “Scania has not on any level or in any context entered into an agreement with other manufacturers with regards to pricing. “Scania has also not delayed the introduction of new engines that meet EU legislation on exhaust emissions.” The General Court’s findings can be appealed to the EU’s top court, the European Court of Justice.
restricting competition on the market for medium and heavy trucks in the EEA.” A Scania spokeswoman said: “Through this process which has lasted several years, Scania has contested all allegations.
Trail of failed firms prompts TC to deny REL a licence A company whose directors have “a long history of failed road haulage companies behind them” has been refused an operator’s licence, according to a report by traffic commissioner Nick Dent. The report shows that director Ian Newman of REL Haulage applied for a licence for 50 vehicles and 50 trailers as part of plans to take on some of the profitable work of Upminster haulier BB Transport, which was about to be liquidated, and Peterboroughbased REL Storage and Logistics. However, an OTC investigation
into the backgrounds of those involved in REL Haulage’s application revealed a trail of failed companies. REL Investments owner Andy Scott, who provided the finance for REL Haulage, had previously been a director of REL Capital, REL Coffee, Dover Interiors and Woodcraft Tower Hotel, which had all been dissolved following compulsory strike-off, and Oxford Hotel Management and Woodcraft Hotel Bournemouth which had both entered liquidation. The OTC also found that Adam
Lewis, the director of BB Transport and REL Storage and Logistics had also been a director of Bison Transport, which entered liquidation in February 2020, and Roadways Express, which entered liquidation in October 2020.
HGV drivers slam DVLA over licence delays Desperate HGV drivers have criticised the DVLA for risking their livelihoods and going AWOL after the agency failed to process their licences following a medical. One driver said his professional driving entitlement expired in May
Photo: Shutterstock
EFS Global has bought Wakefield-based Gees Haulage and Tyneside Express Transport in Gateshead, leaving it with a projected turnover of £100m. The deals mean EFS Global has added 235 vehicles and trailers and 115,000sq ft of warehousing space to its portfolio. EFS MD Mark Jones said: “2021 saw substantial growth for EFS and we are delighted to start 2022 by announcing these new deals. They both mark significant steps in our ongoing growth strategy and will enhance our ability to service our clients around the country.” In recent years, EFS has bought Thomas Harwood & Son, CS Brunt, Bradtrans International, Horizon Distribution, Euro-Tran Despatch, JRS Traction, PDQ Specialist Courier Services, Caistor Distribution, AFI UK, and Austin Wilkinson & Sons. The values of the most recent transactions were not disclosed.
last week its case was dismissed by the General Court, which found that the EC had not infringed upon the truck maker’s rights to a presumption of innocence. T he court added: “T he Commission had established to the requisite legal standard that the collusive contacts which took place over time at different levels, in particular at top management level between 1997 and 2004, at lower headquarters level between 2000 and 2008, and at German level between 2004 and 2011, taken together, formed part of an overall plan aimed at achieving the single anti-competitive objective of
Photo: Shutterstock
Scania has lost its fight against a decision by the European Commission (EC) to fine it €880m (£733m) for its involvement in a truck cartel to fix prices. The European Union’s General Court upheld the EC’s decision in 2017 that Scania had, along with MAN, DAF, Daimler (MercedesBenz), Volvo/Renault and Iveco, colluded between 1997 and 2011 to restrict competition in the market for HGVs, as well as pass the costs of new technology to meet tighter emissions standards onto customers. Scania chose not to settle, but
Photo: Shutterstock
By Chris Tindall
2021 and yet he was still struggling to contact the DVLA and find out what was going on. The driver, who has multiple sclerosis and has to renew his licence annually, said: “I returned the forms on time. “I was then asked to have a faceto-face appointment with my neurologist, as all appointments had been telephone-only because of Covid. That took place in October 2021. My neurologist submitted a letter confirming I was still fit to drive HGVs shortly afterwards. I still have no licence.”
The driver, who asked to remain anonymous, said he had also been unable to contact the DVLA’s drivers’ medical group or webchat service. The licensing agency apologised for the delays and said it was experiencing a reduced number of staff. “Paper applications and more complex transactions, for example if medical investigations are needed, will take longer and we’re sorry for any inconvenience this may cause,” said a DVLA spokesman. MotorTransport 3
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DHL and DigiHaul partner on green carrier certification DHL has launched Green Carrier Certification through its primary UK subcontractor DigiHaul. The programme helps identify subcontractors that are already contributing to sustainable logistics, while encouraging more investment in green technologies to reduce carbon output. DigiHaul manages a network of 750 carriers on behalf of DHL, who will all be invited to take part in the certification programme.
High demand for HGV ‘bootcamps’ The HGV driver training ‘bootcamps’ launched last year with £34m of government funding have got off to a flying start, according to Mark Currie, chief executive of the National Logistics Academy (NLA) and Manchester training firm Mantra Learning. The target for the 200 16-week bootcamps is to bring around 11,000 HGV drivers into the industry, attracting returning licence holders and funding training and testing for new entrants. The scheme runs until November 2022 and is being delivered by 17 training providers, including Mantra. “The response has been unbelievable,” Currie told MT. “We have had 5,374 expressions of interest already. Most want to go from a car to a C+E licence, and there are a good number of existing drivers who want to go from C to C+E.”
DigiHaul will be responsible for encouraging participation, conducting the assessments and managing the certification process. Carriers will be assessed on whether they have an environmental or sustainability strategy in place, as well as their ability to measure their carbon footprint and share their data. The process will result in carriers being awarded one of four levels of certification: ‘Pass’,
‘Good’, ‘Excellent’ and ‘Outstanding’. The categorisation will enable DHL and its customers to choose greener services and create an additional decision point for future transport tenders and assignments. n DHL Supply Chain has added 13 new Volvo FH LNG tractor units to its fleet as part of plans to have more than 500 gas vehicles by 2025.
Software project brings Pollock (Scotrans) and ARR Craib into fold
Freeway aids Gregory with brand integration By Carol Millett
Gregory Distribution has been working closely with Freeway Fleet Systems to help integrate its acquisitions of ARR Craib and Pollock (Scotrans) by digitally streamlining its engineering operations. The company, which purchased Pollock (Scotrans) in February last year and ARR Craib in 2018, has commissioned software from Freeway to underpin a switch to digital working, with the aim of eliminating laborious paperwork and data entry. The acquisitions saw Gregory’s operations boosted to over 4,200 road-going assets.
ARR Craib was already a user of Freeway’s workshop software when it was purchased by Gregory Distribution, which allowed a seamless import of data for its 550 assets into a centralised Freeway asset repository. However, as Pollock (Scotrans) had yet to implement specialist workshop software when it was acquired, Freeway provided pre-configured Excel import templates to fast-track the import and setup of its 400 assets. Under the deal, Freeway provides real-time, 24/7 information for centralised management including compliance, purchasing
and business analytics. As well as managing the fleet, the system is also being used as a central repository for managing other mechanical assets across the company.
DX Group revenue up 11% despite investigation cloud PROFIT SURGE: Miniclipper Logistics has reported a near-doubling in profit for last year. The Bedfordshire-based family firm, which provides transport and warehousing for the medical, construction, print, retail and food sectors and is a member of Palletline and Hazchem, reported a 10% rise in turnover in the year to 31 May 2021 to £16.2m (2020: £14.7m) while pre-tax profit rose 97% to £1.5m (2020: £796,176). The company attributed the profit surge to “sustained high demand for warehousing services” adding that its five sites were operating at full capacity for the majority of the year. Gross margin increased from 42% in 2020 to 45% in 2021, while net assets increased from £3.5m to £4.5m, which it said was a result of focusing on cost control and process improvements across its transport and warehousing operation.
4 MotorTransport
Despite its shares remaining suspended, parcel specialist DX Group reported that trading in the six months to 1 January 2022 was “in line with expectations”. The company said that it had weathered a “tight labour market and customers’ supply chain disruptions” to deliver a rise of around 11% in group revenue compared with the first half of the previous financial year, with trading momentum continuing into the third quarter of this financial year. DX saw its shares suspended on 4 January this year, following an announcement in November last year that its audit and risk committee had raised a corporate
governance inquiry relating to an internal investigation, which started during the 2021 financial year. DX Freight continued to improve its volumes and margins compared to the same period last year, while volumes at DX Express remained consistent with the first half of last year, with the product mix showing a “slight shift” back towards the division’s historic B2B weighting, following the easing of coronavirus restrictions. Net cash at the period end totalled £14.5m (2 January 2021: £14.1m) with the £20m invoice discounting facility undrawn, which it said gives the group “significant levels of headroom”. 7.2.22
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TAP and Teesside University partner to develop green ‘mobile hubs’
AI innovation could end ‘back to depot’ loading By Andy Salter
Route optimisation specialist The Algorithm People (TAP) is working with academics at Teesside University to transform urban logistics and eliminate ‘back-todepot’ reloading. The two organisations have entered into a knowledge transfer partnership which they hope will eventually provide a vehicle-tovehicle solution, described as being akin to in-flight refuelling in aviation. The 12-month mobile and transient hubs project combines TAP’s optimisation platform, My Transport Planner (MTP), with artificial intelligence developed by the university to enable smaller
vehicles to reload from a larger vehicle and potentially outperform more traditional set-ups, such as back-to-base vans and trucks. One obstacle to replacing HGVs or large vans with smaller vehicles is their smaller payloads, but TAP said its project could overcome this challenge as well as drastically reduce vehicle mileage. TAP said MTP typically delivers fleet savings of up to 20% and this latest project aims to deliver an additional 20% savings on top. Associate professor at Teesside University, Dr Claudio Angione, said: “We are creating a system which can dynamically adjust a delivery hub’s location and capacity in relation to the vehicles it
serves. This will make TAP’s optimisation products even more effective in terms of throughput and efficiency.” TAP chief executive and founder, Colin Ferguson, said: “Decarbonising our cities and our deliveries requires new ways of looking at vehicle movements, and sophisticated technology to ensure that there is no waste in our supply chains. “This project is important because it offers a quantum leap in urban logistics efficiency and it facilitates the commercial use of different types of net-zero vehicle which can work safely even in pedestrianised areas.”
GO IT ALONE: A Terberg HGV, retrofitted with autonomous technology, is set to be remotely test driven as part of the £4.9m government-funded 5G Connected and Automated Logistics (CAL) trial. The electric Terberg YT202, which is designed for moving trailers in distribution centres, transport depots and container terminals, has been retrofitted by StreetDrone with drive-by-wire components and myriad sensors and cameras. The autonomous and teleoperation final-mile trial will take place shortly in Sunderland, following rigorous tests and a simulation study.
VOX POP Should driver agencies be regulated? Charlie Shiels, CEO, ArrowXL Regulation rarely helps anyone. We spend many millions of pounds with quite a few agencies. A number are highly professional and there is a real win-win mentality with a proper partnership approach. The frustrating agencies carry out minimal vetting and the calibre of person put forward can be an issue. We have high standards, others are greedy and looking to profiteer at every opportunity. It’s a ‘bums on seats’ approach. For them, it’s all about the margin and making as much as possible as quickly as possible. That said, the market is tough and there is a lack of available good people, for us or the agencies. Kevin Buchanan, group CEO, Pall-Ex Driver agencies have a wide range of levels of professionalism. The very best are a useful support when an urgent or short-term need occurs. The very worst are probably not businesses that should be allowed to operate, especially if you consider they can make a big impact on the professional standards of an operator. Agency drivers now get most of the benefits that full-time paid employees get, 6 MotorTransport
but are often not accountable for their poor on-the-job performance as they move from one short-term role to another. On this basis, more regulation is probably a good thing. We certainly saw a greater level of misconduct from more agencies through the worst of the driver shortages last year. Andrew Malcolm, CEO, Malcolm Group Agencies should be regulated because they profiteer out of our industry, especially when there is a shortage. Last year we rejected more drivers than before as they didn’t pass our induction process. Too many had limited or no experience. We also found it difficult to retain drivers as most are listed with multiple agencies and chase whoever is paying the highest rate. Ideally we only rely on agencies for planned holiday/absence. For our sector, the cost of agency drivers and recovery doesn’t work medium term. Bob Terris, chairman, Meachers The driver shortage situation is easing and this will reduce our use of agencies. All the agencies we use are given specific descriptions of our needs and all drivers provided to us have to go through our induction programme prior to supply. Agencies should be regulated to ensure
that they meet the same level of compliance expected from operators. We have also experienced a reduction in prices from the agencies as the situation eases. Mike Parr, MD, PML Regulating agencies would certainly be appropriate. Currently there is no industry regulatory body so anyone can set themselves up to offer HGV drivers without any checks. We tend to use agencies more as a ‘distress’ purchase, to fill a staffing requirement. Any agency that we do use, we always run our own checks. We tend to work with a handful that we know really well – and who we can trust. We insist that all candidates are criminal record checked and we ask for a five-year employment history. The pros of working with an agency include expenditure of less management time in sourcing applicants and screening, access to a wider pool of applicants and flexibility – the ability to upscale the number of drivers employed to accommodate seasonal spikes. The cons are that this is a more expensive route, so we prefer to recruit and employ direct. We’ve found that latterly, drivers prefer to work on a PAYE basis employed by PML. It’s less hassle, they get paid holidays and sick pay and other benefits. 7.2.22
News extra: RTX
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New Road Transport Expo to feature targeted zones, industry seminar and ride-and-drive event
RTX proves best in show By Hayley Pink
The countdown has begun for the year’s most dynamic truck show – the Road Transport Expo 2022 (RTX) – taking place from 30 June to 2 July at Stoneleigh Park in Warwickshire. Whether you are a company owner, transport manager, HGV driver, or fulfil any other role in the road haulage sector, there will be plenty for you to see and experience at RTX, which is organised by MT publisher DVV Media International. More than 70 leading brands will be taking part in the inside and outside zoned areas. These include mainstream truck and trailer manufacturers, specialist heavy-haulage firms, recovery specialists, and everything in between. You can check out the latest exhibitors at roadtransportexpo.co.uk. Alongside the exhibition will be a programme of seminars, workshops and tech talks to keep you abreast of the latest operational trends and vehicle technology. A wide range of topics will be under discussion, from choosing the right vehicles and fuels for the job, through to crash
RTX ZONES
30 JUNE - 2 JULY STONELEIGH PARK I WARWICKSHIRE
investigation, freight crime, fleet compliance, and operator trials of new technology. On the Saturday, there will be a Drivers’ Day at which visitors can take part in fun competitions, check out the show trucks and follow the action taking place in the Convoy in the Park Zone and Truck Racing Zone. There will also be a used truck auction. Stoneleigh Park is a fantastic venue located in the heart of England with six million people within a one-hour drive and no fewer than 10,000 free car parking spaces. It is also just five miles away from Warwick Parkway and Coventry train stations. There are a number of catering points there, with a farm shop on site serving locally produced, sustainable food. ■ Register today for your free show ticket at roadtransportexpo.co.uk
RIDE AND DRIVE We are excited to be operating a ride-and-drive opportunity for visitors at the show featuring some of the newest models on the market, with leading manufacturers including Iveco, Scania, TEVVA and Volvo already confirmed and more to follow. If you are interested in testdriving a vehicle at RTX, simply check the appropriate box to express your interest when registering for the show. 8 MotorTransport
RTX aims to have something for all road haulage divisions, from city deliveries to specialist tankers and recovery vehicles. The following zones have already been confirmed, with more likely to be added as the show grows: ■ Urban zone, in association with Freight in the City Expo ■ Tipper zone, in association with Tip-Ex ■ Tanker zone, in association with Tank-Ex ■ Trailer zone ■ Waste and recycling zone ■ Cranes and materials handling zone ■ Heavy haulage zone, in association with Heavy Torque ■ Recovery zone, in association with On Scene ■ Convoy in the Park and truck racing zone ■ Used trucks and auction zone
VISITORS ARE KING! Visitors at this year’s Road Transport Expo (RTX) are in for a show-stopping experience from the moment they enter Stoneleigh Park. A dedicated team of show-makers will be on hand at all times to make sure you can get the most out of your time at RTX. They will be able to guide you to different show zones and suggest relevant stands and seminars for you to visit on the day you attend. They will also be on standby throughout the event to give you a handy electric buggy lift between the
extensive outside grounds. RTX head of customer experience Katy Court (pictured) said: “The Road Transport Expo is going to be a truly memorable experience for our visitors. “From the moment they arrive to the moment they leave, they will be looked after by our excellent team of show-makers. “There are so many exciting zones for the visitor to explore, ranging from the Tipper and Tanker Zones to the thrilling Convoy in the Park and Truck Racing Zones. “This event will be a great hands on experience for all of our visitors with a host of state-of-the-art HGVs on display and a chance to ride and drive the latest models. “It will also be a fantastic networking experience with plenty of break-out and dining areas where visitors can meet up with new and existing industry contacts. “And throughout the show our team of show makers will be ensuring visitors get the very best out of this industry leading event.” 7.2.22
Business barometer
motortransport.co.uk
The UK economy is back to its pre-pandemic level. So what is likely to happen to it from here?
Riding the roller-coaster
The Brent crude oil price climbed steadily in 2021, only easing back in December. T he year’s average was $70.7/barrel, almost 70% above 2020’s price, driven up by soaring demand as Covid restrictions were lifted. Oil climbed again in January, and was approaching $90 – a sevenyear high – as this was written. This latest hike stems from tension with Russia – a major oil exporter – over Ukraine. Most commentators believe Brent will peak in Q1 and then subside to average $70-80/barrel for the year as a whole. But pessimists expect the price will continue to rise, perhaps topping $100 in Q3. This split opinion reflects the toxic combination of geo-political tensions, Covid uncertainty and the difficulty of assessing a market supposedly weaning itself off oil but in which global production and consumption continue to rise. We take the more optimistic view, forecasting an average of around $78 in 2022, about 10% up on last year. That could mean most operators’ average bulk diesel price in 2022 will be 108-112p/litre, but we are on super-thin ice here, with pricing increasingly volatile. 10 MotorTransport
CPI inflation
Annual CPI inflation during Q4 reached 4.9%, the highest quarterly figure for 30 years. But even that undershoots truck operators’ inflation, with diesel in Q4 typically 25% costlier than a year earlier, and driver costs reported to be around 15% up. CPI inflation hit 5.4% in December, and the Bank of England expects it to peak close to 6.0% in April – another 30-year high for a single monthly figure. Thereafter, it is expected to subside – to 3.7% in Q4 this year and 2.3% in Q4 2023. It should hit the official CPI target of 2.0% during 2024, ending that year at 1.9%.
Gross domestic product
The first estimate of UK GDP growth rate in 2021 is published next week (11 February). It is tipped to come in at about 7.0%. If that proves correct, it means the economy in Q4 last year was back to the same size as in Q4 2019, the last pre-pandemic quarter. Most analysts expect GDP growth this year will slow to around 4.4%, and then slow again in 2023 to 1.5% to 2.1%, just below the long-term average. UK growth forecasts for 2021 and 2022 are stronger than those for the EU (around 5% in 2021 and
AVERAGE BRENT CRUDE OIL PRICE $90 $80 $70 $60
$/barrel
The pound performed better than expected in 2021. Our graph shows the Exchange Rate Index (ERI), assessing sterling’s worth against a basket of foreign currencies, weighted to reflect UK trade. The current ERI started on 1 January 2005 at 100. Its 2021 average of 81.5 is 4.5% above 2020’s and 3.3% better than generally predicted. So although Covid has had a tumultuous effect on the economy and life in general, the pound looks remarkably unruffled. Our graph shows that 2016’s Brexit referendum was far more impactful. Looking ahead, most forecasters opine that the pound’s average ERI value in 2022 will be about 2% higher than last year’s. But the pound’s worth against the dollar – against which it lost 5% between June and December, before recovering partially in January – remains worrisome for fuel bills.
$50 $40 $30 $20 $10 $0 2015
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INFLATION: ANNUAL CPI IN Q4 6.0 %
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Economic forecasting is tough. Last year’s forecasts, from inflation to the oil price, were wide of the mark – again. This is unsurprising, however. Analysts have no experience of evaluating the effects of a global pandemic, especially one overlaid by Brexit. So here we review what actually happened to key indicators during 2021, and give analysts another chance, rounding up their latest and most authoritative forecasts for 2022. T heir consensus views expressed here are garnered from reports by: the Organisation for Economic Co-operation and Development; the European Commission; the Office for Budget Responsibility; the International Monetary Fund; the Bank of E n g l a n d ; H M Tr e a s u r y (Comparison of Independent Forecasts); and the US Energy Information Administration.
5.0 % 4.0 % 3.0 % 2.0 % 1.0 % 0.0 %
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4.3% in 2022) but the UK economy has more catching up to do: it contracted by 9.8% in 2020, against 5.9% in the EU.
Interest rates
December’s rise in the bank rate, from 0.10% to 0.25% was the first change for 21 months and is likely to be followed by two, or
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even three, more hikes this year. The rate is widely expected to be either 0.75% or 1% by the yearend, driven up by the need to curb inflation, but restrained by the fragility of the recovering economy. This delicate balancing act continues in 2023, when the bank rate is forecast to average 1.2% to 1.5%. ■ 7.2.22
Viewpoint
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Don’t delay – go green today L ike ‘Partygate’, fuel prices have rarely been out of the headlines of late. While the focus is obviously on looming hikes in domestic gas prices, higher wholesale gas prices also affect operators who have made the switch to Steve Hobson methane for their trucks. And for the Editor majority still running conventional Motor vehicles, diesel prices have been very Transport volatile and could be 10% higher this year than in 2021. Long-term fossil fuel prices will only go one way – up – as more cars and vans switch to battery and hydrogen electric propulsion. But do not despair if your transport operation is based on 44-tonne Euro-6 diesel or gas tractors hauling double-deck trailers and you find it hard to picture a zero emissions replacement in the next 18 years. A background briefing from the government’s Office for Zero Emission Vehicles (OZEV) reveals that, while the ambition remains to move to zero tailpipe emissions trucks by 2040, it does see a
long-term role for internal combustion engines powered by biofuels or low-carbon fuels (LCFs) “While some LCFs can be net zero over their whole lifecycle, when used in internal combustion engines they offer limited air quality benefits, making them less suitable for urban areas. That is why our ultimate ambition is to support the development of zero harmful tailpipe emission HGVs,” the OZEV says. “Once zero emission technologies such as electrification and green hydrogen are commercially viable and readily available, the use of LCFs in HGVs will remain vitally important for minimising emissions from the remaining non-zero emission fleet while they remain in operation and will contribute to meeting UK carbon budgets for decades to come.” The other good thing about LCFs is that they are available now and operators such as Hermes are avoiding thousands of tonnes of CO2 emissions by switching its HGV fleet to biomethane. So don’t wait for big batteries – go green and go bio today.
Protecting IP in hydrogen innovation I Diego Black Partner Withers & Rogers
n July last year, the government published a new transport decarbonisation plan, followed by the launch of the UK’s first Hydrogen Strategy, setting out its vision for a thriving hydrogen economy and its ambition to deliver 5GW of hydrogen production capacity by 2030. The Hydrogen Strategy notes that HGVs are a particularly challenging subsector of the freight industry, given the distances travelled and heavy payload. They also require rapid refuelling, due to their use around the clock. These challenges mean significant investment in the development of clean hydrogen fuels and the infrastructure to support their use is urgently required. To encourage more R&D activity, the DfT, supported by its delivery partner Innovate UK, has committed up to £20m for a series of zero emissions road freight feasibility trials in the UK. Despite some questioning whether the government’s vision for zero-carbon HGVs is achievable, significant progress is being made and a number of global manufacturers – including Hyundai and Hyzon Motors – have already begun delivering hydrogen fuel cell-powered trucks to customers in Europe. Among the most important R&D strands is finding a more efficient and safe means
12 MotorTransport
of storing hydrogen gas, allowing for its use on board electric vehicles. Another is that the energy production of hydrogen fuel cells does not compare with that of diesel engines. Innovators are exploring ways to increase the surface area of catalysts inside the fuel cell, helping improve the energy density and potentially allowing their use to power HGVs in the future. Focus is also being brought to bear on ways to combine electric and fuel cell technology to develop a flexible, hybrid solution that allows rapid refuelling. A hydrogen fuel revolution is on the way for the road freight industry and the race is on to deliver the technologies that will make zero-carbon HGVs a reality. From an intellectual property (IP) perspective, the prospect of a hydrogen fuel economy is bound to encourage more investment in innovation and attract new entrants in the UK and around the world. This means it is even more critical for companies and industry collaborations to secure patent protection for their innovations in all relevant jurisdictions at an early stage.
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To contact us: Tel: 020 8912 +4 digits or email: name.surname@roadtransport.com Editor Steve Hobson 2161 Head of content Tim Wallace2158 Events and projects editor Hayley Pink 2165 Group production manager Isabel Burton Layout & copy editor Nick Shepherd Senior display sales executive Barnaby Goodman-Smith 2128 Event sales Tim George 0755 7677758 Classified and recruitment advertising rtmclassified@roadtransport.com Sales director Emma Rowland 07780 604075 Divisional director Vic Bunby 2121 MT Awards Katy Matthews 2152 Managing director Andy Salter 2171 Editorial office Road Transport Media, First Floor, Chancery House, St Nicholas Way, Sutton, Surrey SM1 1JB 020 8912 2170 Free copies MT is available free to specified licensed operators under the publisher’s terms of control. For details, email mtsccqueries@roadtransport.com, or call 01772 426705 Subscriptions Email:customercare@dvvsubs.com Quadrant Subscription Services, Rockwood House, Perrymount Road, Haywards Heath, West Sussex RH16 3DH Rates UK £146/year.Cheques made payable to Motor Transport. Apply online at mtssubs.com Registered at the Post Office as a newspaper Published by DVV Media International Ltd ©2022 DVV Media International Ltd ISSN 0027-206 X
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If you would like to contribute to MT’s Viewpoint, email steve.hobson@roadtransport.com 7.2.22
Covid-19
DRIVERS? IT’S TRUCKS WE NEED Can the haulage industry escape from the clutches of the truck and HGV driver shortages in 2022 as the impact of Covid fades? Carol Millett investigates
T
he Covid-19 pandemic has cut a swathe through the supply of both HGV drivers and new and used trucks, delivering a double whammy to the sector which threatens to hamper the industry’s recovery as the economy starts to rebound. Truck production levels fell victim to the pandemic in early 2020 as global lockdowns forced OEMs and component manufacturers to close their plants and soaring demand for computer games and laptops from lockeddown consumers hit the supply of semiconductors. According to research by automotive sector analysis firm IHS Markit, in Q3 and Q4 2021 there was a shortfall of up to 40,000 trucks above 6 tonnes gross vehicle weight in Europe, thanks to successive plant closures. The report also predicts production will not catch up in 2022, particularly as semiconductor shortages are expected to continue for at least the first half of the year. To complicate matters, as the truck shortage manifested itself, HGV drivers began leaving in their droves and the DVSA more or less stopped testing new drivers.
Numbers game
BE PREPARED TO WAIT: DAF Trucks already has order books that are full until the end of this year
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According to the Office of National Statistics (ONS) driver numbers plummeted by 39,000 in the year ending June 2020, compared with the same period in 2019 – and by 53,000 compared with the year ending June 2017, when HGV driver employment was at its peak. Against this backdrop, as truck production and HGV driver numbers fell, the pandemic fuelled an unprecedented surge in online shopping which, combined with a recovering economy, has seen hauliers clamouring for new trucks to meet rising demand. Laurence Drake, MD of DAF Trucks, attests to this trend: “We delivered more trucks in 2021 than in 2020 and took record UK orders for new trucks, which
has filled the order books until the end of this year.” Martin Tomlinson, media and truck demonstration head at Volvo Trucks UK & Ireland, shares a similar experience. He says: “Demand is the strongest we have ever seen it and this shows no signs of slowing down.” However, the impact of Covid-19 means hauliers are facing longer lead times from all OEMs this year, warns Tomlinson. “Volvo lead times start at 17 to 18 weeks for certain models and go out as far as Q4 2022 for other models. It’s a moving target and changes almost daily,” he explains, adding that the OEM is “meeting most delivery dates as promised, with minimal delays”. Not surprisingly hauliers are increasingly turning to the used truck market, which has created a shortage and driven up prices to record levels. This shortage has been exacerbated by many hauliers extending their hire contracts by up to 12 months while waiting for delayed orders of new trucks, says Paul Young, senior asset manager at Paccar Financial, DAF’s in-house finance division. “Demand for contract extensions has doubled since last year. Normally 25% to 30% of our contracts are extended but right now it is around 50%, which means half of the used trucks we should be getting back are just not there,” he reports. “As a result, we have seen a 7.2.22
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GOING TO WORK: Logistics firms and hauliers have been organising recruitment events to attract new employees
30% to 40% increase on used truck prices since the pandemic for three- to four-year-old trucks – for older trucks the price could even be double. Tractor units are like gold dust.
Prices spike
“Hauliers are hanging on to what they have and picking up used trucks but the choice is limited. There is only a quarter of the volume of used trucks being advertised for sale right now, compared with pre-pandemic levels, and they are much more expensive.” Young doesn’t see used truck prices falling any time soon. “If manufacturers can build to full capacity this year, then the supply problems could ease,” he says. However, he warns that a continuing components shortage could undermine this recovery. David Morgan, new and used sales director at Keltruck, tells a similar story. “I have been in this business for 31 years and have never seen it like this before,” he says. “New trucks are arriving in 2022 but in limited amounts, so that’s still having a huge knock-on effect on used truck prices. “Same thing with the equipment on the back of the vehicle – as steel prices have risen, so tipper bodies ➜ 18 7.2.22
RETENTION IS KEY RHA skills policy manager Sally Gilson believes a significant amount has been achieved in the past six months to tackle the driver shortage. She points to the long-awaited launch of the Urban Driving and LGV Driver Apprenticeships, the DfT review of Driver CPC training and the HGV driver training ‘bootcamps’ launched last year with £34m of government funding. These aim to produce 11,000 extra HGV drivers, by attracting existing licence holders back into driving and funding training and testing of new entrants. “All the signs show that 2022 will be a much better year, but we must keep our foot to the pedal and not be pushed aside,” she warns. Addressing the problem of retention will also be crucial, she adds, welcoming the £32m announced in the latest budget to fund HGV driver facilities. She is also hopeful the Driver CPC review will bring about radical reform by cutting the requirement for classroom-based training every five years. “Driver CPC is acting as a deterrent and losing us experienced drivers,” she says. “We are now attracting new younger drivers into the industry, which makes it even more important to retain these experienced drivers to act as mentors.” Sally Gilson MotorTransport 17
Covid-19
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of new trucks as a precautionary measure at the beginning of the pandemic. “We took the risk and carried on buying the same volumes and so now we are just managing customer expectations until the goods come through – and buying used assets to supplement demand. But I don’t see production returning to normal levels until the end of 2023,” he says.
Production delays
NO NEW RECRUITS? A huge reduction in the number of drivers being tested by the DVSA compounded the shortage problem
and uploader equipment have also gone up in value. Used truck prices will come down, but not this year. The new trucks won’t arrive until Q4 this year, and only a handful, so the pressures are still there.” Morgan warns that rising truck costs are “crippling” hauliers, forcing some out of business. “More may follow, even when production goes back to normal, because there is always an aftershock and the ripples will continue for some time,” he fears. Some hauliers have also been put under pressure by leasing companies refusing to extend their hire contracts. “These companies want to take advantage of rising residual value rates, something we would never do to our customers for short-term gain,” says Tim Houghton, MD of van and truck hire specialist FVTH. He adds that a lot of hire companies also halted orders
FROM CATASTROPHIC TO CRITICAL A recent report by driver recruitment specialist Driver Require, based on ONS research, revealed that almost 30,000 HGV drivers returned to driving in Q3 2021, resulting in a 40% recovery of the drop in numbers experienced since the beginning of the pandemic. Most of the increase in driver numbers was in the older age range, which the report suggests was a result of many over-45s, who left the sector in Q1 2021, being lured back by better wages and conditions. About 5,000 HGV drivers aged 35 or under joined the under workforce, helped by improvements in testing capacity. However, with 9,000 HGV drivers leaving from the under-45 group, the report argues that employment conditions and a lack of quality parking facilities are still creating significant churn. Driver Require CEO Kieran Smith says: “The primary reason for the driver shortage crisis last year was Covid-19. It was exacerbated by Brexit and by IR35 being put into force in April, but Covid was the primary cause of the crisis.” He adds: “The figures show we are now out of the crisis and into what I would describe as a chronic shortage. But this is still greater than pre-pandemic levels and will continue to impact the sector this year.” Smith warns that government and industry must not rest on their laurels, pointing to the 9,000 drivers who quit the under-45 age group in Q3 2021. “That churn implies there is still real dissatisfaction with working conditions among this age group,” he says. “And that group is critical if we are going to maintain a sufficiently large pool of drivers.” On the upside, Smith believes hauliers are increasingly grasping the nettle. “Lots of savvy operators have been adapting working conditions to match the drivers’ desires by being more flexible about start times and shift patterns, for example, and by finding that balance between making the job attractive to the driver and delivering your customer requirements,” he says. “There has to be much greater awareness of drivers’ needs and a recognition that drivers’ wages and working conditions must not be sacrificed to customers’ demands.” Kieran Smith 18 MotorTransport
Lesley O’Brien, director of FreightLink Europe, has firsthand experience of production delays, with the haulage firm still awaiting the delivery of new trucks scheduled for last November. “After getting no information for months, we have just heard some will be arriving in March,” she says. “The delay means we have had to extend some of our contract hires, but the good news is that business is booming and we have just applied to increase our operator licence from 30 to 45. However, we really need those vehicles.” Like many other hauliers, O’Brien is also battling with the continuing impact of the driver shortage crisis, with some of her drivers forced to self-isolate recently as Omicron infections soared. Nonetheless, she believes the situation is easing, noting that agencies are contacting her for the first time in a while to offer drivers. “However, they are still asking ridiculous rates which don’t equate to the quality of the drivers on offer, so that is an on-going issue,” she adds. Pallet-Track chief executive Caroline Green has also seen the pressure decrease, although she cautioned that the underlying causes of the shortage, such as the Driver CPC and poor facilities for drivers, have not changed. “We had a frenzy of activity and shortages around September, caused by people still being on holiday, the ‘pingdemic’ and on-going issues caused by Covid-19 and Brexit all exacerbating the underlying industry issues,” says Green “But we have definitely seen the noise decrease since then for a number of reasons, not least the significant pay increases that have been widely implemented.” Steve Bowles, MD of Roy Bowles Transport, fears the driver shortage will remain critical over 2022, however. “Smaller hauliers need ready-trained drivers. Finding the right person with the right qualifications is difficult and the back-up is just not there for us,” he says. He wants the government to create a loan scheme similar to that offered to university students. “People are living hand-to-mouth these days and don’t have the resources to fund their training. If there were a loans system, I believe that would entice more into the sector,” he argues.
Cultural transition
Moreton Cullimore, MD of Cullimore Group, believes the driver shortage is partly driven by a growing reluctance to work evenings and weekends – a trend he believes was given added impetus by the pandemic, which allowed drivers to spend more time at home. “It is not just drivers; it’s also impossible to find HGV mechanics because there are jobs out there paying similar rates that don’t require you to lie under an oily HGV or work shift patterns,” he points out. “We are in a period of cultural transition. This is not a new challenge, but Covid has just made it worse.” One thing is for sure: with the industry continuing to battle with both a truck and driver shortage, 2022 promises to be yet another challenging year for hauliers. n Moreton Cullimore 7.2.22