The UK Transport Crisis: How Could Trucker Shortages Drive Up Prices?
Updated: Dec 16, 2021
Panic buying at the gas pumps recently created chaos in the UK, triggering huge queues and gas station closures as supply struggled to keep pace with demand. While government ministers insisted that there were no fuel shortages, gas prices soared, with Halfords, a major UK retailer, reporting that sales of jerry cans—containers used to store gasoline—had risen by more than 1600 percent.
Temporary gas station closure became an increasingly common occurrence. At the peak of the crisis, 90 percent of gas stations were dry, according to data from the UK Petrol Retailers Association.
The Current Shortage Is a Symptom of a Systemic Issue
Although many blamed the public for panic buying and the media for stoking the flames, the recent petrol shortages in the UK indicate a larger problem. With an assessed deficit of approximately 100,000 truck drivers, the UK is facing significant disruptions in supply chains. This is an issue that industry experts have been warning the government about for quite a while.
The UK government did take steps to help stabilize the situation, including putting the army on standby to start delivering fuel to petrol stations, and issuing temporary visas to EU truck drivers, but anxiety still persists. The pandemic may also be exacerbating this anxiety, which already has people at heightened levels of concern.
According to Cathrine Jansson-Boyd, a Consumer Psychologist at the UK’s Anglia Ruskin University, recent panic buying seen in the UK has been driven by uncertainty. Anxiety also intensifies the “fear of missing out” effect, caused by people seeing others queuing at the pumps. Jansson-Boyd explains that when people hear about a problem, but hear nothing about a solution, they feel like they need to do something, even if that action is not really rational. This can manifest itself as buying things they do not really need.
The Consequences Go beyond Gasoline
The problem is by no means restricted to gas stations. Interruptions in supply chains frequently resulting in empty shelves at grocery stores, while fresh produce is left to rot in the fields. Some UK farmers have even offered free fruit and vegetables to those who are prepared to come and pick it themselves.
In addition to a shortfall of truck drivers, the UK is currently experiencing a massive deficit in seasonal workers. With many pickers previously coming from Eastern Europe, Brexit has had a massive impact on the UK labor force, creating a shortfall in workers that is only predicted to get worse.
The UK’s Trucker Recruitment Efforts
With the combined impact of Brexit and the COVID-19 pandemic compounding recruitment challenges, UK transport companies have hiked up salaries, offering immediate bonuses to attract candidates to the industry. As the UK transport industry strives to entice new workers, the UK National Driving Center reports a 20 percent increase in people applying for truck driving licenses compared with pre-pandemic figures.
Laurence Bolton is a London-based truck driving instructor. He explains that people have been lured to the sector from all industries, including displaced workers from hospitality and retail, two sectors devastated by the COVID-19 pandemic. He recently started training a former finance worker, as well as two furloughed airplane pilots.
Though a welcome boost to the transport industry workforce, UK logistics experts warn this simply is not enough, with 100,000 more drivers required just to meet current demand, according to the UK Road Haulage Association. Signs of disruption in supply chains are already manifesting themselves with McDonald’s suspending certain items from their menu, pubs running low on beer, and sporadic gaps in superstore shelves.
Trucking and the Global Economy
Truckers play an integral role in the global economy, delivering goods from A to B. The shortfall seen in the UK is mirrored in Germany and the United States, albeit to a much more modest extent. Unless steps are taken to mitigate the problem, this could spell trouble in the long run, potentially driving inflation.
UK companies are currently grappling with a post-Brexit exodus of European drivers just as industry picks up the pace in this post-pandemic world. Since the summer of 2021, UK food giant Tesco has offered every new driver a £1,000 bonus just for signing up, costs that will almost certainly culminate in food price increases, driving up the cost of living and triggering inflation.
In the wake of pay increases intended to boost recruitment and retention, the average UK truck driver now earns £56,000, more than the average architect or lawyer. Bosses at the UK Road Haulage Association warn that many businesses will simply pass the cost of these substantial pay increases back to customers.
When Will the Trucker Shortage End?
Industry experts agree that UK truck drivers have been underpaid and undervalued for many years now. Nevertheless, even with attractive starting salaries, experts predict that the industrywide recruitment drive will fail to have any real impact for at least 18 months.
In the long-term, the UK Road Haulage Association warns that driver facilities will need to be increased and improved, and driver-testing and processing streamlined. In the meantime, experts predict a winter of discontent in the UK, as disruptions in supply chains and subsequent shortages become increasingly frequent.