The ongoing situation affecting HGV drivers and the freight rates for container shipping remain the two most pressing issues affecting the beverage sector. Europe is the most affected region in terms of HGV drivers and the lack of deliveries into the UK. Yet the seemingly increasing freight rates for shipping show no signs of reducing in the short term.
The other big issue for UK retailers is the recent fuel and driver shortage that is having a strong impact on the retail sector. The global Covid pandemic is one of the factors: many overseas drivers have still not returned to the UK. Around 40,000 driver tests were cancelled in 2020 and the pass rate for new drivers in 2020 was 25,000 less than in 2019. The Government’s suggested relaxation of rules will enable 50,000 HGV driving tests to be taken as solutions to the current crisis. Yet any relaxation of the immigration visa rules will hot help in the short-term and add just 5,000 potential HGV drivers to the dwindling pool.
Other short-term measures indicate that up to 4,000 people will be trained as new truck drivers. Plans are underway to contact around one million drivers with HGV licences in an effort to entice them back to the industry. To help with this, it is suggested that Ministry of Defence driving test examiners will be drafted in to speed up the testing process.
The battle for HGV Class 1 drivers has highlighted the lack of drivers and supply chain disruptions in the UK – as well as in mainland Europe – and this is not likely to be alleviated by the Government’s suggested quick fix in the run-up to Christmas. The recent fuel supply issue in the UK may not be a long-term problem but it added to the disruption to delivery schedules and it will still have an impact in this important pre-holiday period. Stock and supply chain management will remain a priority to help alleviate some of these ongoing issues.
We said in our last update that global freight rates were likely to continue to rise in the short-term as the pandemic continues to cause delays at ports in the Far East. The most recent container freight rates suggest $20,000 per 40ft TEU and experts believe the rates will not start to settle until early 2022.
In September the French container shipping company CMA CGM, the world’s third-largest ocean carrier, announced that it will halt all spot rate increases through 1 February 2022 in order to prioritise its long-term relationships with customers. This follows news that the German shipping company Hapag-Lloyd has also suspended increases. Despite these commendable moves by freight companies there will continue to be effects for UK importers.
