The driver shortage has been an inevitability arising from a combination of factors in recent times, not least the many restrictions presented by Covid. Sadly for the transport and logistics sectors, as well as for so many supply chains, there is no quick fix to this problem, leaving companies scrambling to find a sustainable long term solution without the luxury of long term planning.
Globalisation has returned the carrying of goods and people to the spotlight in business. Possibly seen as ‘old economy’ sectors by those focused on areas such as technology and media, transport and logistics are vital to building and growing trade and tourism between countries, as well as for managing the supply chains of even small, domestic enterprises. At its most basic level, huge growth in consumer e-commerce has fuelled exponential growth in home deliveries beyond the capabilities of any national postal carrier. It is no surprise that research shows clear links between a strong and financially secure transport sector and broader economic growth.
There are, however, perennial challenges. While the decline in oil prices in recent years has helped many transport providers, particularly smaller operators, the industry is navigating a maze of issues including environmental considerations, accessibility, safety and security. As the largest producers of carbon dioxide emissions, companies in this area are faced with the high costs of updating fleets of vehicles in order to embrace the sustainable, ‘clean’ energy that customers, regulators and other stakeholders now demand.
Further pressures include the ability to grow margins on long established trunking routes and limited scope for further road charging, in addition to teething problems in moving between a post-Brexit UK and continental Europe.
Faced with Iittle room for manoeuvre when pricing competition appears, it is imperative that businesses in transport and logistics are structured to operate as efficiently internally as the service they promise their customers.
As the Pandemic’s restrictions begin to recede, now is a good opportunity, prompted by logistical supply chain issues, for companies of all shapes and sizes across the industries to position themselves to withstand further external shocks. From hauliers and freight forwarders to container groups; international corporations to family owned and managed businesses; early stage with low revenue; mature and at a strategic crossroads; preparing to be a consolidator in a fragmented industry; or over-extended and in need of turnaround – transport and logistics operators cannot risk remaining on the back foot for too long.
Obvious areas where businesses may begin to be more proactive include balance sheet optimisation through asset finance and leasing; funding for warehousing and new hubs; ownership structures and succession planning; due diligence for consolidators planning acquisitions; and debt restructuring.
Looking beyond the driver shortage, to which training and developing a wider recruitment pool must be key, investment in facilities will be critical to ensuring a better supplier of drivers can respond quickly to future needs and growth in demand. Joined-up thinking that recognises all necessary elements will position the transport and logistics sectors well to rise to the next set of challenges before they have been identified.
Written by Paul Davis, Partner at Buchler Phillips, the UK’s leading independent corporate recovery, restructuring and turnaround firm.