By Simon Bunegar, Vice President of Business Development at the Transport Exchange Group
There are many challenges facing the haulage industry right now. Increasing fuel costs, burdensome environmental taxes, tighter regulations and the chaos that might ensue from a no-deal Brexit are enough to keep any fleet manager awake at night. But for many large haulage companies, it is driver shortage and retention that pose the greatest concern and also a failure by many to deploy collaborative technologies to address the problem.
Take the UK for example. Right now, there is a shortage of 52,000 drivers and the threat of a bad Brexit is only adding to the retention crisis. You only have to look at the UK’s LGV sector to see why. The Confederation of British Industry (CBI), for instance, says that 14% of LGV drivers operating in the UK are EU nationals. CBI figures also reveal that “60% of drivers are aged 45 or older”. This has created a perfect storm. EU drivers are going home, UK drivers are retiring, and many companies are struggling to recruit younger British workers to fill the void. If left unchecked, the Road Haulage Association says that driver shortfall is one of the factors that could lead to “a catastrophic cocktail of disaster”.
But this is not just a British problem; it is a Pan-European one. Germany, Europe’s largest economy, needs to recruit 45,000 drivers for instance, while France, Denmark, Norway and Sweden are all facing similar skill shortage headaches. So how could technology help? One solution is to make more use of data-driven freight exchange platforms pioneered by enterprises such as Courier Exchange (CX) and Haulier Exchange (HX), two of the largest road transport networks in the UK and Ireland, which are operated by Transport Exchange Group. These platforms, which serve over 6,000 organisations, who own 43,000 vehicles between them, are highly collaborative in their nature. But it is the innovative way they use smart resources that sets them apart. By using CX and HX, member businesses can tackle the problem of an ever-dwindling driver pool by making the absolute most of the skilled labour that the UK haulage sector possesses, not to mention the wide variety of vehicles in a mixed fleet that spans the entire country.
Simon Bunegar, the Exchange’s Vice President of Business Development, explained: “Virtual fleets are very much the future. Not only can they drive up efficiency in your fleet, our research shows that they maximise member profits and eliminate dead mileage too. However, most tellingly, in some cases but not all – we are seeing member businesses actually reducing the size of their private fleets. Why? Because they know that they can always find an experienced and compliant subcontractor from the Exchange to do the job in minutes. This, I think provides solid evidence that if you can harness the benefits of technology and combine them with what humans do best – in this case collaboration and self-organisation – then you have the beginnings of a viable and workable solution. Even in a time when the UK’s logistics talent pool is shrinking.” Bunegar, who joined Transport Exchange four years ago, also points to the fact that “a large number of freight forwarders have also made the Exchange their home”.
“Forwarders do not own any vehicles but are still flourishing on the platform because they know that the Exchange’s smart matching technology will always provide them with a vehicle in the right place at the right time.” Naresh Patel, the Managing Director of Vyom Services Ltd. (VSL), an Essex-based freight forwarder and HX member, agrees but says that it is the strength of depth of the virtual fleet that stands out.
He explained: “Many large customers want what I would call ‘niche road-based services’. Take the Crossrail project for example. Any Heavy Goods Vehicle working on its sites have to be accredited by the Fleet Operator Recognition Scheme (FORS) and must have blind-side detection equipment installed. Before I discovered the Exchange, I could not quote for the work because most of the large parcel delivery companies that I was relying on either simply did not have the vehicles that met this criteria, or if they did, I could never get regular access to them. However, the Exchange’s virtual fleet has vehicles that meet the required standards, and best of all, I always have access to them – even at very short notice. That has been a game changer for me because it has meant that I am able to consistently deliver for my customer.”
Back in Transport Exchange Group’s offices, Bunegar says that smart load matching “can deliver even more visibility” which if acted upon “could help to turn the skills shortage challenge on its head”. “It is about collaboration,” he said. “We are working with our members – sometimes individually, sometimes collectively – and sometimes through our Membership Representative network to find out how we can improve our logistics planning tools and reporting systems. We are asking our member businesses to liaise with manufacturers that allocate them with work to provide even more detail regarding their requirements. Traditionally, on Friday for example, we know that for many businesses, demand for drivers outstrips supply. However, we do not see this necessarily as a driver shortfall challenge. It is really about narrowing the information gap, which we are actively trying to do. By working with contractors and sub-contractors, for instance, we can create better reporting tools that will help them to distribute loads even more evenly over the course of the working week. This would be a win-win for everyone, and best of all, ideas like this can go a long way to directly addressing the skills shortage gap in the haulage sector.”