Europe’s truck driver crisis will worsen next year, warns the forwarding boss

Supply chain updates

The truck driver crisis will worsen over the next year as wages rise and labor shortages intensify, warns the regional boss of one of the largest transport companies in the world.

Luis Gomez, President of Europe at XPO Logistics, a New York-listed freight company, expects bottlenecks to disrupt Christmas as new EU regulations put an additional burden on retailers and producers next year.

Driver shortages are affecting Europe, with the problem particularly acute in the UK due to Brexit, the pandemic, tax reforms and backlogs on driving tests, sparking the flames of a supply chain crisis.

This has led to empty shelves in supermarkets and manufacturers to close production lines.

Gomez said there will be no easing of the industry-wide crisis next year as EU labor laws on commercial road transport, the so-called mobility package, come into effect in February and also apply to the UK.

“This mobility package will be in effect from February 21st and will lead to further capacity constraints and inflation,” he said, adding that transportation costs would increase for “at least the next 18 months”.

According to the Transport Intelligence research group, there is an estimated 400,000 shortage of truck drivers in Europe, with the workforce being overwhelmed by the pandemic-induced boom in online shopping.

But the deficit would likely deepen and wages would rise sharply due to three main rule changes superimposed on continued strong demand, Gomez said.

From next February, stricter EU labor laws will apply to truck drivers to protect workers from harsh conditions and low wages.

The reforms of the EU mobility package were passed last year after three years of negotiations and stipulate that truck drivers have to take a four-day break from work within a country, while trucks have to return to their home country every eight weeks.

Drivers are also entitled to the statutory minimum wage in each Member State where they drive between countries outside their registered country for most jobs.

Gomez welcomed the rule changes long-term, noting that XPO Logistics expects to better manage the disruptions over the next year, but said Gomez said driver salaries on the continent would increase by “high one to low double-digit” percentages.

This will likely increase shipping costs, which would be another blow to retailers, wholesalers, and manufacturers who have already endured a year of increased shipping and logistics costs.

Edwin Atema, who works for the Dutch Truck Workers’ Union Confederation, said the changes are an encouraging development, but enforcement and wage increases are needed to prevent poor working conditions in the industry from fueling labor shortages.

“The EU regulation is not worth the paper it is on because there is no enforcement. It has been like this for two decades, ”he said. “XPO says this so it can go to customers to ask for more money for their own profit.”

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