British logistics boss predicts that labor shortage will continue until next year

The boss of one of the UK’s largest logistics companies warned that “scrap” measures would be taken to ensure the safety of truck drivers during the peak retail season and predicted that the labor shortage will continue until next year.

Wincanton, which provides transportation and warehousing services, said that subcontractors charged HGV drivers 40% higher than last year, while the wages of its employees increased by single-digit percentages from low to high.

James Wroath, chief executive of the Chippenham Group, which has about 5,000 drivers, said the tight labor market will make this year’s Black Friday and Christmas peak delivery times extremely challenging.

He said these problems are the result of “the perfect storm of Brexit and the new crown epidemic”.

There is an estimated shortage of 100,000 truck drivers in the UK, which has caused gaps in supermarket shelves and delayed port delays.

However, Wroath is more optimistic about the prospects for next year. “The publicity around compensation is attracting more candidates. We are more optimistic,” he said. “The whole problem will take 6 to 12 months to really solve and get enough resources.”

He added that the former Tesco executive Dave Lewis, who was appointed to the government’s supply chain advisory group last October, played an important role in accelerating driver testing.

In the results announced on Friday, Wincanton reported a 40% increase in pre-tax profits for the first half of the year, reaching 27 million pounds. Revenue increased by 20% to 690 million pounds.

The group’s shares rose 3% on Friday. Numis analyst Steve Woolf said that due to labor shortages across the industry, stock prices have been in a downturn, but these concerns have been “excessive”, in part because most of its contracts allow additional costs to be passed on to customers.

Even so, Wroath warned that costs may continue to rise in a tight labor market.

“I think wage rate and cost pressures will continue to exist to ensure that we have enough manpower,” he said. “We are still three to five years away from solving these problems.”

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