Friday 15th Dec 2017 - Logistics Manager

Transport…on the road to radical change?

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The first stage in the introduction of the Working Time Directive (WTD) in August 2003 heralds the beginning of unprecedented change in the UK logistics and transport industry. This culminates in the introduction of the Sectoral Directive in March 2005, which will limit the average working week of the large goods vehicle (LGV) driver to 48 hours.

In addition to this, changes to EU Tachograph Regulations and the introduction of digital tachographs in 2004 create a compounding effect that focuses on the driver. Every aspect of the driver’s working practice and routine is about to undergo some form of change, much of it radical: shift patterns, routing and scheduling, how activity is recorded, pay mechanisms, and equipment. In human resources and industrial relations terms alone, the scale of the change-management task is immense.  The realisation has started to dawn on our industry that WTD is actually going to happen. There are many discussions about the likely effect on driver wages and charging rates, and there is a constant undertone of gloominess about the prospect of a serious driver skills shortage in the industry plus the commercial impact. But this is not the whole story.

Operational methodology must change
There is a level of realisation and acceptance that changes in operational methodology will be essential as it is the very way in which our industry operates that causes WTD to pose such a threat.

However, what is largely lacking, is the understanding that the greatest barrier in this process of change will be culture – for management, the workforce and the industry as a whole. Indeed, it is the historical culture of this industry, and the behaviours that it fosters that has created the conditions that cause us to be so threatened by the impending changes in legislation.

In addition to the operational, commercial, and labour issues that must be considered, any strategy that is developed to steer a logistics business through these changes must be underpinned and driven by cultural and behavioural change.

The industry is correct in identifying the prospect of a large-scale skills shortage as posing the greatest business risk. Whilst it is clearly vital to manage aspirations on driver pay and to establish meaningful dialogue with clients over rate increases, neither of these issues is as potentially life threatening to the industry as a lack of skilled driver labour.

Whilst the introduction of the WTD will clearly create a step change in the problem, the existence of shortage in some regions today is an acknowledged fact, and one that universally accepted industry data confirms. Statistics vary, but the message is clear; the industry is likely to require in excess of 100,000 additional drivers, and that outflow of experienced drivers from the industry far outweighs the number of new entrants.

This also confirms that the industry is steadily becoming a less attractive employer. Whilst much of this is to do with the perception of the LGV driver’s role, we must also accept that many of the negative perceptions of our industry have a basis in reality, and that in order to successfully attract and retain new personnel we must change or drive out those aspects of the industry’s culture and behaviour that perpetuate that image and those perceptions.

With its current culture, the transport industry is an anachronism; whilst it has always been a service industry, it once stood beside the heavy manufacturing industries with their unionised environments and firmly manual/blue-collar image. Much of that industry has now either largely disappeared (as with coal, steel, and shipbuilding) or has reinvented itself (rail, through privatisation, and motor, through foreign investment).

The new work ethic
Against this background, the general trend has been for manual labour and bluecollar careers to become less and less desirable, and this is being accelerated by the emphasis on higher education and the desire of more young people to enter employment as graduates. As the work ethic has changed, so has the view on what is an acceptable work/life balance, and the traditional transport industry pattern of long hours over five or six days is becoming less and less attractive.

It would be wrong to suggest that the industry has been totally inert; the development of sophisticated logistics capabilities has been a strong force for change. Companies such as Exel, whose penetration into the supply chain has enabled them to offer added value services that often expand and enhance the driver’s role, are actively developing their branding as an employer.

However, the traditional road haulage sector (which still forms the largest part of the industry) has largely stood still in this respect. It still retains many of the trappings of a bygone era, particularly in respect of its labour relations and the expectations it places on the driver in an operational sense. With this goes many of the negative aspects of its image and the perceptions of the outside world.

So, to revolutionise our ability to attract and recruit drivers these negative aspects must be displaced, underpinned by cultural and behavioural change.

A reliance on overtime
Current operational methodology hinges upon the routine use of driver overtime and rest-day working. Physical shift-lengths and the length of the working week are in most cases open-ended, and shift-patterns are constructed accordingly. Medium and long-term labour planning is ‘loose’, relying on driver flexibility to fill any shortfall. This enables us to accommodate huge variation in customer demand, often at short notice.

WTD will change this, of course, but to wait until 2005 for this to happen by decree would be to leave it far too late; if we are to tackle the recruitment challenge that will stem from the WTD we must begin the process of change now.

Equally, in order to retain the operational flexibility that the WTD’s restrictions on driver hours would otherwise reduce or remove, we must begin to view productive driver time as a precious asset, rather than the abundant commodity that it is today. Intelligent use of driver time will be key to maintaining service levels.

In recruitment terms, as an industry we have always enjoyed the luxury of experienced and qualified candidates being in plentiful supply, and have generally expected (and relied upon) the candidate to make the first approach. This is changing rapidly; in many areas we are already at the stage where we must actively identify and pursue potential candidates if we are to continue to employ the required number of individuals of the appropriate calibre.

Our response must be to take a much more proactive and decisive approach to recruitment, recognising the realities of the labour market and current legislation, and improving the perception of the driver’s role.

We must also recognise the fact that a greater proportion of basic qualification and skills will inevitably be provided at the employer’s expense; we should expect to have to facilitate and fund a far greater number of LGV licence passes, albeit in return for a commitment from the individual to a minimum period of service. Only by looking beyond the ever-decreasing pool of current licence holders will we be able to maintain the standard of our selection criteria.

Diversification is essential
We must also learn to diversify in recruitment. Diversification is essential if we are to further increase the number of potential candidates. In so doing, we must take on the challenging task of introducing this diversity into a working environment largely populated by white males.

Viewed in this way, the themes become clear: new thinking, a new approach; industry image and employer branding; changes in behaviour, and an overall change of culture.

All of this, of course, is much easier to express as a concept than it is to deliver as a reality. The scope and scale of the behavioural and cultural change that is required is immense, and the nature of some of the subject matter will make it inherently slow and difficult.

We should not be daunted by the task. Progress is essential if our industry is to survive the rigours of legislative change, and is to move forward in the long term.

As with any business/industry challenge on this scale, we require vision, leadership, and commitment from our people. It should be an interesting couple of years for us all.

Ian Cooper is general manager, labour relations development in Exel’s special products business, and can be reached at ian.cooper@exel.com.

 

Key points

  • The introduction of the Sectoral Directive in March 2005, will limit the average working week of the large goods vehicle (LGV) driver to 48 hours
  • The industry is correct in identifying the prospect of a large-scale skills shortage as posing the greatest business risk.
  • As the work ethic has changed, so has the view on what is an acceptable work/life balance, and the traditional transport industry pattern of long hours over five or six days is becoming less and less attractive.
  • We must also recognise the fact that a greater proportion of basic qualification and skills will inevitably be provided at the employer’s expense; we should expect to have to facilitate and fund a far greater number of LGV licence passes