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Tim O'Malley - Nationwide Produce

"Perfectly good graded and packed fresh produce is being dumped"

A shocking headline….but true. The acute shortage of HGV drivers is now the direct cause of perfectly good, graded and packed fresh produce being dumped or rotting in cold stores, waiting for wheels to go under it. Supermarket shelves and restaurant plates are going empty – this is a crisis of national importance.

Post by Tim O'Malley - Managing Director at Nationwide Produce

In all my years in fresh produce I’ve never seen anything like this. Example – we supply one of the largest restaurant chains in the UK. It goes without saying how much they’ve suffered throughout the pandemic. However, business is booming for them at the moment. On Sunday, our guy who handles their account received a call from our haulier at 1pm to say that due to a shortage of lorry drivers, they cannot deliver anything to any of the depots for our restaurant customer that evening.

We reminded them that all the goods were graded and packed and ready to go. They said they simply could not deliver due to a lack of drivers. After hours of begging and pleading we managed to get them to deliver to one of the eight depots. And we were one of a number of suppliers to the restaurant chain that the haulier was breaking the same bad news to. The restaurant chain went drastically short of fresh produce this weekend. And this is by no means an isolated incident. It’s happening throughout the industry, every day and across all sectors. I heard of one major supermarket chain which had 22 full loads of produce not delivered this weekend due to the shortage of drivers. Goods are being produced….but not delivered.

Our haulier, whom I refer to above, has been one of our main hauliers for many years. And yet despite this I hold no grudge. Quite the opposite, I feel for them and have urged our guys to work with them to sort through such issues as it wasn’t the first and won’t be the last. In fairness to them, they’ve been warning us about this for a long time but we’re now starting to feel the painful reality of this long-predicted shortage of drivers. So how did it come to this? One of our hauliers summed it up perfectly in a recent email:

BREXIT

  • Large proportion of drivers in UK are foreign nationals from European countries which have returned to the EU.
  • Government failure to add LGV drivers to the skilled labour list, means any new drivers from EU require immigration paperwork – new barrier to entry.

COVID

  • No test of new drivers has taken place for over 12 months which is the equivalent of 20,000 new drivers.
  • No potential new drivers have been trained for over 12 months due to COVID social distance rules.

IR35

  • Changes to the taxation rules of self-employed drivers has seen a sharp decline in those drivers as many were foreign nationals who have returned home.
  • This change has seen a 25% increase in Agency driver costs. This is a massive on-cost considering that Transport companies drivers are around 40% of their costs.

Ageing UK driver force

  • 13% of the industry’s UK drivers are over 60, compared to only 1% under 25.

Rise in driver wages – as companies fight to retain drivers, wages are sharply rising and already this year-to-date wages have increased by circa 10%. Again, this is a massive on-cost where this represents 40% of an operators costs.

So how can we deal with this crisis? There’s no quick fix. For example, when schools/universities break up for summer soon we should see a much-needed boost in staff availability, particularly for the hospitality sector. But while it may take a matter of hours to train a waiter, it takes a lot more time and money to train a lorry driver. The quickest fix would be government intervention to change the tax rules, add drivers to the migrant skilled labour list, etc. That sounds like a long-shot but MI5’s maxim is that society is only ever “four meals away from anarchy”.

Perhaps empty shelves and plates will be the wake-up call the government needs to deal with this crisis. If not that, perhaps a spike in fresh produce prices as the industry is forced to pass on the huge increase in all labour costs to the consumer or perhaps a spike in business failures of fresh produce SMEs. It concerns me the amount of our smaller customers who have been on to us this week asking for help because their hauliers have simply abandoned them. It’s a genuine existential threat for them as they are left struggling to find anyone to deliver their goods to their customers. I’ve just had an email chat with the owner of one of the largest hauliers in the country and he said “we have to highlight this at the most senior level – it doesn’t stop with produce and food generally, it’s worse in other sectors – and the rate of escalation of this situation is truly staggering…..first sign of shortage April 17th – now it’s a national crisis and still escalating.”

I would urge all suppliers in the industry to work with hauliers and customers to get us through this crisis. I heard of one supermarket who stuck to their rules rigorously last week and rejected lorries for being literally minutes late. They are now in crisis talks with two major hauliers who are seriously threatening to stop carrying goods for them or any of their suppliers. I would urge you not to shout at your hauliers and threaten them with bills, that will get you nowhere – work with them to find solutions. Customers will have to be far more flexible on delivery times. We also need to stop hauling fresh air around the country. Full pallets and full loads are what we need in a crisis like this. Customers need to work with us to stagger orders and reduce the number of deliveries to ensure full pallets and loads. We also need to see customers being more flexible on date codes to allow direct deliveries from abroad. I’m sure this will eventually lead us all to adopt better practices but for now we need to work together to find a way through this crisis.

Tim O'Malley
Nationwide Produce
www.nationwideproduce.com


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