The average truck driver is now 55+ years of age

“The fact is that the total tax take on UK business, including that of fuel, is worsening”

The past 12 months have been a period of soul searching, restructuring and cutbacks among Britain’s larger companies, which in turn has led to prolonged pressure on most of the industries small and medium-sized enterprises, especially within the haulage and distribution sector. Many companies have, in the last 12 months, been forced to make difficult decisions that will ultimately decide whether they survive or perish. I know of several wellestablished hauliers who are struggling to ride out the sharp economic downturn. In fact, they are even considering whether it would be wiser to “cut their losses” and release what equity is available in their property and equipment by selling up. The overiding reason is simple: operating costs are increasing by a greater margin than revenue.

Fuel duty increases again
This industry is renowned for its efficiency and ability to survive in a hostile tax environment. Indeed, UK-based transport companies differ from their European counterparts in that they operate from the only major EU member state that legislates against its transport sector! Many will have already lost market share to their EU-based competitors. This is because their competitors in France, Germany, Holland, Belgium et al have far lower running costs than their UK colleagues. With record levels of fuel duty to contend with, at 47.10p per litre and a further expected rise of 1.92p per litre on 1 September, European – let alone international competitiveness – is not easy.

The Chancellor of the Exchequer is quoted regularly as saying that fuel taxes should not be taken in isolation, when comparing the total tax take among other world economies. However, the fact is that the total tax take on UK business, including that of fuel, is worsening. The UK is regularly way above the average of all its main trading partners.

Will legislation affect the service?

“The fact is that the total tax take on UK business, including that of fuel, is worsening”

The latest statistics from the Driver Standards Agency (DSA) for 2001/02 show that, despite a 5,500 increase in the numbers of students qualifying to be LGV drivers since 2000, to 26,400 last year, the shortfall is still considerable. Research carried out on behalf of the Road Haulage Association (RHA) has shown that the average truck driver is now 55+ years of age and has been in the industry for 15 years. Sadly, increasing medical requirements mean driving until the present pensionable age of 65 is the exception rather than the rule.

Long hours and a perceived lack of adequate reward mean that fewer younger people are interested in pursuing a career in the haulage and distribution sector. The recruitment and retention situation has worsened in recent years, as high employment levels within the UK have meant that the industry is competing for labour in an economy where other sectors can offer better pay, shorter hours, better leave entitlement, and less pressured working conditions to potential employees. A further deterrent for school leavers is that they can not normally gain an LGV licence until the age of 21 and many employers find it difficult to employ drivers below the age of 25 because of high insurance premiums.

Organisations such as the RHA and the recently-launched Skills for Logistics Sector Skills Council are proactive in promoting the newly-launched Young Driver Scheme, Modern Apprenticeships and the many localised funding streams available. Unfortunately, take-up is disappointingly low Research by the government’s Road Haulage Forum training sub-group estimates that up to 80,000 additional drivers will have to enter the industry over the next three years to meet the demand caused in part by the EU Road Transport Directive, which is to be fully implemented in March 2005.

The Working Time Directive (WTD)
Since August 2003, we have been subject to the bringing in of statutory paid holidays and the right to health assessments for night workers, through the Horizontal Amending Directive (HAD). But it is March 2005 that we must all be planning for, especially making our customers fully aware of the scope of the legislation and how it will affect the service we are able to offer. Unfortunately, many in the logistics sector are unable to answer the following questions: How is the 48-hour measured? What are the weekly limits? Can you reduce drivers’ pay? Who is classed as a self-employed driver? What additional records must be kept? If you can’t, then it’s vital you find the answers – and quickly.

The RHA commissioned the Centre for Economic and Business Research (CEBR) to carry out an investigation into the likely impact of the WTD, and they have estimated that the additional cost to companies in the UK will be £1.5bn per year, and worryingly 17% of transport managers believe their businesses will fold as a result of its introduction. To further exacerbate the problem, many hauliers are presently using the well-known and road-tested “burying their heads in the sand” strategy, hoping that the WTD will go away.

“A report by the SMMT suggests a typical 38-ton ruck will deliver goods worth more than £100m in a 10-year life”

Both have been funded through the government and have enabled operators of every size to gain free help and advice on how they can improve their existing systems and ensure that their drivers are operating in as efficient a manner as is possible. A report by the Society of Motor Manufacturers and Traders (SMMT) suggests a typical 38-ton truck will deliver goods worth more than £100m in a 10-year life. And it will deliver tax revenue of at least £235,000 in the same period, based on the 80% tax on 55,000 litres of diesel a year. Road tax over the last 10 years should have netted more than £28,000 too.

Over a year, this typical truck will raise more than £30,000 in tax revenue. With more than 40,000 two-axle 38-ton trucks on UK roads, the tax-take from this class of truck alone is worth about £1.3bn a year. At present, 91% of all freight movements made within the UK are by road. Surely it would be in the long-term interests of the government to subsidise the training costs incurred by this industry, as is the norm in the rest of Europe. If they do not, the road transportation system within the UK could move over completely to other European countries trucks. The domestic haulier will be unable to source experienced drivers, as well as being unable to warrant the cost outlay of training the few young people who are persuaded to enter this sector of industry.

Surviving in a hostile tax environment

“This industry must embrace technology as well as being prepared to work far more with every member of every individual haulage company”

Lifestyles and expectations have changed over the last 30 years. Whereas a lorry driver of days gone by had no problems with leaving home on Monday morning, without any idea of when he would be back before the following Saturday, the trucker of today expects to know when he/she will be home and his/her rights as an employee are such that if the employer demands that the employee do as he/she is told, the truck could end up stood anywhere in the country and the employer could be facing a constructive dismissal allegation. This industry must embrace technology as well as being prepared to work far more with every member of every individual haulage company, whether they be of the larger size or the five-truck fleet. The increase in pallet hubs across the middle of the country show that there is already a need for overnight guaranteed deliveries, without the problems of sending one truck from Lands End to John O’Groats. The EU Working Time Directive will perhaps force the industry to face the problems and put time and effort into building independent hubs where loads can be transhipped and drivers can get home on a regular basis.

The next two years will be the decision years for haulage and distribution within this country. It is a fact that many small- to medium-size enterprises are deciding to either reduce their fleet when a driver leaves, or even sell up if they own their own premises. These companies are not being replaced and the medium-sized fleet is disappearing from the equation. The owner driver can hold on a little while longer, but this area of the market is always the “high turnover” section, with some going out and some coming in as demand and company policy changes in the businesses that employ the owner driver.

It is, therefore, up to the larger-sized company to take the initiative and put in place long-term policies and procedures to ensure that they survive and prosper.

A safe, efficient industry
We all need to remember that the road transport sector provides an essential service that affects every single person employed within these shores. The age-old saying “If you’ve got it, a truck has brought it” is as true today as it was when first used many years ago.

The problem is that many people do not appreciate this sentiment and furthermore see the truck, or juggernaut, as it seems to be known, as an annoyance and hindrance to daily life, instead of the deliverer of the lifeblood of their daily lives.

I now spend much time educating people about our industry, explaining how all our truck drivers operate within the strict EC drivers’ hours’ regulations and how this ensures that safety is paramount; how all our trucks are now limited to a maximum and regulated speed, again to ensure that safety is the main priority; how our trucks are the most environmentally friendly in Europe. I try and get across that today’s trucks and the majority of their drivers should no longer be categorised as noisy, smelly and an embarrassment on our roads. The industry should now be proud of being safe, professional and efficient.

Until we can turn the general negative perceptions around and get a positive image across we will continue to be seen as the pariahs of industry and must not be surprised if we cannot persuade a new generation to come and join us. Health and safety is of course of paramount importance to every manager. In a few short years, you may be sure that we will be faced with the EC Training Directive.