Addressing the supply chain challenges in 2022

UK supply chains have faced significant labour shortages this year, and the disruption has yet to be properly addressed. Howard McCormick of World Options explains how the industry can attract new talent in the long term

The UK’s shipping industry has found itself close to a crisis point over the last 12 months, with the triple threats of Brexit, the COVID-19 pandemic and the shortage of HGV drivers and other key workers in the sector. Meanwhile, similar labour shortages in the US and Germany have compounded this challenge and caused ripple effects that have contributed to what is now a worldwide supply chain problem. But as the old saying goes it’s an ill wind that blows no one any good.

As an online shipping and courier services provider, World Options has been able to grow its customer base by 70 per cent in 2021, and its franchisees have seen revenue growth of 30 per cent. This was driven primarily by the COVID-19 pandemic that led to significant growth in the e-commerce market. Even now when other parts of the economy are suffering this surge in demand has not abated.

For our franchisees managing this level of growth is a very nice problem to have. Looking forward, the changes in the business environment, the continued move to a more online commerce-driven world coupled with a desire from our customers to get products to their markets efficiently and in good time is only going to create more opportunity.

For all types of businesses, 2021 has been difficult, but over the last six months as the economy has recovered and grown on the back of the vaccine rollout and lockdowns being lifted we all feel much more positive. The big challenge for companies now is to meet customer demand as it continues to increase, and getting products where they need to be is critically important.

Logistical pressures have affected businesses of all sizes and have reached such a large scale over the past year that consumers have grown used to seeing empty shelves and missing products in supermarkets.

There are undoubtedly many challenges to address but as they say, where there’s a problem there’s opportunity. By changing our approach and adapting how we operate we can address the challenges we all face and come out of this stronger not only as businesses but also as a nation.

How did supply chain problems affect business in 2021?
World Options connects business customers to shipping services from many of the world’s best-known carriers so we have seen first-hand the challenges faced by the industry, as our shipping partners have had to contend with driver shortages and customs problems.

The changes in the market have driven us to focus on what makes our offer so special, the knowledge and experience within our organisation and with our local franchisees. We are able to utilise our expertise to provide peace of mind for our customers when they need to ship items that are restricted in certain countries when extra documentation or a licence may be required for an item, or when specific packaging requirements apply. As an organisation, we have worked extremely hard to stay abreast of the latest regulations and requirements so that we can give our clients advice on the best way to ensure a shipment gets to its destination on time.

The problems faced by the logistics sector have not been limited to changes in border regulation, all of the shipping partners we work with were impacted by the shortage of delivery drivers, and many services suffered.

This is where strong relationships with our shipping partners became incredibly important. Through regular communication, we were able to understand which depots were affected, when collection windows might slip, and whether deliveries would also be delayed. This meant our franchisees were able to keep their customers up to date and provide alternative solutions wherever possible to help them meet their commitments.

The industry has recovered well since, with deliveries almost back to normal, it is incredibly challenging though, and due to the scale of the problem, long-term solutions will need to be implemented that will help us attract talent and reduce bureaucracy.

What solutions have been implemented thus far?
In October, a fuel scare caused shortages at petrol stations around the UK. The government introduced a scheme offering 300 visas for fuel tanker drivers to come to the UK from the EU on a temporary basis. The scheme did attract some additional drivers but perhaps not as many as had been hoped, an indication perhaps that a longer-term solution is required.

Recognising that a driver shortage could affect shipping, freight and logistics in the lead-up to Christmas, the government announced a similar scheme providing temporary visas for HGV drivers to get the country through the peak demand. This initiative has had some success but the key has to be finding a way of attracting more home-grown talent into the industry.

The temporary visas were initially due to expire on 24 December, but have now been extended through to February which will hopefully give the country more time to train drivers in order to meet demand which is unlikely to subside.

To help address the capacity issue the Department for Education is investing £10m to train up to 3,000 more people to become HGV drivers. People are being offered free, short, intensive courses that will train drivers to be road-ready and gain a category C or category C&E licence. In addition, 1,000 more people are expected to be trained through courses accessed locally and funded by the government’s adult education budget. To support this MOD personnel are being used in addition to civilian examiners, helping to increase HGV testing capacity substantially.

These measures will alleviate the immediate pressures on the logistics sector and help it to keep the wheels moving and the economy recovering. It’s a very exciting time for the industry but we must make sure we continue to plan for the future and the opportunity it brings.

2022 – the year to develop new talent in the sector

Ultimately, any long-term solution has to do more than just get new talent into the industry, it needs to ensure that there are also opportunities for individual development to create sustainable and rewarding careers.

While many may be tempted to become HGV drivers because of the competitive rates of pay now being offered, we need to be careful to make sure that as an industry we then help these people understand that there is also a long-term future to be had working in the logistics sector. As an industry, we will need to look at ways in which we can improve our employment terms and conditions and find ways of developing our people whilst at the same time driving efficiencies from technology and processes that will keep us all profitable.

We believe that 2022 will be a challenging one for the transport and logistics sector but it is one that carries with it many opportunities for the people who want to make a go of it.

There is certainly a demand for transport and delivery services that is only going to grow with time. When this is coupled with a groundswell of public opinion and government support for doing things differently then businesses should be able to prosper.

The challenge for all of us in the sector is to continue to innovate and find ways of delivering results more effectively, if we can continue to do that 2022 will be a great year for the sector.

The author
Howard McCormick is the UK franchise sales, recruitment and freight director at World Options. He is an experienced multi-modal logistics professional who joined the World Options management team in 2017. As a franchise owner within the courier industry, Howard has a strong background in logistics.