So what should be on your radar? Here are four trends that are shaping logistics and transport this year.

1. Sustainability

Sustainability has been shaping the industry for a while now, particularly in areas of supply chain and transport in response to consumer sentiments on climate change and government initiatives. Sustainability as a trend for 2022 though looks to be two-fold; environmental strategies and targets will still be a priority, but perhaps even more so now will be operational sustainability. 

Of course, with the publication of the UK government’s Net Zero Strategy towards the end of last year, environmental sustainability will now be a necessity as well as a strategy going forward. The government has outlined policies and proposals for decarbonising all sectors of the UK economy in order to meet their target of net zero by 2050. In addition, the introduction of a new plastic packaging tax from April will require all plastic packaging manufactured in or imported into the UK, which contains less than 30% recycled plastic, to be taxed.

In terms of operational sustainability, we should be looking to invest in more robust supply chains in order to counteract the ongoing impacts of the Covid-19 pandemic. The concoction of work-from-home advice, illness and isolation periods have led to staff shortages across the sector. Not only has this had massive impacts from an operational perspective, with certain sites and warehouses running at reduced capacities of up to 40%+, it is also incredibly costly in terms of maintaining an absent workforce whilst simultaneously investing in a replacement workforce.

As such the need for a sustainable business model that can service customers consistently is more important than ever – 2022 will be all about finding sustainable ways to manage a changeable and unpredictable horizon. 

2. Collaboration

Although not without its challenges, we are starting to see many more collaborative approaches as a response to a general lack of capacity. It’s predicted we’ll see more collaboration across the whole sector as a way to plug the gaps when it comes to limited resources, availability and efficiency. Collaboration can open the door to minimising costs, filling empty legs, securing warehouse support, sourcing drivers and fulfilling customer contracts.

Collaboration will be about optimising resources in response to challenges such as fast-changing consumer trends, talent shortages, and operational inefficiencies. Operating collaboratively enables businesses and processes to be much more adaptable and resourceful, however it will require the support of another 2022 trend – digitalisation. 

Digitalisation provides the means to the end when it comes to collaboration. Enhanced digital processes and technology will be able to provide the access to, and visibility of, relevant resources and assets, indicating where the opportunities are for successful collaboration. 

3. Recruitment and talent

In the wake of the widely publicised HGV driver shortages, in both the UK and internationally, we will likely see a recruitment drive and focus on talent for 2022. Although driver recruitment will remain a priority, we are likely to see this trend permeate the industry as a whole.

Although the driver shortages gained widespread media coverage, the UK Warehousing Association has also expressed concerns over the increased vacancies for warehouse workers, including fork-lift truck drivers and goods packers. Although responses to the shortages, such as increased pay, have attracted workers to critical operational roles, they have not provided a long-term, sustainable solution to the problem. 

This year will likely see more attention and investment going into securing talent in order to avoid or mitigate a repeat of the challenges faced in 2021. Traditional methods of logistics recruitment may also be overtaken with more creative and digital ways of promoting long-term careers within the industry, connecting talent to not only existing jobs, but future jobs that will require entirely new skill sets. Now is the time to start looking to the future and expanding and nurturing talent pools in order to fulfil the essential roles that the industry will require.

4. Digitalisation

Digitalisation is all about using technology to improve operational efficiencies. As such it supports every other trend in this list which is why it will be fundamental to business strategy for 2022. While many businesses and organisations will have been developing more digital-focused strategies for years, in light of the effects of the pandemic digital will be more integral to operations than ever.

Digital will help to drive efficiency by providing operational visibility and insights, capturing the kind of information required to help make better business decisions. A huge focus on data will get businesses closer to solutions for the likes of: driving down cost per mile, improving warehouse output efficiency, and improving picking accuracy.

Automation is another digital tool that is likely to be utilised, specifically in response to the workforce shortages we have seen. Automation in warehouses for example can help to fill vital labour gaps in relation to picking, packing and fulfilment, and it would not be a surprise if more businesses begin to adopt more automated processes as a result.

Essentially digitalisation boils down to adapting to and acquiring the technology that will drive operational and commercial efficiency across the board, and it will be a huge asset to any 2022 strategy.

-

Finding stability through adaptability

What’s clear is that these trends we’re seeing have been heavily influenced by two years of uncertainty, and what businesses are desperately craving now is some sort of stability. This uncertainty will not just disappear though; the aftermath of the pandemic and ever-evolving consumer demands have made adaptability essential. But it is in this ability to be adaptive, efficient and proactive that will provide the sense of stability that we’re aiming for and prepare us for the road ahead – in 2022 and beyond.

The initiative by business group SuperTech and technology partner Million Labs was launched earlier this year to bring together professional services firms with digital companies across Birmingham and the wider West Midlands, to see how technology can be integrated into everyday business activities. 

We sat down with Nick to discuss all things Talent Xchange, including plans for 2022 and why this is a problem that needs solving now.

–

What motivated you to apply for the SuperTech WM Seeds Initiative?

Talent Xchange was always an idea that I was confident the industry would get behind because there’s such a shortage of talent. This isn’t a recent issue, this is an issue that’s been happening over decades, and the traditional ways of attracting new talent haven’t worked. SuperTech offered the route to get new tech start-ups like ours access to the right people with the right support to effectively bring our idea to life.

The SuperTech application process was also so easy, and it was quick which was ideal because we are trying to fix an immediate problem. This is something we need now and SuperTech along with Million Labs has offered us the route to get the product funded with the right support network and within the right time frame. 

Why do you feel recruitment specifically needs attention right now?

Well it’s been well publicised by now that we have a shortage of talent in our industry, primarily down to the Class 1 driver issue and the shortage of product in stores. We’re getting to the point where it’s really going to affect people at peak times and we just won’t have the same availability of product anymore. That’s the fact unfortunately because there’s just such a shortage of talent. 

I’m really passionate about doing different things to help not only connect existing talent, but also attract new talent to the industry. Whenever I’ve gone to schools and colleges and said ‘what is logistics and supply chain?’, everyone says the same thing – warehouses and trucks. But it’s not, it’s so much more than that. The problem is, a lot of the recruitment programs we see at the moment specifically target logistics and supply chain graduates and at that point those students have already made an active effort to pursue a career in the industry. 

Our idea is to take it back further, to schools and colleges so we can first and foremost provide information. We are launching not just a recruitment platform, but also an information platform. It will be designed to give those students insight into what the logistics and supply chain industry has to offer, because really 85% of the jobs we’re going to need in the industry by 2035 don’t exist today. The skills we’re going to need will be completely different. We’re talking about digitalisation, technology, automation – so simply focusing on logistics and supply chain students isn’t sustainable. We’re going to need engineers, marketers, digital experts and you can’t get that on current platforms.

–

What are the current roadblocks around generating new talent within the industry?

I think knowledge and information. If we surveyed 100 of the top logistics and supply chain leaders in the UK, a very high percentage of their responses I’m sure would be that they didn’t choose to go into the industry as a conscious decision – they maybe fell into it via a different route. I always joke that nobody wakes up one day and says ‘I’m going to be a logistician’, so the roadblock is all about information. 

Everything you can touch and see, from your coffee to your clothing, has to pass through the supply chain, but it’s a hidden profession. You place an order online and it appears at your door and no one questions how that happens. All you question is the delivery fee and how do I return it if I don’t want it! So we want to make it more visible by giving the next generation of talent as much information as possible.

–

What do you hope to achieve with Talent Xchange?

We think we’re creating a different way to attract and connect talent, we also see it as a support tool not only for people who are interested in logistics and supply chain, but a support tool for colleges and educators, so we want to attract talent into further education as well as into jobs. We want it to be a tool to help careers departments to tackle the lack of information around the industry. My hope and desire really is that we successfully attract a new generation of talent. We want to open up the best of our profession to inform universities and students alike about what it’s like, and how exciting it is to work in our industry – not only are we such a large contributor to the British economy but also the world economy.

Where does your passion for nurturing new talent come from?

When I first started out I worked as an agency employee, working in a warehouse. I was 18 years old and didn’t know what I wanted to do, so I was taking a year out before I was due to go to university. The then site manager of the site I was working on drove an S-registered BMW 3 series estate and it was the best car I’d ever seen, so I wanted to know what he did. So when I was a cocky 18 year old kid asking ‘how do you do what you do?’, he took the time to invest in me, along with many other people, to help my career. 

I’m not degree qualified, I was somebody who showed a desire to work and a desire to learn  and people saw that and invested their time in me. So I’m a good example of someone who fell into the industry and got to a decent level, and I’ve enjoyed a very good and successful career on the back of that. But I was fortunate and I was sponsored by somebody, so my passion comes from the fact that someone took the time to help and encourage me. This is a profession that I enjoy and I love, so I think we’ve now got a responsibility to help the next generation find their own pathway into a career in the industry.

–

What are the next steps and plans for 2022 with Talent Xchange?

The app is currently being developed and our intention is to hold a launch event when we are able to launch the product. We’ll be inviting logistics leaders, students and also education institutes and we’ll effectively present the problem from the students, the need from the logistics leaders, and the best route from the educators. We want to solidify what tools we have to support students with employability and next step information. 

The idea is to bring a collective together, ultimately for them to critique and feedback the system that they’re going to use, with a view to then endorsing it to the student population. Because what the app will do is remove the responsibility from the students to be searching for information and opportunities while they’re still trying to focus on their studies. The app will flip this on its head and effectively bring logistics businesses to the talent – so students can be doing what they should be doing which is focusing on their studies. 

–

For further updates on this exciting project and more, make sure to keep up to date with us on our LinkedIn and Facebook pages.

But there could be another way of utilising resources and partnerships to work a lot more effectively going forward. A way that would support our retailers and customers, and ourselves. Cross collaboration between logistics providers and retailers, suppliers and partners is a fantastic opportunity to maximise resources available, and increase efficiency and sustainability across the board. 

We’re talking about the possibility for collaboration across 3PLs and retailers to plug the gap when it comes to limited resources, availability and efficiency. Collaboration can open the door to minimising costs, filling empty legs, securing warehouse support, sourcing drivers and fulfilling customer contracts. The opportunities are clearly there, so what are the challenges with cross collaboration in this way that have made it difficult to adopt before now?

Collaboration: the challenges and pitfalls

Here are four reasons that are likely putting the stopper on cross collaboration, and challenges we’ll need to overcome if we are to pursue it successfully in the future. 

1. Commercial advantage 

Perhaps one of the main reasons that collaboration isn’t widely utilised is because of competition – a little healthy competition never hurt anyone, and for many 3PLs the goal will be to maintain commercial advantage over their competitors. This is also how growth is facilitated, using pricing, strategy and resources to create a unique proposition that attracts and retains customers. If a collaborative process opened up a 3PL’s playbook to their competitors, it could stunt that commercial advantage. 

2. Customer penetration

In a similar vein, many will be reluctant to give competitors access to their customers and contracts – ones they’ve worked hard to secure. It is a worry that by collaborating with fellow 3PLs who have traditionally been competitors, it might open up opportunities for undercutting prices, gaining customer insights and securing new contracts. Discretion will likely be important to give those the confidence to approach collaboration across the board. 

3. Pride

There’s also the element of control, and saving face – we all take a great deal of pride in our work. Having worked hard to achieve success it could be difficult to relinquish the level of control that will be needed to allow for successful collaboration and more open lines of communication across providers and partners. Industry leaders benefit greatly from having a successful, recognised and respected brand, with their customers relying on them to meet their expectations. There is an element of trust that will be needed to collaborate successfully and an understanding that collaborators will uphold the same standards and work ethic. 

4. Customer hesitation

On the flip side of the coin we also have to take into consideration how our customers will feel about more collaborative solutions. It’s understandable that there would be hesitation from a retailer’s perspective. For example, if a 3PL was utilising resources across retailers, there’s the question of which retailer is prioritised? Similarly 3PLs would need to ensure a level of consistency across collaborative services to deliver the experience the customer is accustomed to under one company or brand. These are definitely the factors that need to be considered from a customer service standpoint. Is it possible to be fully committed and reliable when sharing or distributing resources in this way?

Is there still potential?

At WIN, we are constantly looking to the future and are positive about the opportunities available to us that will help the industry to not just survive, but thrive as one of the UK’s most important sectors. We believe a more collaborative approach is essential for our future and that, collectively, we need to start thinking differently as to how we can use the assets we have to continue driving forward. 

It’s not just us either, industry collaboration was discussed amongst other trends in a panel (The state of logistics in a post Covid and Brexit world) at the recent Multimodal Exhibition, held at Birmingham NEC. Paul Durkin, chief customer and innovation officer at Wincanton noted, “the general lack of capacity will also see more collaboration, […] It’s about moving the dial forward.” Chris Warn, global logistics director at Pentland Brands, agreed, suggesting “We’ll see retailers supporting each other and more collaboration across the whole sector.”

Collaboration as an approach also isn’t such an outlandish idea – we already do it in certain areas of our businesses. Many companies operate across multiple sectors in order to make the most of their resources throughout the year. This multi-sector presence enables companies to shift and adapt resources to meet changing demands based on trends, habits and external circumstances. Peak trading is a great example of this, when we shift our focus and resources to retailers during peak season. Similarly the effects of Covid-19 are proof that adaptability will be an essential strategy for the future. 

Embrace and adapt

While there are definitely still challenges and pitfalls to navigate, collaboration can definitely be a positive way forward to ease pressures within our industry. We need to start sharing more resources and be willing to adapt so we can maximise opportunities as and when they arise. Collaboration is definitely coming so we have to embrace it. The likes of Amazon’s Relay network are already setting the precedent for how transportation is changing, combining two emerging trends: digital and collaboration.

It’s also something we champion at WIN, with our successful Brokerage Service which aims to connect clients to viable resources and opportunities from our network. It’s not about harbouring resources, connections and customers for the sake of ourselves – we won’t survive this way. It’s about making the most of what’s available from multiple sources to get the job done as best we can.

Join the conversation on social media – do you think collaboration is key for moving forward?

The cause of HGV driver shortages has been widely discussed, including by us, with a number of factors impacting the retention and attraction of new drivers to the profession. But what about the effect of the shortages, and the number of other supply chain shifts that are shaking up our industry? 

The announcement that EV CL Chill went into administration at the end of September is a stark sign of the times, and demonstrative that ongoing issues are having significant impacts in real-time and on big players in the industry. Despite having achieved a cash-generative year for 2020, EV CL Chill still struggled with a loss of key customers and acute driver shortages. In addition, cases of large supermarket retailers struggling to secure haulage for seasonal produce, warnings of toy shortages, and general availability across the board are all concerning as we head into the eye of the peak trading storm. 

Although warnings of shortages and empty shelves have been circulating for months, demand doesn’t seem to be waning – our customers still want to provide the goods, and end-consumers still want to buy. The need to deliver come Christmas is still very much a priority.

Supply chain struggles

So exactly what is causing struggles within the supply chain? Based on our experience, here are the most common areas of concern in the industry currently:

• Driver shortages and lack of haulage

The lack of HGV drivers has permeated the news for months now, and for good reason. This is still a huge area of contention and something that is having an impact across the supply chain. The domino effect of these shortages is that our customers cannot secure haulage to fill their shelves on time, and international imports are having to be diverted away from the UK due to a backlog of containers that can’t be moved quickly enough. 

Essentially delayed deliveries, empty shelves and petrol shortages are all results of a significant lack of skilled drivers to get products directly to the end-consumer. With the onset of the peak trading season and an increase in volume of goods to be moved, our driver shortages will be an ongoing challenge. 

• Inflated prices

We are seeing inflated prices across areas of the supply chain that are, quite simply, not sustainable long-term. The cost to transport one container from East Asia to Europe is now 10 times higher compared to its pre-pandemic cost – a result of global supply chain issues exacerbated hugely by Covid-19.

Similarly, due to demand, HGV drivers have seen some staggering pay increases that some argue either aren’t sustainable, or still not attractive enough to encourage drivers to join or stay in the profession. The result is a strategy for the short-term that could end up alienating smaller firms that can’t compete with such costs, and consumers who simply don’t want to pay for it. 

• Seasonal demand

An increase in consumer demand for Christmas 2021 is putting a lot of pressure on an already strained supply chain – unsurprisingly. Our retailers are desperate for haulage that can guarantee seasonal stock is on the shelves (with particular pressures for food retailers and grocers who require chilled haulage for seasonal produce) in time for consumers craving a ‘normal’ Christmas following last year’s last minute lockdown fiasco. 

Although peak trading is always challenging, the addition of driver shortages, inflated prices, and increasing consumer expectations have come together to create a perfect storm for the upcoming period. The question now is, can we mitigate these factors successfully enough to see us through 2021?

Supply chain solutions

We are seeing a number of trends across the industry that have been introduced to cope with peak trading demand – here’s what’s shaping the 2021 peak period:

• Price hikes

As mentioned, inflated prices within the supply chain are not sustainable and therefore price hikes are already being predicted to hit consumers in order to cover increasing supply chain costs. It has been reported that UK supermarket prices could rise by as much as 5% during the peak trading period.

While demand is high and availability uncertain, there’s potential that consumers will be willing to pay for these price hikes for the time being, in order to secure products for the seasonal period. But what about for the long-term, and how far will price hikes need to go to cover costs?

• Certainty over selection

While peak trading usually drives retailers to expand product lines and increase stock volumes, 2021 may see a shift in focus to product certainty over selection. With delayed and fragmented deliveries making it difficult for retailers to match customer expectations across their business, a commitment to delivering less, but with more certainty may be the way through the peak period. 

Retailers are already adjusting their approach to peak brand messaging in order to manage expectations, and those that have control over their own supply chain are likely to benefit from being able to promote its reliability. 

• Temporary visas

The government announced its plans to provide temporary visas to 5000 HGV drivers and 5500 poultry workers for three months in an attempt to provide short-term relief for the haulage industry. This scheme is to run up until Christmas Eve in a clear attempt to see the UK through the seasonal period. But with a shortage of 100,000 HGV drivers, will this be enough? Not to mention the possibility that this temporary scheme may not even be all that appealing to overseas workers? 

• Prolonging the peak trading period

No toys or turkeys – these are the warnings that are resulting in consumers being advised to shop early if they want to guarantee their Christmas goods. 48% of consumers have started Christmas shopping earlier as a result. 

Starting Christmas shopping earlier may help to manage expectations and spread demand, particularly when paired with clever brand messaging that promotes current availability over future uncertainty. But with the supply chain already under strain, does this also inadvertently put further pressure on it by prolonging the peak trading period?

The shape of things to come

The reactions we’re seeing to current supply chain issues are short-term attempts to survive the 2021 peak trading period, managing expectations and meeting demand as best they can. But we question how successful and sustainable they can really be? Are we instead on the brink of a fundamental shift in commercial approach, in an effort to deal with a shifting supply chain and ever-increasing consumer demands? 

What happens in 2022 – when we are still feeling the effects of driver shortages, global supply chain issues, Brexit, and changed consumer habits?  Is the reaction we’re seeing to peak trading highlighting our need for a more sustainable supply chain and ultimately signalling the shape of things to come?

We’d love to know your thoughts – join the conversation over on our social media pages. 

As a country, the UK is currently smack bang in the middle of a supply chain crisis with a shortage of an estimated 100,000 professional HGV drivers from our roads. With recent reports of empty shop shelves, fast-food shortages, and now a panic over petrol putting a spotlight on the lack of lorry drivers, our customers and consumers are just starting to grasp the magnitude of this issue – but are we really surprised?

Recent events have certainly added fuel to the fire. Brexit has slapped red tape on imports and a considerable percentage of our European workforce, while the Covid-19 pandemic was a catalyst for changing consumer behaviours and a reliance on our industry to keep the country moving. 

But do the problems actually run much deeper? We think yes:

“If we are honest, we’ve known about this for the last decade and it shouldn’t be a surprise. The reality is that we as an industry haven’t done enough historically to retain, train and attract drivers. Poor conditions, inadequate infrastructure, facilities and pay that simply aren’t reflective of our driver’s skill and expertise. There is a reason why it’s a professional driver.

Yes, there have been decisions and actions in the last 18 months that contributed to this problem, but if we as a profession suggest that this is the reason, we are fooling only ourselves.” – Nick Winder, WIN Managing Director

What was tomorrow’s problem, is now today’s reality.

A solution to our problems?

The problems we are facing are certainly recognised by our industry. The Road Haulage Association has addressed our government directly, outlining the specific issues we are facing and the necessity for government support at this time.

According to the RHA, the HGV driver shortage has been fuelled by a handful of factors: Covid, EU exit, retiring drivers, test shortages, and IR35. The solution? The RHA wants government intervention to access EU and EEA labour (even if just in the short-term), address the skills shortage within the industry, and re-establish the DEFRA Food Resilience Industry Forum. 

While certain issues definitely require recognition and support from our government, as an industry we can’t rely solely on their intervention, (case in point: extending daily driving limits!) nor blame them entirely for this crisis. What are we doing to help ourselves? Increasing hourly rates is not incentive enough for our drivers, and short-term access to additional European labour is exactly that – short-term. We know we need solutions now with peak trading periods approaching and demand only set to increase, but what about next year, and the year after, and the rest of the decade? It all seems a little too late.

Responsibility and real action

Beginning to find a solution to this crisis starts with taking responsibility for our industry and driving real action. At WIN we believe we have to hold our hands up and start making real change if we want a better future for our industry:

“How do we rectify? There isn’t one thing we need to do. There are many things we need to do at the same time. Each will take time and will cost money, but the sooner we collectively run towards this instead of running away from it, the sooner we improve our current position.” – Nick Winder

• Retain

It’s time for our drivers to be treated with the respect they deserve, and their status as key workers recognised outside of a pandemic. Respect on the road should be a given considering the hard work, training and skill required to achieve the role. Flexible approaches to shift patterns and working hours, as well as improved waiting times at our suppliers and distribution centres would all go a long way in retaining the current workforce. 

Our infrastructure also needs to support rather than discourage our drivers. The UK’s infrastructure currently doesn’t match up to those seen elsewhere, for example in Europe, with lorry drivers often struggling to find overnight parking and basic facilities that every other employee is entitled to during their working hours. Improved rest areas, service station facilities, parking areas, and the removal of inflated facility charges are a must. 

• Train

The current process to becoming a Class 1 driver is too elongated and can be off putting to both individuals and businesses. Fast-track pathways need to be established to incentivise new recruits and get drivers where they should be – out on the road. Continual investment in driver training with robust, online industry leading packages will also promote development in our drivers, and establish a consistency in the level of skill and professionalism that is displayed in the role.

We also need to make our industry visible to the next generation, promote the career development that is available to them, and encourage accessible training and development. We need to begin to take an active part in building the next generation of drivers from the ground up. 

• Attract

HGV driver working conditions are currently not attractive enough to encourage our younger generation into the industry. We need to improve pay and working conditions – the disparity of pay between a professional Class 1 and other vocations needs addressing. The driving profession needs to be elevated again, with the importance of the role recognised collectively. 

In addition, with the majority of our current HGV workforce reaching retirement age, and a considerable lack of new talent joining the industry, more needs to be done in order to promote and encourage logistics as a long-term career choice that is both rewarding and reliable. The average age of a UK driver is currently 50+ and the RHA is warning that a third of our driver workforce may retire within the next five years. We need considered and targeted recruitment campaigns to seek out and attract the next generation of drivers. 

What now?

It is somewhat positive to see that the government is taking certain actions to attempt to manage the crisis as it stands. The reported introduction of a temporary visa scheme in the run up to Christmas may provide some support, as well as plans to speed up the process of HGV tests. However, this recognition of the current situation needs to be sustained long-term by both the government and our industry if we are to begin to even make a dent in finding a real solution. 

What do you think? We’d love to hear your thoughts over on our social media pages. Let’s keep this discussion going and promote some real change for the future of our drivers!