Supply chain ‘on brink of collapse’

Between them, the Covid pandemic, Brexit and an upsurge in consumer demand have stretched the KBB supply chain to breaking point. And now a shortage of HGV drivers looks set to make things even worse. Chris Frankland gets the reaction from the industry to this latest threat

Retailers are facing further disruption to a supply chain that is already in tatters thanks to a new threat – an acute shortage of HGV drivers.

This ‘perfect storm’ has been brought about by a Brexit-induced exodus of European drivers, Covid testing delays at UK and European ports, self-isolation, an interruption to the training and examining of HGV drivers, and summer holidays.

Research by skills development specialist Enginuity has shown that there are currently 100,000 vacancies for HGV drivers and this serious shortage of drivers is now beginning to disrupt the manufacturing process and it is calling for urgent action from the Government before it goes into summer recess.

The majority of these driver vacancies are in the South-East, East and West Midlands, the East of England and the North-West, all of which are home to significant manufacturing operations. And experts fear that, with the summer holidays just getting under way, the situation will get a lot worse before it gets better.

So what do KBB industry insiders make of this brewing catastrophe and what are they doing to try to mitigate its effects?

John Pollitt, sales and marketing director at JJO, which operates its own fleet of heavy-goods vehicles, gave kbbreview his take:  “We are aware there is a shortage of drivers and in particular HGV Class 1 at present. JJO employs 26 drivers. The vast majority have been employed for many years and are great ambassadors for our business.  If we lost drivers due to Covid over a short period of time, we have four other members of staff within the business who also hold HGV licences, who, if need be, could step into the breach. 

“HGV drivers are in demand and they can pick and choose from the positions available. I am sure levels of pay and working conditions are the main influencers. Our work is ‘deliver full, return empty’, with no back haulage. Our drivers also only work Monday to Friday.  We renew our fleet every five years and the driver takes ownership of their allotted vehicle. For these and other reasons, we have tremendous staff retention, consequently we have not had to recruit recently.”

At bath manufacturer Trojan, managing director David Mosley said of the problem: “The lack of qualified HGV drivers is noticeable within the industry, and I can imagine it is only going to get worse as HGV and LGV drivers now legally have to undertake their Driver Certificate of Professional Competency (CPC) and many of the Eastern European drivers have withdrawn from the UK due to Brexit. Both of these factors are contributing to the extreme driver shortages across the UK and unfortunately it has impacted, and will continue to impact, the service quality we, as customers, receive.

“However, transport and the supply chain of raw materials, while a challenge, are not Trojan’s or our [sister company] Mantaleda’s primary concern. Instead, our primary concern is inflation and constant price increases of raw materials and key components, due to the limited supply and increased demand globally. Inflation and the increasing prices linked to it will be at the forefront of all of our discussions right now.

“To try and reduce any risks or issues we may face, we have started to collect some materials ourselves as the majority of our suppliers are local to the West Yorkshire area and we run our own transport.”

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Commenting on the situation on its website, drawer box supplier Probox said it believed timber supply was reaching a “crunch point”. It said: “There have been cases of the booming post-lockdown construction sector experiencing issues with timber stock supplies, which the ongoing HGV driver shortage in the UK has contributed towards, however, that doesn’t seem to be the main cause.

“According to the Timber Trade Federation (TTF), softwood demand in the UK is at the highest it has been for some time, outstripping both 2018 and 2019. Rather than being a supply issue, it would seem that it’s more about excess demand.”

The company added: “The problem is also set to get slightly worse in the coming weeks, as the European timber sawmills traditionally used to manufacture much of the timber that’s used by the UK trade are currently shut for maintenance, repairs and holidays – so it’s going to keep the supply tight.”

The Builders Merchants Federation (BMF) also reported that the HGV driver shortages are causing increased problems with delivery of construction materials and that all regions are reporting that HGV and LGV drivers are in short supply and difficult to recruit.

Ann Watson, CEO, Enginuity Group

BMF chief executive John Newcomb said: “The supply chain is extremely stretched on all fronts, but our members are pulling out the stops to keep supplies in branches and deliveries out to customers in very challenging. circumstances. Supply remains the overarching concern and regular, accurate and transparent communication throughout the supply chain to the end client is vital.”

On behalf of specialist KBB retailers, KBSA national chair Richard Hibbert commented: “The market is experiencing delays on the delivery of goods and materials, which is making it challenging for everyone in the supply chain to plan ahead. KBB retailers have consumers ready to move ahead with projects and are having to juggle to meet start dates and keep projects on track. If the situation continues, we are also likely to experience issues with getting spares in good time, as it will not be viable for these to be delivered ad-hoc when required, as they are now.”  

Tom Reynolds, chief executive of the Bathroom Manufacturers Association is also concerned: “HGV driver shortages are an unwelcome development, but sadly are not a surprise. Hauliers’ trade bodies have been warning for some time about a real risk of the supply chains grinding to a halt, and BMA members are already experiencing some problems. A period of exceptionally high demand has coincided with limited availability of certain raw materials, problems in global shipping and volatility in costs. Bathroom manufacturers have been working flat out to prevent more widespread product shortages.”

In a bid to avert this potential crisis, Ann Watson, Enginuity Group chief executive, has called for urgent action from the Government.

She said: “We are on the verge of a crisis that threatens the viability of manufacturing across the country. We need some urgent intervention from Government before the House rises for summer recess. Manufacturing is of strategic importance to the UK economy and never more so as firms seek to assert themselves globally post-Brexit. Supply chains have already seen major disruption due to parts and materials shortages caused by Covid.”

Watson added: “Unless our supply chains function effectively, firms risk their own financial security – something that will have major knock-on effects for employment and skills.” 

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