UK logistics boss predicts labour shortage will last well into next year

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The boss of one of the UK’s largest logistics companies has warned of a “scrap” to secure lorry drivers for the peak retail season and predicted that labour shortages will last well into next year.

Wincanton, which provides haulage and warehouse services, said subcontractors were charging as much as 40 per cent more than last year for HGV drivers, while wages for those it employs have gone up by a low to high single-digit percentage.

James Wroath, chief executive of the Chippenham-based group that employs about 5,000 drivers, said the tight labour market would make this year’s peak delivery periods for Black Friday and Christmas extremely challenging.

The problems were a result of “the perfect storm of Brexit and Covid” he said.

The UK has an estimated shortage of 100,000 truck drivers, which has led to gaps on supermarket shelves and contributed to delays at ports.

However Wroath was more upbeat on the outlook for next year. “The publicity around the pay is attracting more candidates. We’re more optimistic,” he said. “The whole issue is going to take six to 12 months to really flow through to have enough resources.”

He added that Dave Lewis, the former Tesco executive appointed to run the government’s Supply Chain Advisory Group in October, had been instrumental in speeding up driver testing.

In results published on Friday, Wincanton reported a 40 per cent rise in half-year pre-tax profits to £27m. Revenues increased 20 per cent to £690m.

Shares in the group rose 3 per cent on Friday. Steve Woolf, an analyst at Numis, said the shares had been depressed by the industry-wide labour shortages but those concerns had been “overdone”, in part because most of its contracts allow for extra costs to be passed through to customers.

Even so, Wroath warned that costs were likely to continue rising in a tight labour market.

“I think pay rates and cost pressures will continue in order to ensure we have enough people,” he said. “We’re three to five years from solving those issues.”

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