Radar19:
Rjan:
If the “driver shortage” isn’t yet hurting operators (with many fatalities), then there isn’t really a shortage yet.
“Incoming”. You forgot that part. Obviously things can change and maybe the industry will wake up at some point and reliese that they are fast heading for the bottom and actually do something to stop it but what if they don’t? We won’t be part of the EU anymore so no quick assess to a limitless labour market. How long before things hit the fan and the government is forced to step in? Isn’t it a case of “if haulage stops, this country stops”?
No, it isn’t a case of haulage stopping, it is simply that there will be a crunch point at which firms either cease doing the things which hinder recruitment and retention, or they will have to leave the market (and the hauliers remaining in the market acquire their vehicles, their drivers, and their customers).
Lots of people seem to talk about this problem as though it’s an asteroid about to hit Earth.
In reality, it’s as simple to solve as offering permanent contracts to brand new drivers (and having to pay for the damage they cause - which is probably only a tiny cost in the scheme of things), reducing hours by reducing the number of drops that a single driver makes (or distance he travels), and increasing pay (by charging customers more for the service).
The only obstacle which prevents employers doing these things now, is the risk that a different employer will not do these things, and will undercut the work. Obviously, if the lower-price employer cannot get any drivers anymore (because of his inferior offer to drivers), then the good employer step in and can name his price to the customer (which will be the price necessary to get the drivers).
That’s why I say that what we are really waiting for in this market is a huge clean-out of operators - more operators need to be squeezed until their pips squeak and they fold completely in bankruptcy. Only then, once competition in the market abates (by the vanquishing of uncompetitive operators), will pay and conditions improve and the appropriate number of drivers will then be drawn back into the market.
The violence in this process will not generally be felt by customers, except in terms of the prices they must pay. In the short term, all hauliers will experience a crisis in profits, as they are forced to pay drivers more than they charge customers - hauliers will “buy work” in other words (to keep their operation ticking over at a small loss, on the hope of future improvement).
If they didn’t buy work but still stayed in business, their losses would be even more grievous, because of the cost of maintaining wagons and buildings that wouldn’t be used.
What will eventually happen in this process though is that ten thousand directors of two-bit haulage firms will be put out of business - either because those directors choose to stop buying work and wind down their operation in an orderly fashion (and recover their remaining capital), or else because their bank managers call time on their buying of work and finally shutter their firms.
The eventual increase in haulage prices will reflect the real long-term cost of providing haulage services, which customers are not currently having to pay for because hauliers are engaged in ruinous competition. When hauliers do go bust, goods will still get moved, just by fewer hauliers and at higher prices. And with competitors out of the way, remaining hauliers will be able to charge the higher prices.
Perhaps for the vanquished competitors, the effect is akin to an asteroid hitting Earth - but in truth, for them, bankruptcy is just as unstoppable as an asteroid.
