Haulage issues could presage brand shortages

A perfect storm of Brexit, COVID and tax changes is breaking over the UK haulage industry, with a shortage of drivers likely to affect FMCG brands to varying extents later in the year.

What’s happening

• Brexit and COVID have meant many European-origin lorry drivers have returned home, according to the Financial Times.
• New IR35 tax rules on self-employment have exacerbated that trend. 
• COVID has led to some 28,000 domestic HGV driving tests being cancelled.
• The Government ended a relaxation to driver hours at the end of March.

Why it matters

Mental and physical availability remain crucial to the marketing of FMCG brands, but the latter is becoming an issue. The Grocer has warned that driver shortages could mean convenience stores face empty shelves as wholesalers put caps on the amount of products retailers can order.

In the short term, rising transport costs could be reflected in increased product prices. As the UK emerges from lockdown, with most rules due to be lifted by June 21 and with people anticipating a greater sense of normality, they could be in for a rude shock.

Key quote

“To the public as opposed to the industry this is something of a quiet storm but it could soon turn into a hurricane with shortages evident, escalating stress and tension among suppliers and hauliers” – Rod McKenzie, managing director of policy and public affairs at the Road Haulage Association.

Sourced from Financial Times, The Grocer