On the road to nowhere

ON THE ROAD TO NOWHERE What’s driving the truck driver shortage and is there light at the end of the tunnel?

2024

Driver shortages have been a persistent challenge for the logistics sector for many years. In 2023, in Germany alone, there was a shortfall of over 70,000 truck drivers, up from 53,000 the previous year - a trend that continues to rise. This calls for immediate action from shippers and freight forwarders in trade and industry who want to keep their show on the road.

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On the road to nowhere

The importance of the trucking industry You probably already know that road transport is the backbone of the logistics industry and a key driver of the global economy, but did you know just how significant a role it plays? Let’s take a look…

The trucking sector alone generates revenue equivalent to 3% of global GDP - outperforming all other forms of transport combined, and generating over three times the revenue of any single form of transport.

Its flexibility and cost efficiency make road transport ideal for a wide range of distances and operations, from short-haul to intercontinental routes.

Road transport is crucial for business, logistics, and society, serving as the first and last leg of nearly every supply chain journey.

Trucks complete journeys by connecting different forms of transport and linking producers with consumers, making them vital to the intermodal transport system.

The trucking industry is also a major employer and supports social cohesion, creating jobs and driving economic growth in rural and remote areas.

What’s driving the truck driver shortage? | Scoutbee

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Source: IHS Markit – S&P

The short-term consequences of the truck driver shortage include contribution to increases in freight rates and inflation, supply chain disruptions and/or delivery delays, sluggish GDP growth, and an under-skilled driver workforce, which could potentially cause higher CO2 emissions. In the longer term, we will likely see an acceleration in automation (self-driving trucks).

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What’s the current situation?

Over half of European trucking companies are unable to expand due to a lack of skilled workers, as highlighted in IRU’s 2023 study of over 1,000 European road transport operators. The driver shortage has led to reduced productivity for nearly 50% of companies and a revenue decline for 39%.

Currently, the EU, Norway, and the UK are short more than 233,000 truck drivers, a number expected to surpass 745,000 by 2028 as many drivers retire without adequate replacements.

The truck driving workforce in Europe is aging, with an average age of 47. A third of drivers are over 55 and set to retire within the next decade, while less than 5% are under 25.

What’s driving the truck driver shortage? | Scoutbee

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IRU’s latest European truck driver shortage report clearly demonstrates that road freight companies, and consequently EU trade, are being impaired by the shortage of drivers.”

IRU Director of EU Advocacy, Raluca Marian

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Which industries are the most affected?

The truck driver shortage affects many different industries and has a knock-on effect on various aspects of economic and daily life. Among others, the industries affected include: Logistics: The logistics industry relies heavily on truck drivers to transport goods and maintain its supply chains. The shortage of drivers creates bottlenecks and causes inefficiencies in logistical processes.

Retail: A significant percentage of goods reach retail stores via road transport. The lack of drivers leads to delays in the delivery of goods and negatively impacts the availability of goods in store.

Construction: The construction industry relies on the transportation of materials and supplies to complete construction projects. The shortage of drivers leads to projects being stalled due to a lack of materials and can contribute to major increases in costs.

Food: The food industry depends on reliable transportation of fresh products to ensure supply to the general public. The shortfall in truck drivers can lead to supply chain bottlenecks and affect the availability of fresh produce in stores.

Waste disposal: The lack of truck drivers can lead to delays in collecting and disposing of waste, leading to a rather unpleasant situation for city dwellers in particular…

What’s driving the truck driver shortage? | Scoutbee

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Why is it so difficult to find truck drivers?

According to a consortium study on capacity bottlenecks in logistics with a focus on drivers, the lack of drivers costs the German economy alone ten billion euros a year. Based on the current statistics, there was already a shortage of 70,000 professional drivers in 2023. Looking at the forecasts, the shortage will increase by 20,000 drivers every year. The study identifies some of the main reasons for the growing driver shortage: • The profession suffers from a negative image, with drivers expressing dissatisfaction with wages, recognition, and working conditions.

• Challenges such as balancing work and family life, high training costs, and an unsatisfactory working environment deter new drivers.

• Poor working conditions include high stress, unsafe environments, and lack of social interaction.

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• Inefficiencies in logistics chains and tight delivery schedules worsen the shortage.

• Infrastructure issues like roadworks cause delays, and a shortage of parking spaces adds to driver frustration.

• Demand fluctuations and vehicle availability bottlenecks also contribute to the problem.

On the road to nowhere

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While the causes behind the shortage of drivers are diverse, the EU and governments must play their role in eliminating barriers to entry and supporting more attractive working conditions.”

IRU Director of EU Advocacy, Raluca Marian

What’s driving the truck driver shortage | Scoutbee

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Some facts and figures 6% women

China 6%

94%

U.S. 8%

men

The share of women drivers remains extremely low at just 6%.

China (6%) and the United States (8%) have the highest share of women truck drivers.

Across the globe, the share of drivers under 25 is below 12%, and less than 5% in Europe. The only two countries surveyed with a higher share of drivers under 25 are China (17%) and Uzbekistan (25%).

Age representation 12% Global <5% Europe 17% China 25% Uzbekistan Total

The “school-to-wheel” gap is a key challenge facing the industry. The minimum driving age for international freight transport is 21 in many countries.

High training, license, and qualification costs also make it expensive to become a truck driver. For example, in France, the average cost to obtain a truck driver license and a Certificate of Professional Competence is €5,250, over three times the minimum monthly wage.

(Source: IRU Driver Shortage Global Report 2022)

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Driver shortage forecast 2028 calculation - Europe example Total truck drivers needed (millions) +13% driver demand growth 7% unfilled positions

3.4 0.2

0.04 0.2

3.9 0.7

-0.5

3.6

3.2

2023

3.9 0.3

15% drivers retired

2028 (FC)

DRIVERS IN OPERATION

17% unfilled positions

3.2

2028 (FG) - w/o retirements

UNFILLED DRIVER POSITIONS

RETIREMENTS

Source: IRU Driver Shortage Report 2023 Freight - Global

Forecasting model methodology:

• More drivers needed: Based on road cargo ground transport revenue (real) growth, demand for road goods transport services and driver demand will increase at the same rate.

• Retiring drivers: We assume that 1) drivers over 55 years have the same age distribution as the total labor force and 2) drivers retire at 65 years old in Europe and at the minimum legal age in other countries.

• Driver productivity (level of service provided by the driver per unit of time) and the level of attractiveness of the profession remain the same.

Source: IRU Driver Shortage Report 2023 Freight - Global

What’s driving the truck driver shortage? | Scoutbee

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There is light at the end of the tunnel After all that doom and gloom, let’s brighten the mood a bit by looking at some potential solutions to the truck driver shortage.

The good news is that more than 70% of European companies are pursuing measures to retain and attract drivers.

Here are some useful tips to address the truck driver shortage:

Partner with other companies:

Promote diversity and inclusion:

Attract more women:

Offer more flexible working models:

Collaborate with trucking firms to share resources, broaden applicant pools, and offer joint training initiatives, potentially including subsidies or financial aid for new drivers.

The availability of secure working conditions and access to well-equipped rest areas are primary concerns for women. Improving them is key to attracting more women to the profession.

Offer training programs:

Create training and educational programs to attract younger drivers, ensuring a steady pipeline of skilled professionals.

A more diverse workforce can reduce driver shortages by attracting people from different ages, genders, and ethnic backgrounds.

Introducing more flexible working models, such as seasonal or parttime work, could make the trucking profession more enticing to a wider range of potential employees.

Leverage technology:

Optimize routes and reduce driving times with technology to enhance efficiency and productivity for existing drivers.

Implement incentives:

Use bonuses and perks to increase driver retention and make trucking a more appealing career choice.

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On the road to nowhere

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Regarding barriers, for example, the ‘school-towheel gap’ should be closed by allowing 17 year olds to gain driving experience alongside a driver trainer, and the recognition of third-country driving licenses and qualifications should be harmonized at the EU level. Drivers’ resting conditions should also be improved, including by building more safe and secure parking.”

IRU Director of EU Advocacy, Raluca Marian

What’s driving the truck driver shortage | Scoutbee

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In conclusion, the truck driver shortage poses significant challenges for the logistics industry, affecting productivity, supply chains, and economic growth across various sectors. As the aging workforce retires and fewer young drivers enter the profession, the shortage is set to worsen unless meaningful actions are taken.

By adopting strategic solutions such as partnerships, training programs, incentives, and technological advancements, the industry can begin to address these shortages. It’s crucial for all stakeholders to collaborate and implement these measures to ensure the sustainability and resilience of the logistics sector moving forward.

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