Yahoo Finance Tesco sounds alarm over driver shortages
Supermarket bosses are calling for trucking rules to be relaxed urgently, after Tesco warned that a shortage of lorry drivers is forcing it to throw away almost 50 tonnes of food each week.
Senior industry figures and representatives from the Road Haulage Association (RHA) met with ministers this week to warn that supply chains are in "growing peril" due to the crisis, which was partly brought on by a drop in migrant labour due to lockdown rules and Brexit.
They are seeking the reinstatement of emergency changes which were introduced to cope with panic buying in March last year when Covid first hit, such as allowing drivers to legally work longer hours and permitting deliveries later at night than current cut-offs times allow.
Tesco said that it is "going into overdrive" to find more workers, with a massive hiring spree which could increase the pressure on rivals.
About 48 tonnes of food – enough to fill two trucks – destined for the shelves at Britain's biggest supermarket is being thrown away every week as a result of the shortages.
Companies are battling against an estimated shortfall of some 65,000 drivers, mainly because EU workers had left the UK and the suspension of driver training and testing during the pandemic.
Duncan Buchanan, policy director at the RHA, said the vacancy rate now stands at around 12pc - a similar level to a shortfall at meat processing plants which could force grocers to import foreign pigs in blankets this Christmas.
He said: "Member after member has said they’ve never seen it at this level ever before.
"This problem we've got now is not just a couple of weeks. It’s going to be like this until the end of the year if we don’t start addressing it.
"Food is not going to run out, but we will see a reduction in choice."
Some industry leaders have even called for the army to relieve the pressure in the short term, although Government sources insist this will not happen. Other options could include seasonal visas for drivers.
Ken Murphy, chief executive of Tesco, said that if the crisis worsens then the retailer might have to pay more to attract drivers. It is estimated the shortage has sent truckers' wages up by a fifth.
Mr Murphy insisted that there were no gaps on shelves because of the shortages and said that the company's supply chain is "in good shape".
He added: "What I’m hearing is we can manage it and we have to play it as we see it.
"Once there is an understanding that there is availability of work [at Tesco among drivers] and rates are potentially more attractive, they will fill very quickly."
James Bielby, chief executive of the Federation of Wholesale Distributors, said that unless the Government steps in to help alleviate the problem, pubs, bars and restaurants are likely to be the most affected by the shortages as drivers are snapped up by bigger companies that can pay more.
He said: “There will be no Freedom Day [on July 19] without some form of intervention."
Mr Bielby said that smaller firms could bear the brunt of the staffing crisis as "those who can pay the most, have access to the biggest pool of people".
Andrew Opie, director at the British Retail Consortium, said that supermarkets have been working closely with their suppliers to ensure that consumers still have access to the same selection of goods.
He said: "Government must rapidly increase the number of HGV driving tests taking place while also looking for a longer term solution to this issue."
A spokesman for the Department of Transport said: "We have met with industry figures to discuss HGV driver shortages and possible solutions around recruitment and retention.
"Most of the solutions are likely to be commercial and from within industry, with progress already being made in key areas such as testing and hiring, and a big focus towards improving pay, working conditions and diversity.
"Our new points-based immigration system makes clear employers should focus on investing in our domestic workforce, especially those needing to find new employment, rather than relying on labour from abroad."
Earlier this month, the FTSE 100 discount chain B&M revealed it was struggling to hire both drivers and workers for night shifts at its distribution centres.
Tesco's total retail like-for-like sales rose by 1pc to £13.4bn for the 13 weeks to May 29, and by 8.1pc compared to the same period two years ago.
Shares fell 2.4pc to 225p.
