The real story behind Europe’s haulage crunch

By Pete North - July 10, 2021

There is a shortage of heavy goods vehicle drivers. We have left the EU. Therefore, Brexit has caused a shortage of drivers. That’s the version the remainers and the anti-Brexit press are retailing because that’s the fullest extent of their interest in the matter. Brexit is baaaad!

That’s actually a shame for them because they’re missing out on a much, much bigger story. It is well established now that the haulage industry is struggling to recruit and retain, largely because pay and conditions suck. It costs a lot to qualify and the job now requires a broader array of skills and certifications – not least because of the array of equipment and rules drivers must be current with. All the while British drivers are having to compete with Eastern European drivers who have a more liberal interpretation of the rules and will work for substantially less.

But British drivers are not alone in this. This is very much and East-West division in the EU and French drivers aren’t very happy about it either. In order to head off growing euroscepticism in France, the Commission developed a series of reforms known as the Mobility package. These rules, in effect, suspend aspects of the single European haulage market while strengthening the labour rules in the industry, restructuring rest periods to include hotel stays and a return to base every eight weeks to prevent the phenomenon of underpaid eastern European drivers touring most of the year and living in their cabs. The Eastern European haulage industry has dubbed it the “Macron Package”.

A number of eastern EU member states attempted to block these rules and there are now fifteen cases in front of the ECJ in an attempt to prevent their implementation, all the while, in some parts of the industry there is next to no enforcement. Bulgaria and Poland in particular have a vested interest in maintaining the status quo and they argue that not only do the rules violate the principles of the single market, they will lead to an increase in empty trucks in the circuit as they are forced to return to base. KPMG estimates the share of empty mileage will increase to 50 percent.

Most haulage firms polled in Poland agree the Mobility Package will increase in costs of their transport activity. This translates to the investment mood in the industry. Only every fifth respondent intends to continue investing in equipment and new solutions. Meanwhile the Bulgarian industry believes it will lead to a wave of bankruptcies.

As to what will actually happen, it’s difficult to say. Much of the scaremongering resembles “project fear” and the KPMG report it stems from was probably paid for by lobbyists. Always worth taking with a pinch of salt. We can, however, safely say that this will reduce the number of drivers in circulation and costs will rise, leading to food inflation across the EU.

But then this is a damned if you do, damned if you don’t situation, being that low pay and poor working conditions means that western EU drivers leave the trade and refuse to come back to it (much like the British) leaving the Eastern European firms plugging the gaps with non-EU drivers recruited from the Philippines – with all the attendant safety and training problems – and just as the EU is beginning to realise immigration is an urgent pan-EU concern.

This then is not to say the EU is wrong to implement this long overdue package – and had they acted sooner, British truckers may not have ended up backing Brexit. But as is usual for the EU, it took a long time for them to realise what was happening, and much of it was the unintended consequences of EU measures in the first place. The regulatory response is slow, and won’t be fully implemented until 2025, and unless the EU wants to pick a fight over enforcement in the height of the Covid crisis, there is a strong chance they will be ineffectual. Classic EU.

But then this isn’t just the handiwork of the EU. The current UK crisis was picking up pace in 2014, and even then, most of the reasons given then and now are the same as those detailed in a 2009 European Parliament report. It says “When looking at policies and measures adopted at the EU level to tackle the shortage of drivers, it is to be noted that, apparently, so far no specific measures have been taken to address the problem of lorry drivers’ skills and road expertise in transport, or in any case no specific measures adopted at the national level have emerged from the study.

Essentially what we’re experiencing now is the culmination of a decade of policy neglect on something that has been known about for well over ten years, merely exacerbated by Covid and made acute by the termination of EU freedom of movement. Any way you cut it, though, the system was always going to come to a crunch (with or without Brexit). For me, though, it really spells out the dysfunctionality of the EU, and the inherent improbability of designing a fair system that fits all requirements of the entire continent, diverse as it is. A pan-EU transport regime was always going to result in a race to the bottom.

What’s interesting about this is that there’s virtually nothing about it in the British press and very little in any mainstream press. As usual, were it not for EURACTIV, it might have slipped me by entirely. It also reveals a lot about the narrowness of the UK debate about haulage and wider EU trade, with supposedly “outward looking” remainers and “trade experts” (think tank soy-boys) absolutely oblivious to what is a major continental problem. Global, in fact.

The EU thinks the problems can be fixed by way of more harmonisation of social protections, (more Europe) but this means converting traditional labour rights into market levelling mechanisms, for a market that never will be uniform throughout. The upshot of that is that labour rights are then devised not by unions and political parties, but by economic and legal technicians looking to iron out the bugs in a logistics system – which basically means removing the distinctly unlevelling influence of democracy and national sovereignty.

To a point, the EU is not wrong. If there is to be functioning EU wide single market in goods and services then it cannot tolerate the messy disparities between social systems – but it doesn’t have those harmonising powers and will likely never get them – particularly with France in the mix – and especially not while Britain was a member. Thus, EU haulage will remain in a near permanent state of dysfunction.

This is partly remedied for the UK which is now in a position to modify its own rules without the horse trading and having to seek permission from Brussels. We can rapidly adapt our rules to meet problems as and when they arise (which is at least half the point of Brexit). The first such instance is the additional driving hour granted to UK drivers, which is causing considerable consternation among the anti-Brexit crowd, despite it (ironically) replicating one of the changes in the EU Mobility Package.

This, however, is only a temporary measure pending deeper reforms. It is unlikely to fix the central problem, and a systemwide overhaul is needed. Better pay, training and facilities for drivers is needed, along with better treatment from employers. They often have to work to unreasonable, inflexible schedules, at dangerous times in the day and have to perform heavy lifting, often alone after a long drive. It’s a dangerous job with many health risks, with antisocial hours, yet you can make more money pushing spreadsheets in an Amazon warehouse.

We are now looking at a compete restructuring of the industry which will no doubt raise costs substantially, adding to an array of pressures on household budgets. That in turn will drive demands for better pay across the spectrum, particularly if the Tories are hell bent on implementing Net Zero and diverging from the single market in other areas. Moreover, haulage industry is only part of the problem. The food production industry as a whole suffers from many of the same problems and a similar shortage of qualified staff. Essentially, nothing can remain the same, and we can expect a decade or more of turmoil and uncertainty.

As with our haulage problems, so much stems from bureaucratic inertia and policy neglect – and it’s beyond the abilities of our media and political class. We have ignored a whole spectrum of problems, relying on a steady influx of immigration to bail out farming, the NHS, haulage, food processing and waste disposal. This was never sustainable and in fact, the overreliance on cheap labour has exacerbated many of the problems, and hidden some unwholesome trends as we disincentivised learning a trade and socially devalue non-graduate jobs. We’re going to have to rethink education and bring back the polytechnics.

Though the single market is an impressive piece of legal technology, and a fine theory, more practical examination of it shows that it was built on a foundation of sand. Had we remained in the EEA or even the EU, we would still have bumped into these problems eventually. It seems the west now has to get to crisis point every single time before our indolent political class even notices there’s problem. Brexit perhaps was the much needed wake up call – before it got any worse.