Increases in road freight rates provide some relief but many firms battling for survival.
European hauliers continue to feel the pressure of driver shortages and rising costs but increases in road freight rates have provided some relief to their bottom line, albeit marginally, according to one major operator.
In an interview with Lloyd’s Loading List earlier this year, Sebastiaan Scholte, CEO of Jan de Rijk Logistics, a provider of specialist road freight and air freight road feeder services (RFS) with more than 1,000 vehicles, said that recruitment had become “a big struggle”.
Several months on, he reckons the situation has “changed a little bit for the better although that’s not to say we can find and drivers and capacity readily everywhere. It’s still difficult and not like where we where with the labour pool two years ago”.
He said Jan de Rijk had put a lot of effort into an “aggressive recruitment campaign, including TV ads in several European countries, which has paid off”.
The company has proposed attractive employment packages to woo new drivers, including accommodation close to the company’s HQ in the Netherlands.
Jan de Rijk has also benefited from a number of drivers, especially young ones, who have quit the profession only to return. “They’ve realised that the grass isn’t always greener elsewhere”.
Incentives have been offered to existing staff in order to keep them.
Scholte drew a parallel with US where the penury in staff appeared to be far more critical.
“A major manufacturer of trucks there told me that some US trucking companies have staff turnovers of 100%. It’s hard to believe that they are finding it so difficult to hold on to staff and of course, this all comes at a cost cost.
In Europe, the impact of the labour shortfall had perhaps been less severe as a result of some of the heat going out of the market, he noted.
“There continues to be strong demand for road haulage but it’s less intense than last year when the driver/capacity squeeze was aggravated by the surge in air cargo during the during the Q4 peak season”.
Driver shortages aside, rising costs, due principally to fuel hikes and wage increases, continue to weigh on hauliers’ operating margins so the upward trend in rates in recent months which Scholte estimates at 5-10%, even above – has been a welcome development.
“Obviously, anti-trust regulations prevent us from concerting with our competitors on this but on the basis of market feedback there is a general move towards higher rates on European routes. But we are simply recovering costs, nothing more than that. And when you consider that we’re facing even higher costs next year, with new collective wage agreements in the pipeline, the net result will probably be negligible”.
Scholte underlined that the bleak backdrop to the rate increases hikes is that a good number of haulage firms are battling for survival.
“Every week in the newspapers and transport trade publications in the Netherlands you read of companies going bust and it’s incredible that this should be happening when market conditions are good and demand is strong. But that’s the grim reality”, Scholte concluded.