ANALYSIS - After COVID-related eco-health crisis, UK hit by logistics crisis this time

By Huseyin Emre Eseceli

*The author is a MEng. at University of Southampton

SOUTHAMPTON, UK (AA) – The UK is in trouble after Brexit.

The shortage of truck drivers has led to a disruption of the supply chain in the UK in the post-Brexit era. Empty shelves in supermarkets, long lines at gas stations and closing gas stations have put the British government in a growing crisis, which the government is struggling to manage.

The 1918 Spanish flu pandemic was one of the greatest medical disasters of the 20th century. It was a global health problem that affected every continent in which more than 50 million people died. One of the countries most affected by the Spanish flu was the UK, where about 250,000 people perished. A century later, a new pandemic again knocked on the UK’s door and approximately 136,000 people died of COVID-19 this time. It has caused a devastating eco-health crisis in the UK.

In November 1973, many managers of the British petrol stations announced the closure of their businesses due to the fuel shortage, also affecting the UK, following cuts in oil production implemented by the Arab crude oil producing countries.

Today, the oil crisis leads to queues in front of stations and closures of stations, just like 50 years ago. The emergence of the driver shortage of oil companies after Brexit led to the images again of 50 years ago: the lines of vehicles formed at petrol stations to fill up with fuel and closure of stations due to lack of fuel. BP and Tesco Alliance's announcement that a small number of petrol stations will be temporarily closed due to a lack of transport drivers in the country has caused concern among vehicle owners. Last weekend, car owners who thought that they would experience a shortage of gasoline due to the decrease in the number of stations formed long queues in front of the gas stations in London.

According to the Guardian, three of the UK’s biggest operators of petrol stations have warned of fuel shortages with BP, saying up to 100 of its stations were short of at least one grade of fuel and several forced to close entirely. Gordon Balmer, executive director of the Petrol Retailers Association (PRA), said some sites were experiencing delays, particularly those in London and the southeast of England.

BP said it was cutting deliveries to about 90% of its stations in an attempt to distribute supplies evenly. The PRA is urging people to avoid panic buying, but advising drivers to keep their tanks at least a quarter full in case they have to drive to another station to fill up.

The striking decline in the fuel stock in the country was also seen by the indicators. Stocks, which started to decrease after Brexit, fell by half in the last six months.

According to data by the UK Office for National Statistics (ONS), the number of trucks and truck drivers, which was 301,497 in the first quarter of 2020, decreased to 232,942 as of the second quarter of 2021. Experts in the UK state that the total number of transport drivers in the country is about 100,000 less than what is currently needed.

According to the report by the Road Haulage Association, which represents the transport industry, the main reasons for the decrease in the number of transport vehicle drivers are "drivers’ retirement," "Britain leaving the EU," "some changes in payrolls known as IR35," "drivers choosing other sectors," and "low wages and the epidemic". The shortage of truck drivers was down due to COVID-19 disrupting the qualification process and preventing new labor from entering the market. Besides, some pinned the blame on Brexit and poor working conditions forcing out foreign drivers.

The inadequate number of truck drivers causes serious disruptions in the logistics sector, and it has the potential to turn into a risk that can affect all elements of the country's economy if a solution is not found in a short time.

Due to the uncertainties in the UK’s immigration status following its exit from the EU, an increasing number of EU citizens and truck drivers prefer to return to their own countries, and then the adverse conditions in the pandemic environment stand out as the most important factors in the emergence of the crisis.

This logistical problem, which caused the international supply chain to break in the UK, created panic among the people and caused the grocery shelves to be empty. The economic fallout from the COVID-19 pandemic and Brexit is pushing up the cost of essentials such as food and clothing as well as travel and even managing your home. Widespread rise in commodity prices – from wheat to sugar, coffee and palm oil – are set to be combined with shortages of truck drivers and food processing workers as well as cost rises in supplies, including packaging to drive up prices in supermarkets this autumn and winter.

The transportation crisis, which has been growing since the beginning of 2020, has left the shelves empty in various markets in London in recent months, especially vegetable and fruit products and ready-made waters.

Tesco, one of the UK's biggest supermarket chains, has warned the government that if the driver shortage continues, customers may head to the markets in panic before Christmas.

Morisons, one of the leading supermarket chains in the country, stated that if the number of drivers in the transportation sector continues to be insufficient against the demand, product prices in the markets may increase.

McDonalds recently stopped selling milkshakes and bottled beverages, citing disruptions in its supply chain.

The Bank of England's assessment of business conditions in April, May and June of this year found that delays in the shipping sector caused shortages of certain products, such as furniture, car parts, and electrical goods.

The government on Sunday announced a plan to issue temporary visas for 5,000 foreign truck drivers.

The UK Department For Transport announced that 5,000 fuel tanker and food truck drivers will be granted temporary visas until the end of December to avoid empty shelves in some supermarkets and long queues at gas stations due to the shortage of trucks and truck drivers.

But business leaders have warned the government's plan is a short-term fix and will not solve an acute labor shortage that risks major disruption beyond fuel deliveries, including for retailers in the run-up to Christmas.

The industry estimates there is a gap of 100,000 truck drivers partly due to the COVID-19 pandemic and partly Brexit. About 25,000 HGV drivers from the EU left during 2020 and did not return, and there is a backlog of 40,000 waiting to take their HGV tests.

According to the Road Haulage Association, the government is not taking the problem seriously enough. “The average age of a truck driver in the UK is 57, every day this problem is just getting worse as more and more retire,” said Rod McKenzie, managing director of policy and public affairs at the association.

If necessary, Transport Secretary Grant Shapps said, British soldiers can be assigned to use fuel transport vehicles according to the contingency plan. "If it really helps, we will bring them (to duty)."

As in the lockdown during the pandemic process, we may soon see the British army with the military tanks on the roads.

The 1973 oil crisis created a break in the British foreign policy and enabled Britain to develop warm relations with oil-rich Arab countries. This time, the UK can change the immigration policy and take more refugees to the country, which can ease the employment market.