HOW TO MANAGE DRIVER AVAILABILITY AND COMPETENCYWITHIN CHEMICAL TRANSPORT

ISSUE TEAM DRIVER AVAILABILITY & COMPETENY

Prepared by B. Haidacher & Cefic-ECTA Issue team

23 November 2017

23-11.2017

2Company Confidential

Agenda

• The European Transport Market- Whathappend?

• Some survey results• What’s up today & future trends?• How to solve the problem?• Status Quo - Issue Team Driver Shortage

Open Panel Conversation – Q&A

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Where are the captains of the road?

4Company Confidential

The problem is not new: 2007 = 2017

The European Transport Market –What happened?

DEMAND

• Economies back on growth path – not just EURO-zone, but also Ukraine, Russia … dynamic demand eastern european loading capacities float back to Ukraine/Russian markets

• Exponential growth in transport as Consumer Behaviour changes instant delivery + returns 1m3 product = ? m3 of transport?

• Amazon / Zalando / Outfittery / Alibaba and others pulling capacity away from traditional shippers

• Automotive sector re-shapes Supply Chains increase line hauls

GDP Growth in the EURO-Zone

AutomotiveJIT/JIS, line-haule, closed loops

Innovative Equipment, long-term contracts

Market update – Innovtors & game-changers

Fashionsophisticated Supply Chains

Disruptive Developments

excessive demandlack of ressources

1m3 product = ? m3 transport?

The european transport market –What happend?RESOURCES

• Lack of infrastructure - rail, road, terminals, secure parking

• LegislationLack of standardisation / harmonisation of driving bans, holidays, weight limits, taxes, maut etc.

• 55 hours weekly working time – different driving bans in different countrieswith possible extension but not more than 110h in 2 weeksMandatory 45h break/week

• BE, FR; DE since May 1st (= all main transit corridors), GB- Drivers must not spend the mandatory break in their cabs but stay in a hotel,

leaving truck and goods unattended- Fines amount to and exceed driver‘s monthly gross salary- Transport companies risk losing license

• NEW border and hinterland controls, despite Schengenwaiting times & delays

Market update – on the road again!

Exposurecontrolsdelays

… but it‘s not just transport

• Lack of WH space, forklift-drivers etc.Optimisation of loading staff and/or facilitieslead to unappropriated outsourcing requests. The driver = a driver, but not an employee of the DC

• Lack of fitting slotsSlot time planning does not reflect circumstances beyond drivers‘ control such astraffic jams, weather conditions and other factors, etc.

• Site regulations and requests- specific language skills- complementary, non standardized load securing devices- driver refusals

Waiting time = (lost) working time of the driver

Study: How do driver’s see the issue?

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Source: Drivers Feedback study 2017Research for TRAN CommitteeRoad Transport Hauliers in the EU

Learnings from world bank study

Shortage is the result of numerous, inter-related factors …

• Growth in the demand for road freight transport

• Relative unattractiveness of the occupation

• Low wage rates

• Working conditions

• Changing nature of the job

• Image

• Increased regulation

• Demographics

• Qualification requirements

ECTA Survey - solutions overview

What‘s up today & future trends …

• Severe lack of capacity – severe lack of drivers:• Up to 100.000 drivers in PL (source: polityka.pl; 2017)• 45000 – 50000 drivers in UK (source: study of world bank group; 2017)

• 84 % of European road haulage companies having difficulty recruiting (competent) drivers.

• 50.000 drivers retiring every year in Germany vs. only 10.000 start in the same period extreme situation in France and the UK as well, PL reduced retirement age

• A huge number of drivers are giving in – especially those from Central Eastern Europe; orreturn to domestic markets

• Income gap decreasing vs. other jobs – 5 days week at home and better social life

• Carriers/Drivers going for less complex shipments – 24/7, no PPE, no timeslot,no language skills, light weight cargo, etc.

• Electronic market places, platforms and reverse auction toolsare not offering any capacity and / or commitment

Driver Shortage is hitting the

Chemical industry transport capacity

15Company Confidential

… how to solve the problem?

There is no single solution – several initiatives could help to easethe current problem and keep the future shortfall under control:

• Increase wage level – impact on transport costs

• Improve working conditions

• Government intervention• Image campaigns• Entry barriers• Support for qualification

• Change “back” the nature of the job – “Drivers are drivers”• Focus on intermodality• Drop-trailer fleets – decouple loading from driving

• Optimization in transport planning• Accurate forecasts (weekly, rolling …)• Extended transit times• Realistic site access rules

Issue Team Driver Shortage

What are the practical actions and solutions to improve “Truck driver Availability & Competency”?

1. Truck Driver Availability

2. Truck Driver Productivity

3. Truck driver qualification

4. Legal barriers

5. Truck driver job attractiveness

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JOINT ANALYSIS

Study’sviews

The top 4 Solutions Framework

• Harmonized driver training programs, trusted driver and carrier

Driver

Qualification

• Faster GATE IN/OUT processes, trustedloading/unloading sites, betterinfrastructure

Site

Qualification

• Harmonize legislation and adapttowards transport industry capacityneeds

EU Mobility Package

• Attract more young drivers, facilitatetraining….

EU Drivers Fund

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PANEL CONVERSATION

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From your total truck driver population, what % ‘open vacancies’ do you currently have for your own truck drivers?

No difference in % vacancies per company size

ECTA-Cefic Survey July 2017% Open Vacancies = 10% in 2017 vs 6% in 2007

21 respondents - 4 respondents do not have own drivers 25