Supply Chain Crisis – Current State of Play

Europe is in the midst of a supply chain crisis. Ships, trucks and containers are all held up at different points all across Europe and the globe. The crisis has been developing over multiple years, but it has only recently been brought to the attention of the public, as it has reached a critical point with empty shelves and lack of fuel.

But who is at fault? Is COVID the culprit?

There are no simple answers.

COVID-19. Early last spring, European ports faced up to a 50% decrease of requests for transport of goods on the main Far East – Europe container-shipping trade route. Of course, this situation generated severe consequences, especially for ports reliant on China-Europe trades.

The increase in freight rates started in 2020. As shipping capacity became scarce, shippers and freight forwarders could not ship or secure delivery for their containers. Freight rates increased as a result, and continue to be extremely high.

For ports, timing and schedules are very important. However, only 30% of the megaships respect their schedule. This affects container terminals greatly, particularly automated terminals that do not have the capacity and flexibility to speed up unloading-loading processes.

Against this background, from Autumn 2020, the pressure on ports became visible as containers reached ports simultaneously and ports were stuck with uncollected containers. Port congestion was predictable and unavoidable, as the shipping sector started to push for an increase in the size of container vessels.

This has inevitably increased the pressure on port workers, but they have managed to deliver. However, fatigue levels and stress have risen with the increase in pressure to meet congestion.

The challenges of high peaks in ship-to-ship operations and yard activity at the terminals directly impact land-side operations, particularly truck arrivals and departures.

What’s more, Europe is facing a shortage of truck drivers, something that has acutely manifested itself in the UK. But this shortage is not just a UK problem, but a European problem. While 75,000 truck drivers are needed in the UK, over 120,000 truck drivers are needed in Poland, 70,000 in Germany, and 5,000 vacant jobs in Belgium. This problem will only intensify as 42% of the truck drivers will retire in 10 years. This problem has been in the making for years, ignored by all except transport workers and the trade unions that represent them.

ETF has been warning about the shortage of truck drivers for years. The facts are clear, the lack of decent jobs is causing the lack of drivers in road transport! Without decent conditions in road transport, it should come as no surprise that young people and women show little interest in joining the sector, while it is also becoming increasingly difficult to convince professional drivers not to quit their jobs.

Similar shortages of workers may soon occur in the rail sector. Intensified and increasing liberalisation puts the sector under more pressure, leading to it struggling to attract new workers, especially young and women workers. The ETF’s recent study has already flagged the real and present risk of future staffing shortages as older workers retire.

There are many other issues along the supply chain!

Several hundreds of thousands of seafarers are stuck on ships for months, sometimes years, on end in different parts of the world. Seafarers play a crucial role in maintaining global supply chains, delivering essential medical supplies, food and energy. Crew changes and repatriation have been and continue to be a major challenge for maritime transport. Seafarers are pushed to their limits and subject to strenuous working conditions, becoming physically and mentally exhausted. Obstacles on crew changes and repatriation have become a humanitarian, safety and economic crisis.

The shortage of aviation workers is causing air cargo to pile up. The precarious nature of work for ground staff and those workers in air cargo leads to a shortage of air cargo workers.

This crisis is hitting and affecting the entire supply chain and all modes of transport. The impact of COVID has exacerbated old problems which have been present in transport for years – this is the reality we are now seeing manifesting in transport in different ways with disastrous effects for transport workers.

This problem won’t be solved by itself overnight. The supply chain requires a structural change in order to offer decent jobs and attract workers – specifically young people and women workers.

What’s to be done?

 

1. Proper enforcement of existing legislation. Governments need to step up and enforce current legislation – such as the EU Mobility Package – and ensure that social dialogue and CBAs (collective bargaining agreements), both at EU and national level, are brought about and respected.

 

2. Binding Collective Agreements! Companies must sit down with unions and reach binding agreements on improving working conditions, offering adequate pay, safety and training.

 

3. Multinational companies must clean up their supply chain, ensure decent salaries and eliminate social dumping. Transport has been too cheap, for too long! For decades, freight prices have not reflected the true cost of labour based on decent work, and has not given workers their share! The constant race to the bottom and absence of effective monitoring or enforcement positions labour as the primary means of cost-cutting. Workers have paid the real price, in the form of lower pay, unsafe work, and bad conditions as a result of decades of exploitation.

 

4. Increase job security in rail! Rail competes with other modes of transport that keep costs artificially low through social dumping and other practices. The EU must step away from their dogmatic adherence to liberalisation and allow for integrated public companies again. Increased competition is bringing about more temporary contracts and lower wages in rail.

 

5. Limit seasonality, agency-work and precariousness in air cargo! Stable and beneficial employment must be the priority The air cargo industry needs reform, with a halt put to the race to the bottom, and developing an understanding that protecting aviation and its infrastructure requires protecting its workers.

 

6. We need a level playing field where all social and environmental costs are internalised for all modes of transport!