Wincanton's route to success
Arvind Hickman, December 17, 2014
A driver shortage could threaten the logistics sector. HR magazine met Wincanton HRD Julie Welch to find out how she's tackling it.
They’re the unsung heroes of consumerism, the wheels that keep the economy moving, working around the clock under tight schedules to ensure products and services are delivered on time. If you purchase a new smartphone, toys or groceries this Christmas, it’s more than likely your item has been handled, stored and hauled by one of the thousands of logistics and transportation workers in Britain.
Logistics play a vital role in the economy, but the sector is under threat. There is a huge shortage of Heavy Goods Vehicle (HGV) drivers in the UK, and much of the world. In fact, it is one of the hardest hit sectors suffering a skills shortage.
One company that is trying to address this problem is Wincanton – one of three logistics operations in the UK with an annual turnover of more than £1 billion.
Group HR director Julie Welch tells HR magazine the driver shortage has become particularly acute in the past two years.
“There’s been a lot written about skills shortages and many different companies running apprentice programmes, and HGV drivers is one of those areas – a bit like engineering – where there is a real shortage at the moment,” Welch says, at Wincanton’s HQ in Chippenham. “New people aren’t going into that industry, so a challenge for us is to get more people to enter.”
In fact, the number of HGV drivers has decreased by one-sixth in the past five years, from 306,000 in 2008 to 255,000 in 2013, according to a report by PwC. And Skills for Logistics chief executive Ross Moloney estimates the UK needs an extra 150,000 drivers by 2020.
There are several factors driving this skills shortage. The first is demographic. The average age of drivers is 53 and 13% are over 60. Only 2% are under 25, which means a large proportion of drivers are nearing retirement age and only a narrow pipeline is replenishing stocks.
This insufficient driver pipeline is partly down to an image problem, or what Welch describes as “a long-standing stereotype”. “It’s a lack of understanding about how varied we really are. With the HGV driving you are out on the roads, but we do have part-time roles and we try to encourage people to think about part-time as well,” she says.
Another factor for the shortage is the demand for movement of goods. Although the recession may have slowed consumer behaviour, it is now returning to pre-recessionary heights, coupled with a growing amount of international trade.
The PwC report suggest 2013 was the first year since 2010 in which the demand for movement of goods increased, and it will continue to rise this year and beyond.
Since 2010, trade net volumes have consistently grown, according to Office for National Statistics figures. Between January and July in 2014, imports were up 8.4% but exports down 1.3% on 2013 comparatively. Retail sales volumes also continued to grow in the year to October, particularly in groceries, furniture and fashion, says the CBI.
For the logistics industry, this means greater demand with fewer drivers and fewer trucks (there were 379,000 licensed HGVs in 2013 compared to 416,000 in 2012).
Exacerbating the problem is a new EU directive introduced on 10 September that requires drivers to have a mandatory certificate of professional competence. The aim is to ensure drivers are working safely in a regulated way, but its impact is likely to deter potential talent from entering the profession and make it more difficult for drivers who wish to remain.
“We’ve had to put more focus and resource into driver training and our recruitment pipeline,” Welch points out. “We’ve always got a certain number of vacancies and we haven’t yet seen that rise, but we know if we don’t keep attracting more people in then over time [the CPC] may be a deterrent for people as it’s more onerous.”
Understandably, driver recruitment and retention are focus areas for Welch’s HR team; she has a specific part of her team devoted solely to operational training.
Wincanton also has an extensive regional network of driver trainers and an annual driver of the year competition (think big trucks battling it out on a driving test site).
The company takes on 200 apprentices each year to driver programmes and encourages people from its warehousing side to become drivers through a programme called Warehouse to Wheels.
“We’re starting at the grassroots, going into schools and encouraging people to think about the different careers you can have in logistics. Apprenticeships are a key part of that,” Welch adds. “We also try to connect with people through other resourcing programmes in local job centre areas, trying to get the message to different demographics such as where women come across jobs.”
“Ex-Ministry of Defence drivers are a huge opportunity,” she adds. “Defence cuts are providing opportunities for other organisations to convert ex-Army people. That’s been going for a couple of years now.” Since April, Wincanton has appointed 20 ex-MoD drivers.
Wincanton’s warehousing business could hold the key to plugging the driver shortfall.
Out of the company’s 15,500 employees, 3,600 are employed as drivers and most of the rest work at Wincanton’s more than 200 warehousing sites – the company manages 13 million square feet of warehousing.
The business began life as a milk delivery company in West Surrey in 1925. Today it provides a holistic approach to contract logistics, taking products from production sites to regional distribution centres and then on to customer outlets. Services include warehousing, co-packing, change management, transport, home delivery, supply chain consulting and technology implementation.
The firm’s largest sectors are retail (grocery, general merchandise, home), FMCG, construction and tankers/bulk, and clients include Sainsbury’s Tesco, GlaxoSmithKline, Heinz and Rolls Royce.
With such a broad range of clients, and operating in a competitive sector (there were 80,894 transport businesses in 2012), Wincanton has to be forward-looking and relies heavily on providing good customer service.
Part of this involves forecasting macroeconomic trends up to five years ahead, such as the consumer push towards online sales and returns (weekly online retail sales have grown 2.5 times to £637 million since 2008).
At the moment, Welch says the biggest growth area is click-and-collect because it gives people the opportunity to decide when and where they want to pick up a purchase.
“Customers are trialling things like being able to collect products at railway stations, some of our retail clients are already doing it,” Welch says. “Many companies are going through big changes in supply chain management. We need people to figure out when the next innovation is coming out.”
Wincanton’s ability to anticipate these changes and provide partner services are vital for it to retain a competitive advantage.
“I think there will be more collaboration between organisations in the future,” says Welch, discussing emerging trends. “More organisations want to reduce their cost and efficiencies. Going back 10-15 years, sharing fleet or assets would be unheard of, but not today. You may well get an organisation that has a peak at the end of a week and another organisation that finds a lot of its orders need to go out on a Monday or Tuesday.”
In order to provide good customer service, Welch closely monitors employee engagement and line manager training. “We spend a lot of time making sure our line managers are better at spotting talent and being coaches, and we have a collaborative working approach to bringing more women into the industry,” she says.
Undoubtedly the biggest challenge facing the company is attracting more talent and diversity into an 81% male-dominated industry. Two of the more common sticking points are the amount of heavy lifting involved and long, inflexible hours. “We encourage flexible working and some of the shifts are very family-friendly. We have cases in some warehouses where members of the same family are doing different shifts, which provides great flexibility for childcare and drop off,” Welch says.
In terms of heavy lifting, she points out workers use mechanical handling equipment. The image of logistics as simply driving and lifting is also misplaced; technology is increasingly important and there are many roles that cater to this. There’s also planning, such as how to load lorries and plan the most efficient routes, among other roles.
Welch regards being an ambassador and encouraging more women to enter the industry as vital to her role. She regularly promotes logistics at industry events and Wincanton is a supporter (and past winner) of the FTA everywoman in Transport & Logistics Awards.
If ever there was an industry that needed a gender rebalance, it is logistics. And getting more women and young people involved will be vital for the sector to ensure the UK’s economy (and our Christmas) runs smoothly.