SHORTAGE OF QUALIFIED PERSONNEL IN ROAD FREIGHT TRANSPORT

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3 DIRECTORATE GENERAL FOR INTERNAL POLICIES POLICY DEPARTMENT B: STRUCTURAL AND COHESION POLICIES TRANSPORT AND TOURISM SHORTAGE OF QUALIFIED PERSONNEL IN ROAD FREIGHT TRANSPORT STUDY

4 This document was requested by the European Parliament's Committee on Transport and Tourism. AUTHORS Manuela Samek Lodovici Enrico Pastori Caterina Corrias Alessio Sitran Cristina Tajani Nicoletta Torchio Andrea Appetecchia RESPONSIBLE ADMINISTRATOR Mr. Piero Soave Policy Department Structural and Cohesion Policies European Parliament B-1047 Brussels LINGUISTIC VERSIONS Original: EN Translations: DE, FR, NL ABOUT THE EDITOR To contact the Policy Department or to subscribe to its monthly newsletter please write to: Manuscript completed in May Brussels, European Parliament, This document is available on the Internet at: DISCLAIMER The opinions expressed in this document are the sole responsibility of the author and do not necessarily represent the official position of the European Parliament. Reproduction and translation for non-commercial purposes are authorised, provided the source is acknowledged and the publisher is given prior notice and sent a copy.

5 DIRECTORATE GENERAL FOR INTERNAL POLICIES POLICY DEPARTMENT B: STRUCTURAL AND COHESION POLICIES TRANSPORT AND TOURISM SHORTAGE OF QUALIFIED PERSONNEL IN ROAD FREIGHT TRANSPORT STUDY Abstract The study provides a concise overview of the road freight transport sector, in the light of the structural issue of qualified driver shortage. In particular, this study analyses the multiplicity of factors affecting labour supply and demand, by taking into due consideration also the impacts of the current EU legislation and the effects of the present economic downturn. IP/B/TRAN/IC/ PE EN

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7 Shortage of qualified personnel in road freight transport CONTENTS LIST OF EU MEMBER STATES 9 GLOSSARY 11 EXECUTIVE SUMMARY INTRODUCTION ROAD FREIGHT TRANSPORT: AN OVERVIEW Sector characteristics and economic trends Relevance of the sector Economic trends and changes Sector characteristics Employment situation and trends Employment share Employment trends Employment characteristics The impact of European enlargement on the sector Enlargement and sector economic activity Enlargement and employment The impact of the economic crisis Current EU legislation on the transport sector DRIVER SHORTAGE: QUANTIFICATION OF THE PROBLEM AND ITS MAIN DETERMINANTS Is there a driver shortage in Europe? A quantitative assessment Main determinants of the shortage of qualified drivers Socio-economic factors Demographic factors Working conditions and job attractiveness Qualifications: changing skill needs and competences required DRIVER SHORTAGE: DEMAND AND SUPPLY PROSPECTS Labour demand: growth and perspectives Two model projections of transport activities Prospects for transport growth and employment Labour supply: determinants and prospects Demographic trends 94 3

8 Policy Department B: Structural and Cohesion Policies Working conditions and income levels 98 Qualified labour: skills and training DRIVERS SHORTAGE: MEASURES AT A EUROPEAN LEVEL Current EU legislation and its impacts on the driver shortage Measures to tackle the problem CONCLUSIONS AND RECOMMENDATIONS 113 BIBLIOGRAPHY 117 ANNEXES 123 Annex A Current EU legislation on road transport 123 A.1 Directive 2002/15/EC (Organisation of working time in respect of road transport activities) 123 A.2 Regulation (EC) 561/2006 (Driving time and rest periods) 125 A.3 Directive 96/26/EC (Admission to the occupation) 127 A.4 Regulation (EC) 484/2002 (Driver attestation) 129 A.5 Directive 2003/59/EC (Certificate of Professional Competence) 130 A.6 Regulation (EC) 2135/98 (Digital tachograph) 132 A.7 Directive 2003/88/EC (General Working Time Directive) 133 A.8 Directive 2006/22/EC (Enforcement Provisions for Driving Times and Rest Periods) 134 A.9 Directive 2006/38/EC (Eurovignette) 135 A.10 Road Package 137 Annex B Social actors at European and national level 139 B.1. The role of social partners 139 Annex C Additional tables 143 Annex D Country fiches 169 D.1 Belgium 169 D.2 Czech Republic 170 D.3 Germany 171 D.4 France 173 D.5 Italy 175 D.6 The Netherlands 176 D.7 Poland 177 4

9 Shortage of qualified personnel in road freight transport D.8 Romania 179 D.9 Sweden 181 D.10 United Kingdom 182 Annex E Questions on professional driver shortage 185 ANNEX F Requirements for access to the occupation of goods haulage operator on behalf of third parties in some major European countries 187 5

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11 Shortage of qualified personnel in road freight transport LIST OF ABBREVIATIONS CAS Centre d Analyse Stratégique CIS CO2 Commonwealth of Independent States; regional organisation whose participating countries are former Soviet Republics. Carbon dioxide is a chemical compound composed of two oxygen atoms covalently bonded to a single carbon atom. It is a greenhouse gas and a major contributor to climate change. CPC Certificate of Professional Competence CSST Centro Studi Sistemi di Trasporto DG Directorate-General ECMT European Conference of Ministers of Transport ECG European Association of Vehicle Logistics (Eurcartrans) EEA European Environment Agency ELFS European Labour Force Survey ETF European Transport Workers Federation Eurofound European Foundation for the Improvement of Living and Working Conditions Eurostat Statistical Office of the European Communities FNTR Fédération Nationale des Transports Routiers GDP Gross Domestic Product HGVs Heavy Goods Vehicles ICCT International Council on Clean Transportation ICT Information and Communication Technology ILO International Labour Organisation IEA International Energy Agency IPCC Intergovernmental Panel on Climate Change IRF International Road Federation 7

12 Policy Department B: Structural and Cohesion Policies IRU International Road Transport Union ITF International Transport Workers Federation JRC-IPSC Joint Research Centre - Institute for the Protection and Security of the Citizens Km Kilometre LGVs Light Goods Vehicles MTOE Million Tonnes of Oil Equivalent NACE Statistical Classification of Economic Activities in the European Community NMS New Member States OECD Organisation for Economic Cooperation and Development OPTL Observatoire prospectif transport et logistique POAs Periods of availability PES Public Employment Service PRES Private Employment Service SBS Structural business statistics SESP Service économie, statistiques et prospectives SME Small or medium enterprise TEN-T Trans-European Transport Networks TIR Transport International de Marchandises par la Route Tkm Tonnes-kilometre UNECE United Nations Economic Commission for Europe Vkm Vehicles-kilometre WHO World Health Organization 8

13 Shortage of qualified personnel in road freight transport LIST OF EU MEMBER STATES EU-27 European Union of 27 Member States EU-25 European Union of 25 Member States EU-15 European Union of 15 Member States AT Austria BE Belgium BG Bulgaria CY Cyprus CZ Czech Republic DE Germany DK Denmark EE Estonia GR Greece ES Spain FI Finland FR France HU Hungary IE Ireland IT Italy LT Lithuania LU Luxembourg LV Latvia MT Malta NL The Netherlands PL Poland PT Portugal RO Romania SE Sweden SI Slovenia SK Slovakia UK United Kingdom 9

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15 Shortage of qualified personnel in road freight transport GLOSSARY Apparent labour productivity Average personnel costs Simple indicator of productivity calculated as value added divided by persons employed. Personnel costs are the total remuneration, in cash or in kind, payable by an employer to an employee for work carried out. This is divided by the number of employees (paid workers), which includes part-time workers, seasonal workers etc, but excludes persons on long-term leave. Cabotage transport Road transport performed in one country by a motor vehicle registered in another country. It is considered as international transport because it constitutes an export of services from one country to another. Cross-trade transport Cross-trade transport is defined as international road transport performed by a road motor vehicle registered in a third country (movement of goods by road from country A to country B by hauliers registered in country C). Figures do not express where this type of operation has taken place but by whom it was performed. International transport Transport between two places located in two different countries. Reporting relates only to resident carriers of the reporting countries: the figures sum up the goods dispatched from resident carriers to all countries of the world and the goods brought into the reporting country by resident carriers from all countries of the world. It may involve transit through one or more additional countries. Investment rate Indicator of investment where gross investment in tangible goods is related to value added at factor costs. Goods vehicles Include lorries, road tractors, commercial vans and pick-ups. Gross operating surplus Gross operating rate (%) Gross investment in tangible goods Measure of the operating revenue left to compensate the capital factor input, after the labour factor input has been recompensed. The surplus is used by the unit to recompense the providers of own funds and debt, to pay taxes and eventually to finance all or a part of its investment. Indicator of profitability where the gross operating surplus is related to the turnover generated. All new and existing tangible capital goods, whether bought from third parties or produced for own use, having a useful life of more than one year. 11

16 Policy Department B: Structural and Cohesion Policies National transport Transport between two places located in the same country irrespective of the country in which the vehicle is registered. It may involve transit through one or more additional countries. Number of enterprises The number of enterprises active during at least part of the reference period. Number of persons employed Purchases of goods and services The total number of persons who work in the observation sector, as well as persons who work outside the unit but who belong to and are paid by it. It includes employees, parttime workers, working proprietors, unpaid family workers, seasonal workers etc. All goods and services purchased for resale or consumption in the production process, excluding capital goods the consumption of which is registered as consumption of fixed capital. Stock of vehicles Number of road vehicles registered at a given date in a country and licensed to use roads open to public traffic. Tonne-kilometre Unit of measure representing the transport of one tonne of goods over one kilometre. Total transport Cumulated performance of national, international, crosstrade and cabotage transport. Hire or reward The carriage for remuneration, of persons or goods, on behalf of third parties. Transport on own account Transport which is not for hire or reward. Turnover The totals invoiced by the observation unit during the reference period, corresponding to market sales of transport services supplied to third parties. Unpaid persons employed Working proprietors and unpaid family workers. Value added at factor cost Wage adjusted labour productivity (%) The gross income from operating activities after adjusting for operating subsidies and indirect taxes (including value added tax). Indicates the degree to which average personnel costs are compensated by value added per person employed. It is measured as the ratio between value added and personnel costs. 12

17 Shortage of qualified personnel in road freight transport LIST OF BOXES BOX 2.1 EU legislative proposals for updating the current regulatory framework 59 BOX 2.2 Transport and sustainability 60 BOX 3.1 Downward economic trend and driver shortage 62 BOX 3.2 Results from a driver workshop on working conditions 73 BOX 3.3 Unsocial and long working hours in the Netherlands 74 BOX 3.4 Selected national cases 76 BOX 3.5 Female employment in the transport sector: trends and job barriers 79 BOX 3.6 Military service and skills 84 BOX 3.7 Skills shortage and training in Denmark 85 BOX 4.1 The impact of the financial crisis: comments from the IRU 56 BOX 5.1 Predicted impact of 48-hour limit on wages and labour supply in the EU (Directive 2002/15/EC) 103 BOX B.1 IRU and ETF joint recommendations 140 BOX B.2 The Tutankamion programme: training for immigrant workers in Italy 142 BOX B.3 The case of Italy: collective agreements depart from the working time directive

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19 Shortage of qualified personnel in road freight transport LIST OF FIGURES FIGURE 2. 1 Total road goods transport (million tkm) 31 FIGURE 2. 2 National road goods transport (million tkm) 31 FIGURE 2. 3 International road goods transport (million tkm) 32 FIGURE 2. 4 Turnover (million euro) 33 FIGURE 2. 5 Number of enterprises 33 FIGURE 2. 6 Personnel costs per employee (thousand euro, 2006) 35 FIGURE 2. 7 Percentage of investment rate (investment/value added at factors cost) 36 FIGURE 2. 8 Goods road motor vehicles percentage variation: and FIGURE 2. 9 Goods road motor vehicles, 2007 (thousands) 37 FIGURE Share of age categories in road goods vehicles, 2006 (%) 38 FIGURE Share of road freight transport in total employment by country in 2000 and 2006 (%) 38 FIGURE Employment share by mode of transport in the EU-27, year FIGURE Employment growth in road freight transport versus total employment growth 1 (%) 42 FIGURE Share of EU-27 employment by country for road freight transport in 2000 and 2006 (%) 43 FIGURE Employment composition by firm size in road freight transport in some EU countries, FIGURE Percentage of unpaid persons in total employed persons in road freight transport, 2006 (%) 45 FIGURE Proportion of women employed in the transport sector by country, 2005 (%) 46 FIGURE Wage convergence in the EU-27: percentage annual variation in average wage over the period 2002 and 2006 and average wage in 2002 (thousand euro) 53 FIGURE 3. 1 Driver shortage ratio per country 63 FIGURE 3. 2 The relationship between GDP and demand for transport ( ) 67 FIGURE 3. 3 Development of the age profile of truck drivers in Germany 70 FIGURE 3. 4 Reasons for driver shortages 71 FIGURE 3. 5 Proportion of female employment by transport sub-sector in EU-27, years 2001 and FIGURE 4. 1 Freight transport activity forecast: (based on tkm) 89 FIGURE 4. 2 Relation between employment growth rate and transport (hire or reward) growth rate ( ) 91 FIGURE 4. 3 EU-27 population trend and projections for males years old (in millions) 95 15

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21 Shortage of qualified personnel in road freight transport LIST OF TABLES TABLE 1. 1 Objectives, instruments and principal sources of information used in the study 26 TABLE 2. 1 Share of transport modes in the EU-27 total inland freight transport (percentage based on tkm) 30 TABLE 2. 2 Level of operating costs (Euro per hour) 34 TABLE 2. 3 Percentage of operating costs per hour 35 TABLE 2. 4 Actual and announced job reduction and creation in the transport and communication sector in the EU 40 TABLE 2. 5 Employment in road freight transport in 2000 and 2006 by country and employment change in road freight transport and in total economy 41 TABLE 2. 6 Variation in the employment shares of road freight transport in the EU-27 (absolute variation in parenthesis) 43 TABLE 2. 7 Variation of the international transport flows, (percentage, based on tkm) 48 TABLE 2. 8 Variation in cross-trade transport flows, (percentage, based on tkm) 49 TABLE 2. 9 Cabotage penetration rate by the country in which cabotage occurs, based on tkm (in decreasing range, 2007) 50 TABLE Percentage of turnover growth rate ( ) 51 TABLE Number of persons employed in the road freight sector and annual percentage variation between and between TABLE Main recent acts of European social legislation regarding the road freight transport sector 57 TABLE 3. 1 Estimated driver shortage and quantity of transport lost in TABLE 3. 2 Tension indicators in France 65 TABLE 3. 3 Position of drivers among the top ten shortage occupations in some EU countries 65 TABLE 3. 4 Overview of main logistic changes leading to an increase in transport demand 68 TABLE 3. 5 Retiring drivers in France 70 TABLE 3. 6 Perception of the driver s occupation in France 71 TABLE 3. 7 Working hours and work-life balance in the transport, storage and communication sector compared to other sectors (values in percentage) 74 TABLE 3. 8 Average wage per employee in EU countries in 2006 and percentage annual variation between 2002 and TABLE 3. 9 Summary of required skills and qualifications 86 TABLE 4. 1 Evolution of modal split in freight transport TABLE 4. 2 Baseline scenario for driver demand 92 TABLE 4. 3 Different scenarios for driver demand 93 17

22 Policy Department B: Structural and Cohesion Policies TABLE 4. 4 Estimates of driver shortage in TABLE 4. 5 Male employment distribution by age classes in the transport sector: hypotheses and projections 97 TABLE 5. 1 Implementation and enforcement of EU rules: financial and administrative impacts 105 TABLE 5. 2 Employed and self-employed drivers (projection 2009, EU- 27) 106 TABLE 5. 3 Overview of EU legislation and its impacts on driver shortage 109 TABLE 5. 4 Increasing the supply of drivers 111 TABLE 5. 5 Increasing the supply of qualified drivers 112 TABLE A1. 1 Overview of Directive 2002/15/EC 124 TABLE A2. 1 Overview of Regulation (EC) 561/ TABLE A3. 1 Overview of Directive 96/25/EC 128 TABLE A4. 1 Overview of Regulation (EC) 484/ TABLE A6. 1 Overview of Regulation (EC) 2135/ TABLE A7. 1 Overview of Directive 2003/88/EC 133 TABLE A8. 1 Overview of Directive 2006/22/EC 134 TABLE C1. 1 Road freight transport (2007) 143 TABLE C1. 2 Road goods transport by type of operation: National transport - millions tkm 144 TABLE C1. 3 Road goods transport by type of operation: international transport (millions tkm) 145 TABLE C1. 4 Road goods transport by type of operation: cross-trade (millions tkm) 146 TABLE C1. 5 Road goods transport by type of operation: cabotage (millions tkm) 147 TABLE C1. 6 Cabotage penetration rate by country in which cabotage takes place (percentage based on tkm) 148 TABLE C1. 7 Road freight transport: millions of vehicle-km per year 149 TABLE C1. 8 Number of road goods vehicles (thousands) 150 TABLE C1. 9 New vehicle registration 151 TABLE C1. 10 Number of persons employed in freight transport by road ( ) 152 TABLE C1. 11 Share of women employed in transport services (NACE 60-63), compared with the services average (NACE G, H, I and K), 2005 (in percentage) 153 TABLE C1. 12 Share of part-time persons employed in transport services (NACE 60-63), compared with the services average (NACE G, H, I and K), 2005 (in percentage) 154 TABLE C1. 13 Evolution of GDP, population and added value ( ) 155 TABLE C1. 14 Final energy demand by the transport sector 155 TABLE C1. 15 Evolution of the transport sector TABLE C1. 16 NACE: I Freight transport by road, data by country (2006) 157 TABLE C1. 17 NACE: I Freight transport by road, data by country (2006)

23 Shortage of qualified personnel in road freight transport TABLE C1. 18 NACE: I Freight transport by road, data by country (2006) 159 TABLE C1. 19 NACE: I Freight transport by road, data by country (2006) 160 TABLE C1. 20 Road freight transport, by distance class (thousands of tonnes, 2007) 161 TABLE C1. 21 Total road goods transport (million tkm) 162 TABLE C1. 22 Total road goods transport (million tkm) (continued) 163 TABLE C1. 23 Operating costs comparison: Italy, Germany, France, Spain, Poland 164 TABLE C1. 24 Operating costs comparison: Austria, Hungary, Slovenia, Romania 165 TABLE C1. 25 Employment incidence of road freight transport on total employment of transport sector and number of person employed, year (thousand) 166 TABLE C1. 26 Employment in road freight transport by employment position, year TABLE C1. 27 Employment in road freight transport by firm size (% composition) and average firm size, year

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25 Shortage of qualified personnel in road freight transport EXECUTIVE SUMMARY Road freight transport has been experiencing a progressive shortage of professional drivers, which has emerged as one of the most critical issues seriously affecting the competitiveness of the sector over the last ten years. The shortage has progressively become structural across Europe, although its impacts have not occurred simultaneously and with the same severity and magnitude in all EU Member States. A number of studies have sought to quantify the driver shortage problem, thus further attesting to the fact that in recent years the European heavy truck transport industry has been suffering from a serious structural shortage of skilled professional drivers. According to Eurobarometer, over 70,000 professional drivers were needed in 2008 in Europe (see Chapter 3.1 in this respect). Estimates have been made in this study (see Table below), turning out almost in line with the estimates produced by other studies like IRU (2007), TYA (2008). Table Estimated driver shortage in 2008 Country Estimated number of drivers Assumed shortage ratio Estimated driver shortage EU-27 1,960, ,480 Belgium 44, ,590 Czech Republic 72, ,618 France 244, ,885 Germany 216, ,149 Italy 237, ,266 Poland 157, ,868 Portugal 45, ,087 Romania 53, ,712 Spain 275, ,382 The Netherlands 86, ,131 United Kingdom 208, ,456 Source: TRT elaboration based on Eurobarometer and Eurostat data At present the driver shortage problem is mitigated, due to the current economic downturn and reduction in transport flows with a resulting overcapacity in the sector, leading to a scenario where the problem of driver shortage no longer ranks among the top priorities. Nevertheless, and since the imbalance in supply and demand of drivers may be expected to increase again as soon as the economy starts recovering, it is of the utmost importance to understand its main causes and the rapid transformations of the market, including the new requirements raised by EU legislation in force since

26 Policy Department B: Structural and Cohesion Policies In order to understand the main causes of driver shortage it is necessary to take into account the main characteristics of the road freight transport sector: Over the last decade road freight transport in the EU-27 has seen considerable activity growth, and an increase in competitive pressure has been at work, also following the enlargement of the EU. This has kept profit margins decreasing, despite remarkable increases in the industry s turnover and productivity. Considerable differences are to be seen among EU Member States in both operating costs and investment rates, with new Member States exhibiting lower average personnel costs than the old Member States, but higher investment rates. The road freight transport sector positions itself as the dominant freight mode covering 76% of the total market; it is characterised by a considerable geographic concentration of the activity (more than the half of total goods transport in tkm is accounted for by Germany, Spain, France and Italy) and a high degree of market fragmentation (from 65% to over 95% of companies have less than ten employees), where a few big players tend to dominate the market and subcontract various activities to medium-size and small companies. Turning to the employment situation and trends, the road freight transport sector is a major employer in the EU (around 2.8 million persons in 2006). Employment in this sector has been increasing at a faster rate than total employment, but is markedly differentiated across EU Member States, being particularly significant in the New Member States and in those countries where the initial employment was lower. Employment in the road freight transport sector is characterised by: a large share of self-employment (19.6% on average in the EU-27); a limited variety of occupations: drivers account for a very high share of employment (reaching almost 70% of total employment in some EU countries); a limited presence of women and great gender imbalance (women account for fewer than 14% on average in the total land transport sector); a low educational level, particularly among drivers; and a large share of near-to-retirement workers. Within this framework, the accession of the twelve new Member States has extensively contributed to the changes in the overall sector in Europe as well. The completion of the internal market, the stronger economic growth of the new Member States and the increase in the specialisation of the production processes, inducing larger flows of goods, have led to an increased demand for freight transport in general. It has also led to greater differences in labour costs across the Member States, with the risk of downward pressure on wages, and to stronger competition. The specific characteristics of the road freight transport sector and the several changes that have been recently affecting the sector in part anticipate and explain the problem of driver shortage which has been experienced in many EU countries during the past years. The causes of the driver shortage lie, in fact, in a multiplicity of factors affecting labour supply and demand, such as: socio-economic factors, since global economic growth coupled with EU enlargement are bringing about an increase in the demand for road transport and hence drivers; 22

27 Shortage of qualified personnel in road freight transport demographic factors, since an ageing driver population and a shrinking working age population are reducing labour supply; work attractiveness, since the profession of driver is principally suffering from a steady decline in attractiveness, due to both the physical environment and the social conditions in which drivers work, and a poor public image; this has a direct impact on new entries and on the retention of current workers; qualifications and skills requirements, since technological innovation, globalisation, increased complexity of regulations and additional tasks have implied a substantial transformation of jobs in the transport sector, entailing new and more complex skills and training needs, and thus producing a shortage of qualified personnel. Driving is today a highly demanding profession, since it has developed from the simple driving activity to a more specific set of working tasks resulting from the striking changes which have occurred, driven, in the first place, by new logistics services and needs. These changes have entailed new schemes in the organisation of work, now far more codified and standardised than they used to be. The sector no longer allows for the social advancement of a poorly skilled workforce. The sector has historically developed by recruiting poorly educated people, but increasingly demanding skills are requiring more and more task specialisation and segmentation. Thus, the observed shortage of drivers is not only a matter of scarcity of labour supply, but, above all, of scarcity of a qualified, skilled and reliable workforce. Hence, the shortage problem assumes the form of labour mismatch, where the competences and skills required by firms do not tally (in general being higher) with those offered by the workers. In addition to these factors affecting labour shortage, it must be noted that the last decade has seen the coming into force of various measures in EU legislation which have given a new shape to road transport, so as to further improve its efficiency, safety, security and environmental protection level. This has led to (i) the identification of common rules on access to the market and to the profession, (ii) the establishment of minimum standards for working time, driving and rest periods (including enforcement and the use of the tachograph), and (iii) the establishment of a uniform Community form of evidence of driver competence. These measures exert an indirect influence on labour demand and supply of drivers by modifying working time, working conditions, skills requirements, etc. However, the importance of the impact of EU legislation on the driver shortage issue is, in many cases, not easily and clearly quantifiable. In general, the impact of EU legislation on driver shortage has been evaluated as neutral, except for the Working Time Directive and the Regulation on driving times and rest periods, which seem to have an impact on job attractiveness, flexibility, and pay with possible negative repercussions on driver supply. Again, the very considerable effects of the EU rules impacting on the social aspects of the profession are worth mentioning, in view not only of the direct costs imposed on the sector, but also of the indirect costs involved in complying with the legal requirements. 23

28 Policy Department B: Structural and Cohesion Policies False self-employed drivers and the lack of harmonised enforcement schemes in the EU Member States are also issues of major concern 1. In particular, almost all the stakeholders highlighted problems related to the practice of implementing the working time rules and indicated that the existing enforcement system of controls and checks on drivers is weak. This further leads to distortions in competition, putting those who abide by the rules in a disadvantaged position. As regards specific measures to tackle the problem of shortage of qualified personnel in the road freight transport sector, so far specific and direct measures have not been taken at the EU level, although the European Commission recognises this has become a major problem. Given the characteristics of the sector, the nature of the shortage and the existing legislative framework, some measures can be proposed to address the problem of shortage of qualified drivers and personnel in the road freight transport sector. As a general rule, the proposed measures should be built on a holistic, coordinated and targeted approach directed at both the demand and supply side, with coherent and coordinated effort at all institutional levels - European, national, local - involving different actors and stakeholders (social partners, transport and education policymakers). Within this general framework, measures to mitigate and solve the shortage problem should be aimed at both increasing the potential pool of qualified personnel and drivers (supply side) and at reducing the demand for labour (demand side). Specifically measures should be targeted at the following main issues. The image of the sector should be improved by promoting campaigns on the key role played by the transport sector in the economy, as well as providing information on employment prospects to schools, employment services and the media. The attractiveness of the profession and working conditions should be improved by increasing the number of, and enhancing the comfort and security of, truck parking areas, harmonising regulations and penalties across EU countries, and increasing the integration between employers and employees needs and objectives. Women s participation should be increased by promoting gender-oriented measures and by increasing road safety and rest facilities and reducing gender discrimination. Skills and qualifications in the sector should be improved by facilitating the attainment of professional and specific driving competences, by strengthening the link between the educational system and the labour market (e.g. creating ad hoc professional and lifelong training programmes; increasing the awareness among young students of occupational and professional career prospects; improving job matching exploiting the renewed role of public/private employment services; introducing and/or stimulating the use of apprenticeship contracts). The logistics and organisation of road transport firms should be improved by increasing labour efficiency, improving logistic and organisation management, and increasing the use of alternative transport modes. 1 See pages

29 Shortage of qualified personnel in road freight transport 1. INTRODUCTION The transport sector has seen an increasing demand for transport and logistics services not adequately supported by a parallel growth in the transport-related labour market. Companies are expressing a need for qualified drivers, while the potential workforce is increasingly looking for jobs in other sectors and the present generation of drivers is gradually retiring. As a result, in the recent past there has been observed a significant (both quantitative and qualitative) shortage of professional drivers in the road freight transport sector. This critical issue is also acknowledged by the European Commission, as affirmed in its Communication Freight Transport Logistics Action Plan (COM (2007) 607 final) 2. The situation is common across all European countries although the extent of the shortage may vary from one to another. Although the ongoing economic crisis has mitigated or even eliminated the problem of the structural shortfall of qualified personnel, and particularly of long-distance drivers, it will probably re-emerge in the future with the general recovery of the economy. In fact, the shortage of qualified personnel is closely linked to the rapid and drastic transformations (logistic organisation schemes, quality constraints, ICT developments, new requirements set by EU legislative acts) which have affected the sector and, consequently, changed the nature of work and competencies required of drivers. It is, then, evident that the observed shortage of drivers is not only a matter of inadequacy of labour supply, but, above all, of scarcity of qualified, skilled and reliable workers. Hence, the shortage problem assumes the form of labour mismatch, where competences and skills required by firms do not tally (in general being higher) with those offered by workers. The overall purpose of this study is to present and analyse the current situation the problems and challenges related to the labour shortage of qualified drivers in the road freight transport industry in the EU-27 in order to provide the European Parliament and decision-makers with clear findings and recommendations on measures to be taken to deal with the shortage problem. The study is structured into six chapters. Following this introductory chapter, Chapter Two presents an overview of the road freight transport sector, in terms of trends in, and characteristics of the industry and employment in it. In the framework of the current economic downturn, which is heavily conditioning the markets, particular attention is placed on the impact of EU enlargement on the sector. Moreover, this chapter illustrates the main EU regulations affecting the sector. Chapter Three deals with the labour shortage observed in the sector and analyses in detail the main problems and determinants of the shortage of drivers: economic and social changes, working conditions, EU regulations, changing skill needs. Chapter Four discusses the future prospects in terms of possible trends in labour demand and labour supply of lorry drivers for the next decade. It considers the expected future growth of sector activity and the main factors affecting the future supply of drivers. Chapter Five assesses how the measures adopted at EU and national level affect the driver shortage and the quality mismatch, with specific attention to EU directives and regulations governing the sector. Chapter Six concludes with some recommendations based on the analysis conducted in the previous sections. Finally, a number of annexes examining in 2 Report by the Commission, Freight Transport Logistics Action Plan COM(2007) 607 final. Available at: 25

30 Policy Department B: Structural and Cohesion Policies more detail specific relevant issues (such as EU directives and regulations, the role and structure of social partners) are provided. The methodological approach adopted is based on both quantitative analysis (e.g. statistical analysis, forecasting analysis) and qualitative analysis of primary and secondary information (direct interviews, reports, databases) in order to provide the most comprehensive and up-to-date information possible. Table 1.1 presents the methodology adopted and the sources of information used in relation to the analysis of the sector and of the problem of shortage of qualified personnel. Table 1. 1 Objectives, instruments and principal sources of information used in the study Objective Instrument Kind of information Principal sources of information Outline recent economic and employment trends in the sector over the past decade (Chapter 2) Quantitative analysis Literature review Qualitative analysis Existing databases Existing information on the sector characteristics at EU and at national level. Eurostat, SBS database Eurostat, EU Transport survey database Second level data from official EU and National reports Quantification of driver shortage, identification and discussion of the principal determinants of the shortage (Chapter 3) Literature review Qualitative analysis Direct interviews Existing information on the sector regarding: drivers of change, working conditions, problems, EU regulations, personnel shortage. Primary information Academic studies; reports, surveys and presentations from official websites of national authorities of Member States, EU Institutions, think tanks, websites of social partners at EU and country level. Direct interviews on driver shortage conducted among private and public stakeholders, at national and European level, including direct interviews with IRU and ETF representatives (see list in Annex B). Identification of possible future trends in labour demand and supply of drivers (Chapter 4) Direct interviews Qualitative analysis Quantitative analysis Forecasting exercises Primary information Existing databases Direct interviews on driver shortage (see above) Eurostat, SBS database Eurostat, EU Transport survey database Second level data from official EU and national reports 26

31 Shortage of qualified personnel in road freight transport Table 1. 1 Objectives, instruments and principal sources of information used in the study (continued) Kind of Principal sources of Objective Instrument information information Identification of measures to tackle the shortage, and the impact of EU legislation (Chapter 5) Direct interviews Qualitative analysis Literature review Qualitative analysis Primary information Existing information on the sector regarding measures to tackle the problem and the impact of EU regulation. Direct interviews on driver shortage (see above). Academic studies; reports, surveys and presentations from official websites of national authorities of Member States, EU Institutions, think tanks, websites of social partners at EU and country level. Conclusions and recommendations on the measures which should be taken. (Chapter 6) Qualitative analysis Direct interviews Qualitative analysis Main findings of previous chapters Primary information Direct interviews on driver shortage (see above). As regards the statistical sources, the figures presented in this publication reflect the state of data availability on 20 April The most recent data usually refer to the year 2007, even if not always available for every subject or Member State. Data from the latest available year are then adopted. The main data sources are the Eurostat dissemination database 3 and the European Commission (DG Energy and Transport). With regard to Eurostat, the data were mainly extracted from the Eurostat datasets of Transport Statistics and from the Eurostat Structural Business Statistics (SBS), complemented by the Labour Force Survey (LFS). Of course, the publication presents only a selection of the most important data available. The transport statistics data cover infrastructure, transport equipment, enterprises, economic performance for traffic and transport of goods, as well as data on accidents. The Structural Business Statistics database is compiled by Eurostat from data collected by national statistics offices from enterprises of all sizes, now covering all the industries and services classified according to NACE Rev. 1, sectors C to K, although excluding sector J (financial services). Within the sectors covered, activities are disaggregated to a NACE 4- digit level within industry, although the data are more complete at a NACE 3-digit level, and to a NACE 3-digit level for what concerns services. The variables contained in the SBS include the number of enterprises, turnover, the value of production, value added, wages

32 Policy Department B: Structural and Cohesion Policies and salaries, gross investment and hours worked as well as the number of persons employed and the number of employees. They also include a number of ratios and calculated variables, such as the share of employment in particular industries in the total for manufacturing, investment per worker, social charges as a share of personnel costs and the growth of employment. Other main sources include Eurobarometer (European Commission), the European Environment Agency (EEA), the Organisation for Economic Cooperation and Development (OECD) and the United Nations Economic Commission for Europe (UNECE). In addition, data from professional and sectoral organisations are used as a complement. However, the data from non-official sources may be based on different standards to those used in the European Statistical System, and it is therefore not possible to combine data from official and non-official sources. It is to be noted that the impact of the 2008/2009 economic downturn on road freight transport activities has yet to be reflected in official statistics. 28

33 Shortage of qualified personnel in road freight transport 2. ROAD FREIGHT TRANSPORT: AN OVERVIEW KEY FINDINGS Road freight transport, by offering the most flexible services, is the dominant freight transport mode in almost all EU Member States (accounting for 77% of total inland freight transport in tkm, on average in the EU-27) and is the largest employer in the transport sector, with about 2.8 million workers employed in 2006 (accounting for more than 31% of transport sector employment, on average in the EU-27). In economic terms, the sector is characterised by a considerable geographic concentration of activity (more than half of the total goods transport in tkm is accounted for by Germany, Spain, France and Italy), a high degree of market fragmentation (the percentage of micro-firms ranges between 65% and 95% in EU countries), and relatively low load factors due to inefficiencies in time and space (the percentage of empty running varying from an average of 13% in Germany to around 22% in the Netherlands). In terms of employment, road freight transport, characterised by a high level of selfemployment (19.6% on average in the EU-27), is a male-dominated sector (women account for less than 14% on average of employment in the total land transport sector) with a low educational level; drivers account for the largest share of employment in the industry (reaching almost 70% of the total workforce in some EU countries) and the age structure tends to be above average, with a large share of near-to-retirement workers. Over the last decade (between 2000 and 2006) road freight transport in the EU-27 has seen a considerable growth in terms both of activity (+25% in tkm of transported goods) and of employment (+16% versus +6% of total employment), thus posing problems of shortage of qualified personnel. However, the present economic recession is severely hitting the sector (the demand for road freight transport services has been slowing down since the end of 2008) mitigating the personnel shortage problems, as already signalled by the sharp reductions in job vacancies and the increase in layoffs and bankruptcies. The completion of the Internal Market and EU enlargement have consistently increased the demand for road transport and long-distance haulage, and have intensified competitive pressure reducing firms profits; enlargement has also increased disparities across the EU in terms of infrastructures, environmental and safety performance and operating costs, especially personnel costs. The purpose of this chapter is to provide an overview of the current situation and recent trends in the road freight transport sector, in terms of: (i) sector characteristics and economic trends, (ii) the employment situation and recent changes in it, and, (iii) the main EU regulations governing the sector. Additionally, a specific section is devoted to an analysis of the economic and employment impact of EU enlargement on the sector. 29

34 Policy Department B: Structural and Cohesion Policies 2.1 Sector characteristics and economic trends Relevance of the sector Road transport is generally acknowledged as the preferred transport mode, compared to rail, inland waterways or short-sea shipping, by offering the most flexible services in terms of departure time and destination. It is, on the one hand, largely unconstrained by Europe s challenging topography or dispersed settlement structure, and, on the other hand, is facilitated by the fact that the road network is the most highly developed. Furthermore, the average transport distance of goods (about 110 km per tonne) meets with greater efficiency in road transport, which consequently represents the fastest transport mode for distances up to about 500 km, despite the congestion problems it generates (European Commission, 2006). Just-in-time and door-to-door deliveries require flexibility and reliability, which other modes of transport may not offer, since they are still characterised by a certain rigidity; in addition, even when other transport modes are used, road transport is often needed for the initial and final stages of the journey at the point of loading or unloading. These reasons may explain why road freight transport is still highly attractive despite its weaknesses, such as a heavy toll in terms of accidents and fatalities, and the pressure it exerts on the environment (EEA, 2007). It constitutes the dominant freight transport mode in all Member States, with the sole exceptions of Estonia and Latvia, where rail transport ranks first with the highest share of the freight transport market (57% and 58% respectively), followed by Lithuania (41%), Sweden (36%) and Austria (35%). Apart from Cyprus and Malta, Ireland (99%), Greece (97%), Spain (96%) and Portugal (95%) are the countries that registered the highest shares of road freight transport in It is also worth mentioning that road freight transport has shown the highest performance measured in tkm, with an increase of 25% since 2000 (Eurostat 2008). As illustrated in Table 2.1, the result has been a rise in the modal share of road freight transport by three percentage points, up to 76.9% in 2007 (while rail and inland waterways account for about 17.6%, and 5.6%, respectively). Table 2. 1 Share of transport modes in the EU-27 total inland freight transport (percentage based on tkm) Mode of transport Rail 19.5% 17.8% 17.6% Road 73.9% 76.6% 76.9% Inland waterways 6.6% 5.6% 5.6% Source: Eurostat Economic trends and changes Figure 2.1 shows the total amount of tkm transported in each country. It may be noted that much of the activity is concentrated in the larger countries, and in particular the old Member States. In fact, among the Member States that joined the EU in 2004 and 2007, only Poland emerges in aggregate terms as reflecting the size of its economy. 30

35 Shortage of qualified personnel in road freight transport Figure 2. 1 Total road goods transport (million tkm) 2000 data are not available for Poland, Romania, Hungary, Greece, Slovakia, Bulgaria, Slovenia, Latvia, Estonia and Cyprus data are not available for Romania and Bulgaria. For Italy, 2007 data have been estimated. Source: Eurostat Appreciable differences emerge amongst Member States when we look at the development of the national, international, cross-trade and cabotage components of road freight transport. In all the major EU economies (Germany, France, Spain and the United Kingdom) national transport is particularly important (see Figure 2.2), more than 70% of the total being accounted for by national transport; the more peripheral Member States of the EU (Ireland, Cyprus, Finland and Sweden) showed a similar ratio. This scenario largely differs from international transport. As illustrated in Figure 2.3, international transport is significant in Poland, Germany, Spain, and the Netherlands, and it represents more than half of the freight transport of the Czech Republic, Estonia, Latvia, Portugal, Romania and Slovenia. Figure 2. 2 National road goods transport (million tkm) 2000 data are not available for Poland, Romania, Hungary, Greece, Slovakia, Bulgaria, Slovenia, Latvia, Lithuania, Estonia and Cyprus data are not available for Romania and Bulgaria. For Italy, 2007 data have been estimated. Source: Eurostat 31

36 Policy Department B: Structural and Cohesion Policies Figure 2. 3 International road goods transport (million tkm) 2000 data are not available for Poland, Romania, Hungary, Greece, Slovakia, Bulgaria, Slovenia, Latvia, Lithuania, Estonia and Cyprus data are not available for Romania and Bulgaria. For Italy, 2007 data have been estimated. Source: Eurostat With regard to specific country performance, it is worth noting that: Poland became the largest contributor to international transport in 2007, with about 85 billion tkm, overtaking Germany and Spain, where international transport accounted for 82 and 67 billion tkm in 2007 respectively; Poland has become the major player in cross-trading as well, by absorbing 17% of the total tonnes lifted, and positioning itself well ahead of Germany, the Czech Republic, Lithuania and Slovakia; Germany retains its lead in the cabotage domain, accounting for about one seventh of the total, followed closely by the Netherlands and Luxembourg Sector characteristics Consistent with the increase in the volumes of goods transported, the road freight transport industry s turnover has shown vigorous growth in recent years. This is the case, for instance, of Italy, which had the largest turnover in 2006, followed by France, the United Kingdom and Spain (see Figure 2.4). 32

37 Shortage of qualified personnel in road freight transport Figure 2. 4 Turnover (million euro) 2007 data are not available for Italy, Belgium, Ireland and Malta. Source: Eurostat Nevertheless, despite the growth in the industry s turnover and volumes of goods transported, the structure of the sector in terms of number of road freight enterprises changed little over the same period in the whole of the EU. In fact, as is shown in Figure 2.5, the sector continues to be highly fragmented, although some consolidations are occurring (in most of the countries the number of enterprises has slightly decreased). Spain shows the greatest number of enterprises, even reinforcing its quota, followed by Italy and Poland, where, conversely, the number of enterprises has been shrinking since Figure 2. 5 Number of enterprises 2000 data are not available for Greece and Czech Republic data are not available for Greece, Bulgaria and Malta data are not available for Ireland, Cyprus and Malta. Source: Eurostat A large share of transport enterprises is represented by SMEs. Although there are differences across the European countries, the percentage of companies that have fewer than ten employees generally ranges between 65% and 95% (Eurofound 2004). In fact, their small dimensions may more easily enable transport companies to react appropriately and promptly to fluctuations in demand for point-to-point services. However, the small dimensions of enterprises present some disadvantages as well. In particular, small enterprises are more constrained in investment, less able to offer ongoing vocational training, and have less bargaining power vis-à-vis the big transport companies. Indeed, the 33

38 Policy Department B: Structural and Cohesion Policies need for faster transport services is increasingly leading to the creation of supply chains where logistics and transport companies organise the entire value chain: packaging, warehousing and the transport of goods. The big players dominate the very fragmented market and subcontract various activities to medium-size and small companies. This has gradually changed the employment patterns: while traditionally transport companies used to employ workers predominantly on a fulltime basis, the new organisation of the transport chain and services require a much more flexible labour force (ETF 2005). Despite the remarkable increases in productivity marked up in recent years, the profits of transport companies have continued to decrease, sometimes not even reaching 1% of turnover (European Commission 2006). This may be explained by: (i) the growing competitive pressure following upon the enlargement of the European Union, and (ii) the integration of new markets, bringing down the prices of transport services (Eurostat 2008). In this respect, a key factor affecting competitiveness in the European transportation industry is the difference in operating costs for the production of transport services among the Member States. The structure of such operating costs is very variable across Member States, as evidenced in Tables 2.2 and 2.3. The hourly cost associated with the driver is the highest cost component in the EU-15, whilst it ranks only second after fuel cost in the new Member States like Poland and Romania, with the exception of Slovenia. Table 2. 2 Level of operating costs (Euro per hour) Driver Total France Germany Italy Austria Slovenia Spain Poland Hungary Romania Source: Centro Studi Sistemi di Trasporto (CSST),

39 Shortage of qualified personnel in road freight transport Table 2. 3 Percentage of operating costs per hour IT DE FR ES PL AT HU SI RO Driver Vehicle purchase Fuel Insurances Taxes on vehicle Pneumatic tyre Maintenance Toll charges Source: CSST, 2008 Figure 2.6 provides an overview of average annual personnel costs in the EU Member States in Again, these costs show considerable differences across new and old Member States (with the exception of Cyprus). These costs vary between 15,900 for Portugal to 41,500 for The Netherlands in the EU-15. In Slovenia, the costs reach 14,800 per employee, but in the remaining new Member States (NMS) they do not reach the threshold of 10,000 (the Czech Republic shows the highest rate for personnel costs with 9,000, while Romania has the lowest with 2,500). Figure 2. 6 Personnel costs per employee (thousand euro, 2006) *2005 data for Bulgaria and Cyprus. **2004 data for Ireland. Source: Eurostat Considering the general investment rate (where gross investment in tangible goods is related to value added at factor cost), it may be noted that the higher rates appear in the new Member States (see Figure 2.7), and in particular in Romania which has been investing in 2006 at a greater rate than any other Member State (104.9%), followed by Latvia (94.3%) and Slovenia (58%). The older Members showed far lower investment rates in 2006, Portugal and Sweden having the highest rates (39% and 33%, respectively). 35

40 Policy Department B: Structural and Cohesion Policies Figure 2. 7 Percentage of investment rate (investment/value added at factors cost) 2000 data are not available for France, Luxembourg and Greece data are not available for Greece data are not available for Ireland and Cyprus. Data are not available for Bulgaria, Czech Republic and Malta. Source: Eurostat Regarding the number of road goods vehicles, it is to be noted that, as the goods transported by road have increased, the number of vehicles (lorries, road tractors, vans and pick-ups) has also risen in almost all Member States. Estimates for EU-27 confirm an average increase in goods vehicles by about 4.5% between 2000 and The highest rates were recorded in the Czech Republic (+70%), Slovakia (+56%), and Sweden (+46%). Looking at Figure 2.8, it emerges that the only countries presenting a decreasing stock of vehicles between 2004 and 2007 are Bulgaria (-19%), Estonia (-9.4%) and the Netherlands (-3.5%). Figure 2. 8 Goods road motor vehicles percentage variation: and Data are not available for the United Kingdom, Portugal and Greece 2006 data for Italy, France and Spain Source: Eurostat Looking at the stock, instead, in 2007 France and Spain possessed about a fifth of the total European goods vehicles each, followed by Italy, the United Kingdom, Germany and Poland (see Figure 2.9). 36

41 Shortage of qualified personnel in road freight transport Figure 2. 9 Goods road motor vehicles, 2007 (thousands) Data are not available for Portugal and Greece. *2006 data for Spain, France and Italy. **2005 data for United Kingdom. Source: Eurostat An important consideration regarding vehicle utilisation is that in general the occupancy rate of road transport is rather low, due to inefficiencies in time and space. The numbers vary over the Member States, with relatively high empty running in the Netherlands (22.5%) and Finland (20.4%), and relatively low empty running in Germany (13.3%), Portugal (13.7%) and Denmark (13.8%). With regard to the age of the vehicles, in 2006 younger road freight vehicles dominated the market in Europe, while the share of older vehicles in total tkm showed a declining trend. There has been a marked growth in the share of vehicles of two years old or less since 2004, but it has not yet returned to the level recorded in 2000, before the first enlargement. This is in part a reflection of the older age profile of the vehicle fleets of the Member States that joined the EU in 2004 and While vehicles of five years old or less accounted for more than 60% of vehicle kilometres (vkm) in the EU-15, with the exception of Belgium, Greece and Portugal, none of the Member States that entered EU in 2004 and 2007 had yet reached this threshold (see Figure 2.10). 37

42 Policy Department B: Structural and Cohesion Policies Figure Share of age categories in road goods vehicles, 2006 (%) Source: Eurostat 97/ Employment situation and trends Employment share The road freight transport sector is a major employer in the European Union. According to Eurostat figures (SBS, Structural Business Statistics), in 2006 it employed, in total, around 2.8 million persons in the enlarged Europe (EU-27). With respect to total employment, this means that freight transport by road employs on average 1.3% of the total employed population of EU-27 (see Figure 2.11). Employment in this sector is particularly significant in Luxembourg, Lithuania, Estonia, the Czech Republic, Slovenia and Spain, where it accounts for more than 2% of total employment. Figure Share 1 of road freight transport in total employment by country in and (%) LU ES SI CZ EE DK FI NL SE BE IT LT FR AT PL UK BG LV PT CY IE DE HU MT RO SK GR Shares have been calculated as total employment in the road freight transport sector as reported in Eurostat- SBS data over total employment as reported in Eurostat-LFS. 2 Data for CZ and FR refer to 1999, for PL to 1998, for SI to 2002, while data for Greece are not available. 3 Data for IE refer to 2004, for CY to 2005 and for MT to Source: own elaboration on Eurostat, LFS and Eurostat, SBS 38

43 Shortage of qualified personnel in road freight transport Moreover, the road freight transport sector is by far the largest employer among the transport service sub-sectors. As outlined in Figure 2.12, with about 2.8 million workers it accounts for 31.4% of total employment in the transport sector of the EU-27. This share tends to be particularly high in Spain and Slovenia, where employment in freight transport by road reaches 44%-45% of total employment in the transport sector (see Table C.1.25 in Annex C). Figure Employment share by mode of transport in the EU-27, year Travel agencies & tour operators 5.5% Other auxiliary transport activities(2) 24.3% Pipelines 0.2% Inland water transport 0.5% Railways 10.3% Road freight transport 31.4% Air transport 4.5% Sea transport 2.1% Road passenger transport 21.2% 1 Data for CZ refer to 2004; and for MT to Cargo handling and storage, other supporting activities, activities of other transport agencies. Source: adapted from table pg. 101 of EC(2007), EU Energy and Transport in figures, Statistical Pocketbook 2007/ Employment trends Employment in freight transport by road is being severely hit by the crisis affecting the financial and the real economy. The reduction in production and world trade implies a decrease in road freight transport activity and in demand for personnel (for more details on the effects of the present crisis on the sector see paragraph 2.4). Although comprehensive, updated data on employment in the sector are not available, some insights into the impact of the crisis on the employment trend can be afforded by national and EU stakeholders. In the United Kingdom, according to Skills for Logistics 4 between December 2008 and January 2009 vacancies decreased by 1,759. Moreover, in January 2009 there were 1,538 LGV vacancies recorded at Jobcentre Plus offices across Great Britain compared with 5,506 vacancies in the same month of 2008, a decrease of 72%. IRU yields evidence on a substantial increase in permanent or temporary layoffs, already reaching 140,000 jobs in the EU, 120,000 jobs in the CIS countries and 200,000 jobs in North America

44 Policy Department B: Structural and Cohesion Policies The European Restructuring Monitor (Eurofound) evidences a substantial increase in the scale of job reductions (actual and announced) for the transport and communication sector. In particular, Table 2.4, which provides the figures on planned job reduction and creation from 1 March 2007 to 1March 2008 and from 1 March 2008 to 1 March 2009, shows a dramatic increase, in the last year, of job losses due to firm bankruptcy or closure (7.7 thousand versus 4.5 thousand of the former year) and due to internal restructuring (almost 62 thousand versus 45.7 thousand of the former year) 6. Table 2. 4 Actual and announced job reduction and creation in the transport and communication sector in the EU Type of restructuring Announcement date Business expansion Internal restructuring Bankruptcy / Closure Merger / Acquisition Number of planned job reductions 03/ / / /2009 Number of planned job creations 03/ / / /2009 Number of cases 03/ / / / Outsourcing Off shoring / Delocalisation Other Relocation Total Source: ERM Statistics, date of extraction 16 April 2009 In spite of these recent trends, during the last few years employment in road freight transport has seen significant growth, increasing at a faster rate than total employment. Specifically, between 2000 and 2006 employment in the sector increased by 16 percentage points, compared to the six percentage points increase registered in total employment over the same period. Total European employment in the sector thus rose from around 2.4 million persons employed in 2000 to 2.8 in The employment growth in the sector observed between 2000 and 2006 is markedly differentiated across countries. The employment percentage increase was particularly notable in the New Member States (NMS), and in those countries where the initial employment was lower (see Table 2.5). In particular, a striking increase was registered in Hungary (+155%), in Latvia (+112%) and Lithuania (+88%), as well as Estonia, Romania and Slovakia (an increase of over 40%). 6 These data are purely indicative, since the analysis is descriptive and only covers the cases collected in the European Restructuring Monitor (disregarding micro and small enterprises). 40

45 Shortage of qualified personnel in road freight transport As regards the old Member States, variation in employment over the first years of the new century shows different intensities and signs from country to country. On the one hand, the Mediterranean countries such as Spain (+30%) and Portugal (+42%) registered a significant employment growth, whereas other countries experienced only a modest increase (e.g. Belgium +2%, and the Netherlands +1%) or even a decrease (e.g. the United Kingdom -10%, and Denmark -6.5%). Table 2. 5 Employment in road freight transport in and by country and employment change in road freight transport and in total economy Employed (abs) 2000 Employment in Road Freight Transport Employed (abs) 2006 Employed Abs. Var. 2006/2000 Employed % Var. 2006/2000 Total employment Employed % Var. 2006/2000 EU Belgium Bulgaria Czech Republic Denmark Germany Estonia Ireland Greece n.a n.a. n.a. 8.6 Spain France Italy Cyprus Latvia Lithuania Luxembourg Hungary Malta Netherlands Austria Poland Portugal Romania Slovenia Slovakia Finland Sweden United Kingdom Data for CZ and FR refer to 1999, for PL to 1998, for SI to 2002, while data for Greece are not available. 2 Data for IE refer to 2004, for CY to 2005 and, for MT to Totals do not include Greece. Source: own elaboration on Eurostat, LFS and Eurostat, SBS 41

46 Policy Department B: Structural and Cohesion Policies Considering employment trends at the sector level and total economy level (see Figure 2.13), the EU countries can be classified into four main groups: Group (1) countries with a negative variation in total employment but a substantial growth in employment in the road freight sector: Romania and Poland; Group (2) countries with a positive variation in both total and road freight sector employment but with significantly higher growth in the latter: Hungary, Baltic Republics, Slovakia, Portugal and Luxembourg; Group (3) countries with a positive variation in total employment but a negative variation in road freight transport employment (stability for the Netherlands and Cyprus): Denmark, Malta, the United Kingdom; Group (4) countries with a positive variation in both total and road freight sector employment but with a similar or slightly higher growth in the latter- countries above or near the blue line (i.e. the bisecting line 7 ): Spain, France; Italy, Sweden, Slovenia, Finland, Belgium. Figure Employment growth in road freight transport versus total employment growth 1 (%) GROUP 1 Road Freight Transport Employment growth 2000/ HU LT GROUP 2 SK EE RO 40 PT LU ES AT PL CZ IE 20 BG DE SI FR FI SE IT BE NL 0 CY MT DK UK Total Employment growth 2000/ LV Data for CZ and FR refer to 1999, for PL to 1998 and for SI to 2002, instead of Data for IE refers to 2004, for CY refers to 2005 and, for MT refers to 2002, instead of Greece is not included since data are not available. Source: own elaboration on Eurostat, LFS and Eurostat, SBS 7 Points on the bisecting lines mean that observed growth in total employment equals observed growth in the road transport sector, while points above the line indicate that observed growth in the road transport sector is greater than total employment growth. 42

47 Shortage of qualified personnel in road freight transport These differentiated trends in the employment growth of road freight transport have resulted in an appreciable change in country shares of EU employment in the sector. Almost all the new Member States have increased their employment share in the road freight transport sector at the expense of the old Member States, and in particular of the United Kingdom, which has seen a decrease of three percentage points. Nevertheless, in 2006, 60% of European employment in the sector was still concentrated in the five major countries: Spain, France, Italy, Germany and the United Kingdom (see Figure 2.14 and Table 2.6). Figure Share 1 of EU-27 employment by country for road freight transport in and (%) ES FR IT DE UK PL NL CZ RO SE HU PT BE AT GR DK LT SI LV IE EE SK LU CY MT 1 Shares represent estimates and have been calculated as total employment in the road freight transport sector in country j over total employment in the road freight transport sector in the EU-27. Employment shares for 2000 do not include Greece. 2 Data for CZ and FR refer to 1999, for PL to 1998, for SI to 2002, and for Greece data are not available. 3 Data for IE refer to 2004, for CY to 2005 and, for MT to Source: own elaboration on Eurostat, SBS Table 2. 6 Variation in the employment shares 1 of road freight transport in the EU-27 (absolute variation in parenthesis) Increasing employment share between 2000 and 2006 Decreasing employment share between 2000 and 2006 Spain (1.55) Portugal (0.42) Old Member States Austria (0.18) Ireland (0.05) Luxembourg (0.04) Old Member States United Kingdom (-3.02) The Netherlands (-0.67) Denmark (-0.35) Belgium (-0.32) Italy (-0.66) France (-0.17) Germany (-0.16) Finland (-0.13) Sweden (-0.09) New Member States Hungary (1.33) Romania (0.50) Lithuania (0.50) Latvia (0.30) Poland (0.29) Czech Republic (0.18) Slovakia (0.11) Estonia (0.11) Bulgaria (0.06) New Member States Slovenia (-0.02) Cyprus (-0.01) Malta (-0.01) 1 Employment shares for 2000 and 2006 and variation in the shares represent estimates. Source: own elaboration on Eurostat, SBS 43

48 Policy Department B: Structural and Cohesion Policies Employment characteristics 8 Employment by firm size: the relevance of SMEs and self-employment Road freight transport displays some of the highest shares of employment in small/medium enterprises (employing between 1 and 249 persons). The share of workers employed in SMEs reaches 90% of total employment in the majority of the Member States (see Table C.1.26 in Annex C for details on employment by firm size). In particular, self-employment and micro-enterprises (employing between 1-9) register a great share of employment in a number of small countries (Greece, Cyprus) and large countries such as Poland (71%), Bulgaria (68%), Spain (60%) and Italy, where the average firm dimension is 3.5 persons, whereas there are only a few countries where firms with more than 49 employees account for more than 40% of total road freight transport employment: the United Kingdom, the Netherlands, France, Slovakia and Luxembourg (see Fig.2.15). Figure Employment composition by firm size in the road freight transport in some EU countries, % 80% 60% 40% Firm size: number of persons employed 250 and over 50_249 20_49 10_19 1_9 20% 0% CY GR PL BG ES SI FI HU IE RO CZ PT EE LV DK* AT DE UK BE SK LT NL FR LU* 1 Data for IT, MT and SE are not available. Data for SK and DK refer to 2005 and data for BE, BG,CY and IE refer to *Size category 50_249 includes also firms with more than 249 persons employed, since data for DK and LU on large firms (250 and over) are not available due to confidentiality reasons. Source: own elaboration on Eurostat, SBS As a consequence of the high percentage of self-employed and micro-enterprises, unpaid labour 9 in road freight transport accounts for a large share of employment in many southern countries and new Member States (see Figure 2.16): Greece, Cyprus, Malta and Poland (more than 40%), Italy (38%), Spain and Estonia (around 31%). 8 9 Unless otherwise stated, the data in this section refer to the following national reports. For the England region: Skills for Logistics (2009), Logistics Sector Profile. England, at For France: Observatoire social des transports (2007), Bilan social annuel du transport routier de marchandises at For Italy: own calculations on Labour Force Survey data, In Eurostat SBS data unpaid work includes: (i) unpaid working proprietors (owners) and (ii) unpaid family workers. 44

49 Shortage of qualified personnel in road freight transport Figure Percentage of unpaid persons in total employed persons in road freight transport, 2006 (%) GR CY MT PL IT ES SI BG IE CZ HU SE FI DK DE AT BE NL UK LT FR RO SK LU PT EE LV 1 Data for IE refer to 2004, for CY to 2005 and, for MT to Source: own elaboration on Eurostat, SBS Employment by occupation: drivers account for a large share of employment In road freight transport, a large proportion of employment is accounted for by drivers. This is particularly the case with countries characterised by a fragmented market and a large number of self-employed/micro-enterprises. The data from national reports show that in Italy motor vehicle drivers account for about 72% of total employment in freight transport by road; in France the proportion of drivers among employees in the sector reaches almost 69%, whereas in the United Kingdom heavy goods vehicle (HGV) drivers account for 64% of the sector employment. Employment by gender: scant presence of women The transport services sector, and particularly freight transport by road, reveals a great gender imbalance. European Labour Force Survey data show that only 20.8% of the transport sector employment in 2006 in the EU-27 were women, in comparison with an overall female employment rate of 44.7% of total employment. As can be seen from Figure 2.17, the proportion of women in the transport sector is particularly low (below 20%) in many EU countries: Italy, Spain, Portugal, Greece, Romania, Bulgaria, Poland, Hungary, Slovenia, and Luxembourg. 45

50 Policy Department B: Structural and Cohesion Policies Figure Proportion of women employed in the transport sector (%) by country, CY EE MT LV DK DE UK AT FR NL BE SE LT FI CZ SK IE ES RO HU IT LU PT SI PL GR BG 1 Sub-sectors I60-63 of Nace Rev. 1.1 (I60:Land transport and pipelines; I61: Transport over water; I62: Air Transport ; I63: Supporting and auxiliary transport activities and activities of travel agencies) Source: adapted from Figure 5, pg. 7 of Eurofound (2007), Innovative gender equality measures in the transport industry When considering the sub-sector of land transport, the female share of the workforce falls to only 13.7% (Eurostat 2007) 10, and, in freight transport by road the percentages for women appear to be even lower, particularly among drivers (e.g. in France only 2.3% of driver employees are women; less than 1% in Italy). Female employment tends to concentrate in administrative and office-based occupations. According to the ETF members survey 11, the percentage of women among road transport workers amounts to less than 9%. These figures are in line with data collected by the European Foundation for the Improvement of Living and Working Conditions (Eurofound 2004), according to which the percentage of women in the road freight sector is below 10% in many countries surveyed (for example Belgium, Denmark, France, Finland and the United Kingdom 12 ), while only the Netherlands shows a share slightly above 10%. Employment age structure: prevalence of older workers In the transport sector the age structure of the employed population tends to exceed the average. According to Eurostat (Eurostat 2007) 13, in the EU-27 the share of the transport services workforce aged 30 to 49 was 57.3 % in 2006, 3.1 percentage points higher than the non-financial business economy average; while persons aged 50 or more accounted for one quarter (25.1 %) of the workforce, compared with just over one fifth (21.6%) for the non-financial business economy as a whole. In freight transport by road, the age structure of employment in the sector reveals, particularly in certain countries, a considerable share of near-to-retirement-age workers. For example, in Germany, in 2005, more than 50% were aged between 35 and 50 years old and about 30% were over 50 (Bundesagentur für Arbeit 14 ); in Italy, in 2007 more than Eurostat (2007), European Business facts and figures, 2007 edition. ETF Annual Membership Questionnaire, ETF Women s Conference-Mariehamn, May Unfortunately, not all countries provided data at the 4-digit level- freight transport by road. Eurostat (2007), European business. Facts and figures. Data presented by ECTA, CEFIC Recommendations on how to manage driver shortages in European chemical transport (October 2007), 46

51 Shortage of qualified personnel in road freight transport 65% were aged between (67% considering drivers only) and 21-22% were over 50; in the United Kingdom, 27% were between and 22% over 55 years old. Employment by education: low educational levels The educational level of road freight transport workers (and in particular among drivers) is relatively low, reflecting in part the age structure of the employed population and, in part, the absence of specific training programmes targeting drivers (who account for a large share of total employment in the sector). According to Eurofound (Eurofound 2004), employees with low levels of education in freight transport by road account for more than 50% in Denmark and more than 40% in Portugal and France (high percentages compared to those of total employment). Skills for Logistics (Skills for Logistics 2008) reports that in the English region about 67% of HGV drivers are qualified below ISCED 3 upper secondary school, whereas the Italian labour force survey reveals that 68% of employees in the road freight sector have only compulsory-school education (78% among drivers), compared to an average of 40% across all sectors. Employment by contractual form: small share of atypical work As regards the form of contract and atypical work, the transport sector proves to be characterised by a relatively low share of part-time employment and of temporary and fixed-term contracts. According to Eurostat (Eurostat 2007), in 2005 in the EU-25, the share of part-time workers in transport services was only 9.2%, about 12 points lower than the services 15 average. When considering land transport alone, the share of part-timers was even lower, around 7% (Eurostat, Panorama of Transport 2007). According to the data from national reports, road freight transport exhibits shares of part-time employment similar to the average of the land transport sector as a whole. For example, in France parttimers in freight transport by road account for about 8% (as against 12.6% of the total transport sector), while in Italy the share is even lower and hardly reaches 6% (less than 2% among drivers). Additionally, the road freight sector is characterised by a very high percentage of permanent contracts 16 in terms of dependent employment. This percentage is above 90% in Italy, and especially among drivers. 2.3 The impact of European enlargement on the sector The main consequences of enlargement, bringing both opportunities and threats to the sector, may be summarised as follows: increased transport demand due to: (i) stronger economic growth in the new Member States and completion of the Internal Market; (ii) increasing specialisation in production processes, inducing larger flows of goods; (iii) economic integration of the new Member States, which can attract many European firms because of their low wage levels; Service sectors G (Wholesale and retail trade), H (Hotels and restaurants), I (Transport, storage and communication) and K (Real estate, renting and business activities) of NACE classification. A permanent contract is a contract which is open-ended and is not for a fixed term, but any such contract may be lawfully terminated in various circumstances, including resignation, retirement, ill-health, gross misconduct and redundancy. 47

52 Policy Department B: Structural and Cohesion Policies increasing differences between countries in existing infrastructure, vehicle fleets, operating costs, and in environmental and safety performance; greater differences in labour costs across Member States and risk of downward pressure on wages; longer distances of intra-eu transport flows; stronger competition Enlargement and sector economic activity The accession of the twelve new Member States has significantly contributed to the changes in the overall sector in Europe. The completion of the internal market, the stronger economic growth of the new Member States and the increase in specialisation of production processes, inducing larger flows of goods, have led to an increased demand for freight transport in general. The variation in international transport flows between 2004 and 2007 is presented in Table 2.7. It may be noted that the highest growth rates in international transport are shown by the new Member States, and all the declining rates by the older Members 17. Table 2. 7 Variation of the international transport flows, (percentage, based on tkm) Positive rates Negative rates Hungary Luxembourg -0.1 Latvia Sweden -2.6 Poland 93.5 Netherlands Lithuania 74.6 Austria Slovenia 65.6 France Slovakia 64.4 United Kingdom Estonia 23.6 Belgium Greece Finland Portugal 19.2 Italy Ireland 16.9 Denmark Germany Czech Republic 7.8 Cyprus 5.9 Spain 3.7 Data are not available for Bulgaria and Romania. For Italy, 2007 data have been estimated. Source: Eurostat 17 Before accession international road transport was governed by bilateral agreements and there was a quota system which allocated permits for international journeys, limiting both the hauliers from the acceding countries and those from EU

53 Shortage of qualified personnel in road freight transport National transport systems have also been affected by enlargement. In fact, the strong pressures from the new Members operators in the international sector led many EU-15 companies to turn towards their domestic markets, causing increased competition there as well (RebelGroup Advisory, COWI A/S, Transport & Mobility Leuven 2007). In order to analyse competition dynamics and trends, it is also interesting to observe that part of transport performed as cross-trade and cabotage. Even if the absolute value of these components is rather small when compared to total transport activity, their variations and trends can offer useful evidence on competition within the European transport sector. Cross-trade 18 is a category where the hauliers of the Member States that joined the EU in 2004 and 2007 are able to make their competitive advantages felt. From Table 2.8, which presents the variation of cross-trade transport flows between 2004 and 2007, a clear trend emerges: since their entry, the new Members have shown uniformly high average annual growth rates, while all the negative rates are concentrated among the older Members. However, these figures must be read with caution, since the underlying values are very small. Table 2. 8 Variation in cross-trade transport flows, (percentage, based on tkm) Positive rates Negative rates Estonia Luxembourg -4.0 Hungary Spain -8.6 Poland United Kingdom Latvia Austria Slovenia France Lithuania Italy Slovakia Denmark Czech Republic 89.3 Netherlands Germany 33.2 Belgium Ireland 25.1 Greece 15.9 Portugal 5.6 Sweden 2.1 Finland 1.2 Data are not available for Bulgaria, Cyprus and Romania. Source: Eurostat Another important indicator of the competitive pressure generated by EU enlargement is the cabotage penetration rate. In this respect, the economies of older Member States have recorded penetration rates in their national markets higher than those of the new Members. The countries most penetrated by cabotage were Belgium, Austria, France and Denmark with penetration rates of over 2%. In contrast, all of the 12 Member States that joined the EU in 2004 and 2007 had penetration rates well below 1% (see Table 2.9). 18 Cross-trade transport is defined as international road transport performed by a road motor vehicle registered in a third country (movement of goods by road from country A to country B by hauliers registered in country C). 49

54 Policy Department B: Structural and Cohesion Policies Table 2. 9 Cabotage penetration rate by the country in which cabotage occurs, based on tkm (in decreasing range, 2007) Belgium Austria France Denmark Sweden Ireland Luxembourg 2.2 2, Netherlands Germany United Kingdom Slovakia : Greece : Italy Spain Czech Republic Bulgaria : : Portugal Finland Romania : : Lithuania : Slovenia : Hungary : Latvia : Estonia : Poland : Source: Eurostat The changes in international flows (including cross-trade and cabotage) are reflected in the variation in the sector s turnover across Member States. As already pointed out in Chapter 2.1, turnover in the freight transport industry has been growing in all the Member States; nevertheless, the turnover in the New Members shows a faster rate: the average rate for the NMS between 2004 and 2007 was 92.7% (excluding Cyprus), and the average rate for the old Members was 20.7% (Table 2.10). 50

55 Shortage of qualified personnel in road freight transport Table Percentage of turnover growth rate ( ) % % % Latvia Spain 29.9 The 21.4 Netherlands Lithuania Portugal 28.4 Germany 21.1 Slovakia United 27.5 Austria 18.0 Kingdom Romania Luxembourg 26.9 France 10.9 Poland 91.0 Denmark 24.2 Belgium 9.5 Estonia 60.4 Sweden 24.1 Italy 5.3 Czech Republic 60.0 Hungary 22.9 Cyprus 5.1 Slovenia 56.9 Finland 22.4 Data are not available for Bulgaria, Ireland, Greece and Malta data for Italy and Belgium. Source: TRT elaboration on Eurostat data Enlargement has, in fact, created a keenly competitive environment. The EU countries display marked differences in existing infrastructures and fleets of vehicles (where the older Members have comparative advantages), as well as operating costs. The labour cost differences as indicated above are causing a risk of downward pressure on wages across the EU and a general downward trend in transport service prices (Eurostat 2008). In particular, transport companies are increasingly expected to provide innovative, complex and flexible services at lower prices to satisfy the new market requirements. This, however, is not helped by the structure of the transport industry, which is mainly characterised by a large number of small operators Enlargement and employment With regard to employment, EU enlargement has led to an increase in the total number of persons employed in the sector, since, as we have already seen, one of the main impacts of enlargement has been greater demand for freight transport (strong economic growth in the new Member States; economic integration and increased trade). However, it is to be noted that EU enlargement generated its effects on employment well before the effective date of enlargement, due to a series of EU policies (integration process; pre-accession programmes and funds) and changes in regulations (cabotage liberalisation of the sector) that anticipated the enlargement date. In fact, comparing employment variations before (in the period ) and after ( ) EU-10 enlargement, the annual percentage variation in employment proves somewhat similar in the two periods under analysis, while for some new Member States employment growth tends to be even higher before EU entry. For example, employment in road freight transport grew at an annual rate of almost 27% between 2000 and 2004 in Hungary, 17% in Bulgaria, and 8% in Estonia (this is also due to low starting levels). Moreover, as already mentioned in the previous section, the integration process and EU enlargement increased the employment share of NMS to the detriment of old Member States. The data presented in Table 2.11 show, in fact, a significant decrease in employment during the period in Denmark (-2.9% per annum) and in the United Kingdom (-2.4% per annum). 51

56 Policy Department B: Structural and Cohesion Policies Table Number of persons employed in the road freight sector and annual percentage variation between and between Country Number of persons employed in road freight transport Annual percentage variation EU Belgium Bulgaria Czech Republic Denmark Germany Estonia Ireland Greece n.a. n.a Spain France Italy Cyprus Latvia Lithuania Luxembourg Hungary Malta Netherlands Austria Poland Portugal Romania Slovenia Slovakia Finland Sweden United Kingdom Data for CZ and FR refer to 1999, for PL to 1998, for SI to 2002, while for Greece data are not available. 2 Data for BG refer to 2003 and for MT to Data for IE refer to 2004, for CY to 2005 and, for MT to Adjusted for year data availability. 5 Indicative variation, since base year data vary across EU countries. Source: own elaboration on Eurostat, SBS As regards wages, as will be seen in Figure 2.18, a slight convergence seems to emerge in average wages during the period between new and old Member States. In particular, the percentage annual increase in average wages tended to be particularly large in almost all NMS (excluding Bulgaria, Cyprus and Slovenia). Instead, in the old Member countries, where average wages in 2002 were relatively high compared to NMS, the annual increase observed during the period in question was modest or even negative (e.g. Germany and, to a lesser extent, Denmark). 52

57 Shortage of qualified personnel in road freight transport Nonetheless, due to large initial differences in average income levels between NMS and old EU countries, convergence in wage levels is going to take several years. Figure Wage convergence in the EU-27: percentage annual variation in average wage over the period 2002 and 2006 and average wage in 2002 (thousand euro) 1 1 Percentage annual variations are calculated over the period for CY, and over the period for BE, NL, PL and SE. For these countries the average wage level on the horizontal axis refers to Data for Greece, Malta and Ireland are not available. Source: own elaboration on Eurostat, SBS 2.4 The impact of the economic crisis The world economy is facing its worst economic downturn in decades. The financial crisis, creating a situation of adverse credit conditions, has turned into a full-blown economic crisis, provoking a severe contraction of manufacturing output and world trade. In 2008, GDP started to fall and the euro area entered its first technical recession, and in 2009 real GDP is expected to keep falling. The first impact of the economic recession on transport services is the reversal in transport trends after years of steady increase in transport volumes. Freight is the first component of transport to feel the crisis, since it is more directly linked to economic activity and trade. The demand for road freight transport services has been slowing down dramatically since the end of 2008, and the downward trend is growing increasingly sharp. In particular there is concern about the impact on transport activity of the manufacturing and construction industry, since in 2006 crude, manufacturing minerals and building materials accounted for 47% of goods volumes carried in the EU-27 and Norway. According 53

58 Policy Department B: Structural and Cohesion Policies to the European Commission 19, overall new manufacturing orders have fallen sharply since the third quarter of 2008, returning to a level similar to that of 2000, and the construction industry is a source of particular concern: the sector s production index fell steeply from the first quarter of 2008 and had by 2009 declined to the same levels as at the beginning of In the same document, the European Commission reports the dramatic impact on HGV traffic caused by the economic downturn. Traffic volumes on motorways dropped by between 5% in France and 34% in Spain from December 2007 to December The first figures for 2009 suggest that this trend will worsen in the near future. For example, traffic in Austria (measured in vehicle per kilometre) dropped 8.3% in December 2008 compared to the same month a year before, while the decrease recorded in January 2009 reached 20.3%. The fall in traffic is also to be seen when measured in terms of average daily traffic (ADT): ADT in the Liefkenshoek tunnel in Belgium was reportedly 5% lower in December 2008 than it was the same month the year before, and 22% lower in January. International road traffic, which was set to grow rapidly before the crisis, also appears to be affected by the recession. The latest statistics from German motorways (Mautstatistik) show that the number of HGVs crossing borders on toll roads in Germany in February 2009 had decreased by 17.3% from the previous year. An increasing number of road haulage companies are having difficulties keeping up with their payments. According to the International Road transport Union (IRU) 20, the number of bankruptcies of road haulage companies may have increased by up to 110% since the end of In particular the SMEs, which largely characterise the road transport sector, are economically more fragile. The French Road Transport Organisation (Fédération Nationale des Transports Routiers, FNTR, 2009) reports that out of 581 insolvency cases recorded in the road goods transport sector in France in the first quarter of 2009, 84% took place in small or very small enterprises. However, larger companies (over 50 employees), which usually subcontract to self-employed ones, are also at risk. Again according to the FNTR, cases of insolvency increased threefold in French businesses of more than 50 employees between 2008 and For 2009, haulage tariffs are already showing a declining trend 21 and the investment rates of enterprises also risk falling sharply 22. Orders for new road transport vehicles have already plunged and in some countries have almost come to a standstill. According to figures published by Renault Trucks, in 2009 the European trucks market dropped by 37% from This appears to be the worst performance by the market since 1995 and could lead to an ageing fleet, higher operating costs and lower environmental performances. The results communicated by the European Association of Automobile Manufacturers (ACEA 2009) confirm this view: in February 2009, new registrations of commercial vehicles in the EU-27 and EFTA (without Cyprus and Malta) European Commission, Commission hearing to discuss ways to help road hauliers affected by crisis, Short term impact of the financial and economic crisis on the road haulage sector, 15th April IRU, Resolution to reduce the impact of the economic crisis on road transport, AG/G9360/JHU, Geneva, 3 April UNECE, Transport Division, Review of the transport situation and emerging trends in the ECE region, Geneva, 24th February European Commission, DG for Economic and Financial Affairs, Interim forecasts, January

59 Shortage of qualified personnel in road freight transport dropped, by a record 38.7%, to 129,580 units. The sharp downturn affected all vehicle categories and all countries. Registrations declined by 38.1% in Western Europe and by 44.0% in the new EU Member States. New light commercial vehicle registrations (up to 3.5 tonnes) decreased by 38.1% in comparison with All markets were severely affected by the crisis. Among the major markets, the downturn was 22.1% in France, 29.4% in Germany, 37.0% in Italy, 53.1% in the United Kingdom and 58.8% in Spain. In the new EU Member States, the largest markets were also down, by 14.4% in Poland and 35.0% in the Czech Republic. Also new heavy truck registrations (over 16 tonnes) dropped significantly, declined by 46.4% compared to February In Italy and Spain the market contracted by 49.6% and 76.9% respectively. In the new EU Member States, Poland, the most important market, plunged by 71.6%. Finally, the February results in the truck segment between 3.5 and 16 tonnes are similar to those noted for heavy trucks, with a 43.7% downturn composed of a 39.0% fall in Western Europe and a 70% drop in the new EU Member States. Of the biggest markets, the Netherlands contracted by 15.4%, France by 25.3%, Germany by 38.9%, the United Kingdom by 41.6%, Italy by 43.1% and Spain by 73.6%. In the new EU Member States, the Polish market dropped by 65.5%. The cumulative figures from January to February show a 36.5% decrease in Western Europe and a 67.9% drop in the new EU Member States, resulting in an overall 40.5% decline. In absolute figures, Germany (-35.0%) registered the highest values, followed by France (-29.1%), Italy (-34.1%), the Netherlands (-7.1%), the United Kingdom (-45.7%), Belgium (-21.6%), Spain (-76.5%) and Poland (-68.8%). On the other hand, investment in transport infrastructure could be growing in some countries. Mid-term projections 23 suggest investment could be stepped up by governments to avoid the liquidity trap 24. In this respect, the European Union Road Federation (ERF) 25 believes road infrastructure investment could help to mitigate the effects of the economic slowdown and to overcome the crisis and stresses the urgency for the European Commission to develop an economic recovery plan tuned to prioritising infrastructure building and maintenance. At the moment the European transport agenda is mainly focused on measures providing for additional charges for the road transport sector, which will only have the effect of aggravating the already critical economic situation. The sharp economic downturn has had a profound impact on the labour market, as already seen in Chapter 2.2. According to the European Commission 26, deterioration in the labour market situation started in late 2008, reflecting the usual lag in employment change to changes in GDP growth, as companies react to reduced demand and tighter financing conditions. As a result, employment is expected to fall drastically in 2009, while the UNECE, Trade and transport facilitation can help in economic crisis, ECE/TRANS/09/P02, Geneva, 24 February A liquidity trap is a situation in monetary economics in which a country's nominal interest rate has been lowered nearly or equal to zero to avoid a recession, but the liquidity in the market created by these low interest rates does not stimulate the economy, since borrowers prefer to keep assets in short-term cash bank accounts rather than making long-term investments. This makes a recession even more severe, and can contribute to deflation. European Union Road Federation (ERF), Press Releases, Facing the crisis, 18 March European Commission, DG for Economic and Financial Affairs, Interim forecasts, January

60 Policy Department B: Structural and Cohesion Policies unemployment rate is expected to increase, reaching 9.5% in 2010 (10.2% in the euro area). Within the road transport sector, according to IRU figures, a total of 140,000 jobs in EU road freight transport are currently at risk or have already been lost since the end of As of January 2009 an estimated 16,000 jobs were lost in Spain, and 10,000 jobs have been lost in France and 4,000 in Belgium, following cases of bankruptcy since the beginning of the crisis. The number of jobs lost is only one indicator of the effects of the crisis on employment. Employment conditions in existing jobs are also affected, since many businesses are choosing to reduce or adapt working hours. With specific regard to the driver shortage issue, the decline of transport activities is understandably downsizing the problem at least for the moment, first of all by reducing the labour demand because of the strong decline of transport activity, but also by increasing the supply of an available workforce due to the high unemployment rates. Box 4. 1 The impact of the financial crisis: comments from the IRU On 3 April 2009, the International Road Transport Union s (IRU) General Assembly unanimously adopted a Resolution 27 aiming at reducing the impact of the economic crisis on road transport. In order to cope with the decline in the sector, the IRU urgently calls upon the authorities concerned to stop imposing restrictions on road transport and creating new charges like, for instance, those provided for in the revision of the Eurovignette Directive. Also, adequate credit lines could be provided by the financial institutions enabling transport operators to finance their investments and operations; at the same time, the policy makers could provide business incentives to transport operators, encouraging them to keep investing in innovation and sustainability. Moreover, insolvency legislation could be made more flexible, allowing road transport companies to reduce their transport capacity and to keep pursuing profitable business operations rather than liquidating the entire company. The IRU also suggests creating a legal and administrative framework enabling the road transport industry to place skilled personnel on inactive status without having to lay them off. In fact, even if temporary redundancy of human resources is likely during the crisis, the qualified personnel will be most needed when the crisis is over. Finally, efforts should be made to eliminate the risk of neo-protectionist barriers to international road transport. 2.5 Current EU legislation on the transport sector The last decade has witnessed a period of intensive transport legislation. Following the considerations made in the mid-term review of the White Paper on transport, the European Union has actively responded to the need to take further and, above all, harmonise the various legislative acts in this policy area. The overall goal of the European Union s activity in the field of road transport is to enhance efficiency, safety, security and environmental performance of road transport in all Member States. This has been progressively translated in the existing legislation, which, among other things: (i) identifies common rules on access to the market and to the profession, (ii) establishes minimum standards for working time, driving and rest periods (including 27 IRU, Resolution to reduce the impact of the economic crisis on road transport, AG/G9360/JHU, Geneva, 3 April

61 Shortage of qualified personnel in road freight transport enforcement and the use of the tachograph), and finally (iii) establishes a uniform Community driver attestation. This evolution in the acquis communautaire for the road transport sector may also be considered as a natural consequence of the EU enlargement process. The transport legislation that the New Member States have been called upon to implement is a significant part of the whole acquis, representing about one tenth of the total of Community laws and rules. Moreover, it is to be noted that the task for the New Member States has been twofold, as they have had not only to adopt the EU legislation in their own national legislation, but also to transpose legislation evolving and changing during the enlargement process 28. Of all EU legislation on road transport, the directives and regulations most relevant to driver shortage are summarised in the Table below (see Annex A for further details). Table Main recent acts of European social legislation regarding the road freight transport sector Name Reference Main aims Main provisions Admission to the occupation Access to the Market Directive 96/26/EC Directive 98/76/EC Harmonisation at EU level of admission to the occupation of road transport operator, in order to obtain: (i) mutual recognition of qualifications, (ii) better qualified transport operators, (iii) improvement in quality of service and (iv) road safety. Specifies the scope of Directive 96/26/EC. Defines and amends existing rules regarding admission to the occupation (financial; standing; good repute; permits; driver training) of road transport operator in national and international transport. Amends the requirements relating to the financial standing of transport operators and lays down certain transitional provisions applicable to Austria, Finland and Sweden. Digital tachograph Regulation (EC) 2135/98 29 Regulation (EC) 1360/2002 (i) Increasing safety on the road and for drivers; (ii) aligning conditions of competition among companies; (iii) supporting enforcement of working times and rest periods Introduces the digital tachograph and tightens the minimum controls. It applies to newly registered EU vehicles. Adapts the regulation on recording equipment in road transport to technical progress for the seventh time The overall Transport Acquis went from 2,896 (end of 1999) to 7,780 pages (end of 2004). As amended by Regulation (EC) 1360/2002 (Technical specifications for digital tachograph). 57

62 Policy Department B: Structural and Cohesion Policies Table Main recent acts of legislation regarding the road freight transport sector (continued) Name Reference Main aims Main provisions Driver attestation Working time Directive Driving and periods time rest Certificate of Professional Competence Regulation (EC) 484/2002 Directive 2002/15/EC Regulation (EC) 561/2006 Directive 2006/22/EC Directive 2003/59/EC (i) Guaranteeing equal working conditions to non- EU drivers employed by EU transport companies; (ii) aligning conditions of competition among hauliers. Establishing minimum requirements in relation to the organisation of working time in order to: (i) improving the health and safety protection of persons performing mobile road transport activities, (ii) improving road safety, and (iii) aligning conditions of competition. Improving road safety and working conditions in the road transport sector. Ensuring proper application and harmonised interpretation of and approach to the social rules on road transport through the establishment of minimum requirements. Harmonising driver qualifications and encouraging EU Member States to provide better training for professional drivers. Introduces a uniform Community attestation, which certifies that a driver is employed in the haulier s Member State of establishment, consistently with the laws and regulations applicable in that Member State. Applies to EU hauliers who employ non-eu drivers. Introduces rules limiting weekly working time, breaks, rest periods and night work, for mobile workers employed by undertakings established in a Member State (from 23 March 2009 these rules also apply to self-employed workers). Introduces clearer rules about driving times, breaks and rest periods for professional drivers operating both national and international transport. Supplements the provisions of Regulation (EEC) No 3820/85 on minimum conditions for the implementation of social legislation in relation to road transport activities. Introduces a Driver Certificate of Professional Competence (CPC) and periodic training for vehicle drivers (from 18 years old) who are employed or used by an undertaking established in a Member State. 58

63 Shortage of qualified personnel in road freight transport Box 2. 1 EU legislative proposals for updating the current regulatory framework Road package. The road package includes three draft regulations defining the conditions governing market access in international freight and coach transport and the conditions for the occupation of road transport operator. The package, inter alia, lays down rules for the operation of national road haulage services by a transport operator not established in the given country (cabotage). On 23 April 2009 the EU Parliament adopted the following resolutions related to road freight transport: European Parliament legislative resolution of 23 April 2009 on the Council common position for adopting a regulation of the European Parliament and of the Council establishing common rules concerning the conditions to be complied with to pursue the occupation of road transport operator and repealing Council Directive 96/26/EC (11783/1//2008 C6-0015/ /0098(COD)); European Parliament legislative resolution of 23 April 2009 on the common position adopted by the Council with a view to the adoption of a regulation of the European Parliament and of the Council on common rules for access to the international road haulage market (recast) (11788/1/2008 C6-0014/ /0099(COD)); European Parliament legislative resolution of 23 April 2009 on the proposal for a directive of the European Parliament and of the Council laying down the framework for the deployment of Intelligent Transport Systems in the field of road transport and for interfaces with other transport modes (COM(2008)0887 C6-0512/ /0263(COD)) 30. Facilitation of cross-border enforcement in the field of road safety. The draft directive aims at facilitating the cross-border penalisation of traffic offences, e.g. driving under the influence of alcohol, speeding, failing to stop at red lights, or driving without using seat belts. According to the European Commission s statistics, these types of offences account for 75% of all offences committed on European roads. Amendment to Directive 2002/15 on the working time of persons performing mobile road transport activities. Directive 2002/15 establishes minimum requirements in relation to the organisation of working time, periods of availability, night work and other aspects of labour law, in order to improve the health and safety protection of drivers and other travelling staff performing mobile road transport activities. Eurovignette. The Eurovignette Directive lays down rules the Member States must follow when introducing systems for charging for heavy goods vehicles, whether in the form of motorway toll stickers or tolls, and setting the amounts of these charges. The primary aim of the amendment to this Directive is to enable Member States to include certain external costs in these charges (costs resulting from the negative environmental impacts of transport). More specifically, these are costs caused by air pollution, noise pollution and traffic congestion. In July 2008, the European Commission adopted a Proposal for a Directive again amending the Eurovignette Directive. On 11 March 2009 the European Parliament adopted the 30 See Annex A.10 Road package at pages

64 Policy Department B: Structural and Cohesion Policies legislative resolution 31 with 359 votes in favour, 256 against and 86 abstentions. The measure maintains that Member States can charge heavy good vehicles for the pollution, noise and congestion they allegedly produce. The calculation method used to define the amount of the congestion charge will be left to Member States to decide. The revenues have to be reinvested in greener and alternative modes of transport. According to the new text, the Eurovignette rules would apply to all TEN roads and roads which customarily carry a significant volume of international goods transport. Sources: Czech Presidency of the European Union, 2009 European Parliament, europarl.europa.eu Box 2. 2 Transport and sustainability Sustainable transport is an increasingly important issue in European politics, on both the European (European Commission, 2006) and national scale. The aims are to ensure energy security, protect the environment and promote minimum labour standards. Two key environmental targets were set by the European Council in March 2007 (European Commission 2008): a reduction of at least 20% in greenhouse gases by 2020 (rising to 30% if there is an international agreement committing other developed countries to comparable emission reductions and economically more advanced developing countries to contribute adequately according to their responsibilities and respective capabilities ); a 20% share of renewable energies in EU energy consumption by The European transport sector consumes 31% of all the energy used, and road traffic consumes 83% of the energy of the whole sector. It is greatly dependent on oil supplies, and there is concern about climate change together with longstanding problems regarding congestion, noise and urban pollution. Policy efforts to change the balance between transport modes can be expected to continue in the future. Modal shift from road transport to other inland modes and the implementation of efficiency measures within the sector could reduce the need for labour in freight transport. But the potential environmental benefits of modal shift from road transport to rail transport should not be overestimated. The modal share of rail transport is only 13% in freight transport. Even in a very optimistic scenario, in which these rail shares were doubled, this would only lead to a reduction of road transport emissions of less than 10% (European Commission, 2006). The potential effects of technological improvements and increased efficiency in the road transport sector are much larger. Some measures could include: improving truck routings, increasing load factors and reducing empty running, controlling emissions, improving vehicle efficiency and the development of alternative transport fuels. A study (CEMT, 2007) calculated that emissions could be considerably reduced by encouraging the right way of driving: an economical drive can lower emissions by 10%-15%, which means that training in this direction is not only desirable but a real necessity European Parliament resolution of 11 March 2009 on the greening of transport and the internalisation of external costs (2008/2240(INI)). See also the EP vote on the Climate Package adopted on : legislation for a post-2012 emissions trading scheme (ETS); the effort towards sharing of emissions reductions from non-ets sectors; renewable energy; fuel quality; CO2 emissions limits for cars; and a framework for carbon capture and storage. 60

65 Shortage of qualified personnel in road freight transport 3. DRIVER SHORTAGE: QUANTIFICATION OF THE PROBLEM AND ITS MAIN DETERMINANTS KEY FINDINGS In recent years the European heavy truck transport industry has been suffering from a serious structural shortage of skilled professional drivers (estimates showed that around 75,000 extra drivers were needed for 2008). However, the current economic crisis has mitigated the shortage problem, due to the current economic downturn, the reduction in transport flows and the resulting overcapacity in the sector. The observed shortage of qualified drivers is the result of a composite process driven by forces operating both on the demand side and on the supply side. The main determinants of the shortage can be grouped under four main headings. 1. Changes in socio-economic factors, such as global economic growth, EU enlargement and changes in logistic processes, have substantially increased the demand for drivers. 2. Demographic changes and the ageing of the workforce in road freight transport are bringing about a rapid exit of skilled and experienced drivers, not adequately replaced by newcomers. 3. Poor working conditions and low job attractiveness negatively influence the supply of labour; this is due to the negative image of the sector, long, antisocial working hours, long periods away from home, stress and road congestion, as well as deficiencies in rest facilities, gender discrimination and, last but not least, low wages and poor career prospects. 4. Changing skill needs, determined by drastic changes in the sector (supply chain, ICT, innovation, social and road regulation, etc.), have extended the skills required of drivers and augmented job complexity, increasing the demand for qualified labour. This Chapter analyses the nature and main determinants of the shortage of qualified personnel in freight transport by road within the EU. Firstly, the dimension and recent trends of personnel shortage are quantified, and then the main problems and challenges that underlie the shortage are presented. 61

66 Policy Department B: Structural and Cohesion Policies 3.1 Is there a driver shortage in Europe? A quantitative assessment There is strong evidence (Eurobarometer 2008; IRU 2007; national surveys) that the European heavy truck transport industry has in recent years been suffering from a serious structural shortage of skilled professional drivers, although transport capacity has not been affected by this structural shortage at the same time and with the same severity across Europe. Although the driver shortage is a structural problem for the road freight sector, considering the difficulties in recruiting qualified manpower, the current economic situation has radically changed the perception of its urgency. According to the answers to the direct interviews conducted with the relevant stakeholders, it is clear that the current economic downturn and overcapacity in the sector have led to a scenario where the problem of the driver shortage no longer ranks among the top priorities. However, it may emerge again as the economy recovers. Box 3. 1 Downward economic trend and driver shortage Today, due to the economic downturn and overcapacity in the sector, the problem of shortage of drivers does not exist. However only six months ago the sector suffered severely from the shortage, up to the point that normal supply of transport services was affected. (Eurcartrans ECG - a European car-transport Group of interest 33 February 2009). Driver shortage is not a present problem, also because of the economic situation. But in approximately two/five years time in Sweden we will have a lack of young people of the age of (TYA 2008). Driver shortage is not a present problem since the negative economic cycle has a strong impact on this sector and hence on driver demand. However, in connection with the driver shortage, structural factors also have to be considered. (Filt-Cgil Italy). Quantitative estimation of the driver shortage in Europe is, however, a difficult exercise. According to the European Transport Barometer, in 2008 the shortage ratio, calculated as the number of vacancies over total employment of drivers in the sector, stood at 3.8%. The overall situation for selected European countries is summarised in Figure 3.1, where it clearly emerges that the driver shortage is an issue of major concern in Poland, the Czech Republic, the Netherlands, Portugal and Spain. 33 ECG, the European Association of Vehicle Logistics, brings together the 86 leading European vehicle logistics companies. Its members operate in distribution, transportation, handling, preparation and processing of vehicles in Europe. ECG was founded in 1997 as a non-profit-making organisation, the aim being primarily to represent the interests of the sector vis-à-vis the EU institutions. The ECG also facilitates collaboration between member companies and assists them in the development of areas such as Training, Public Relations, Quality and Procurement. 62

67 Shortage of qualified personnel in road freight transport Figure 3. 1 Driver shortage ratio per country Source: European Transport Barometer, 2008 Table 3.1 presents an estimate, for selected EU countries, of the extent of driver shortage (in terms of number of drivers), based on driver shortage ratios provided by Eurobarometer on employment data from Eurostat-SBS for 2006, and on a set of assumptions. In particular, the following assumptions are made. The shortage ratio in 2008, as calculated by Eurobarometer (number of job vacancies over the total drivers employed) is assumed to be a correct measure for driver shortage. In particular, the ratios provided are: EU-27 (3.8); Belgium (3.6), Czech Republic (5), Germany (3.3), Spain (4.5), France (2), Italy (3.9), the Netherlands (4.8), Poland (5), Portugal (4.6), Romania (3.2), United Kingdom (0.7) (European Transport Barometer, 2008). The number of drivers in 2008 is estimated as 70% of total employment in road freight transport (Eurostat- SBS data for 2006). Table 3. 1 Estimated driver shortage and quantity of transport lost in 2008 Estimated number of drivers Assumed shortage ratios Estimated driver shortage EU Belgium Czech Republic France Germany Italy Poland Portugal Romania Spain The Netherlands United Kingdom Source: TRT elaboration based on Eurobarometer and Eurostat data 63

68 Policy Department B: Structural and Cohesion Policies These estimates are similar in magnitude to those reported by NEA and IRU (IRU 2007) on the basis of a joint survey, which provides the following figures about these four countries: The Netherlands: 5,000 drivers; Norway: 4,500 drivers; Belgium: 3,000 drivers; Lithuania: 2,500 drivers. In Poland, instead, the sector has shown continuous growth in recent years, a study 34 on the issue estimated a shortage of 30,000 qualified drivers. In Sweden, where the labour market tendency survey 2008 conducted by the TYA (2008) shows that there is a strong demand for professional truck drivers: four out of ten Swedish road carriers have predicted an increased need for truck drivers in 2009, and four out of ten companies also reported that recruitment of skilled staff would probably be difficult. Overall, and based on the recruitment needs of the 1,100 road carriers surveyed belonging to the Swedish Road Transport Employers Association (BA), the TYA has estimated that Sweden would need more than 7,000 truck drivers for the period ; this figure is on a par with According to the Statistics Sweden s Labour Market Tendency Survey 2007 this lack of professional drivers has to be seen as relating to both newly examined and experienced drivers. In the short term, the need for professional drivers is expected to grow, and in the long term freight transportation is expected to grow considerably, most likely resulting in a prolonged lack of professional drivers. The Swedish Public Employment Service provides a more cautious analysis in its publication Labour Market Outlook , as it states that The strong economic growth during the past years has led to an increased need for transportation. The Swedish haulage industry has been furthered by the growing freight volume due to the growing activity within the manufacturing industry, the building industry and trade. A high number of road carriers still believe in a growing demand, but the difference is significant compared with last year s survey. Employment has continued to grow, despite the slower increase in demand. With regard to France, two different studies have calculated the tension indicator in the truck driver labour market as the ratio between demand and supply. Considering 0.33 to be the normal value (meaning one job vacancy offered every three workers searching), both studies show high tension emerging in the French driver labour market. The resulting values differ but the same trend emerges: the shortage was truly acute at the end of the nineties then decreasing until , and again rising in the most recent years. 34 Financieel Dagblad, Poolse Vrachtwagenchauffeurs zijn op 12, January

69 Shortage of qualified personnel in road freight transport Table 3. 2 Tension indicators in France Tension indicator produced by: CAS, ANPE-DARES Source: CAS (2008); ANPE-DARES 35 Finally, a recent survey conducted by Manpower 36 to determine the extent to which talent shortages are impacting today s labour market shows that the occupation of driver ranks amongst the top ten jobs that employers are having difficulty in filling in most of the EU countries (see Table 3.3, where a selection of eleven old and three new Member States have been considered). Table 3. 3 Position of drivers among the top ten shortage occupations in some EU countries Rank among top ten shortage occupations Countries 2 nd position Belgium, France, Germany and Poland 3 rd position Czech Republic, Ireland, The Netherlands, and Sweden 6 th position and over Austria, Romania, Spain, Italy, The United Kingdom Not ranked in the top ten *Data for other EU countries are not available. Greece Source: adapted from Manpower (2008), Talent Shortage Survey Global Results 3.2 Main determinants of the shortage of qualified drivers The shortage of qualified drivers observed in the sector is the result of composite driving forces operating on both the demand side (e.g. sector growth, EU social regulations) and supply side (e.g. negative image of the sector/occupation of driver, changing skill needs) of the labour market. These factors tends to be common across European countries. In particular, the main problems and causes for the driver shortage can be grouped under five main headings. Socio-economic factors. Global economic growth coupled with EU enlargement are bringing about an increase in the demand for road transport and hence drivers. Demographic factors. An ageing driver population and a shrinking working age population are reducing the labour supply. Work attractiveness. The low job attractiveness in road transport has repercussions on new entries and on the retention of current workers. In particular, the Only available at in French only. Manpower (2008), Talent Shortage Survey Global Results. The survey was conducted by the US branch of the Manpower company. 65

70 Policy Department B: Structural and Cohesion Policies attractiveness of the transport professions (particularly of long-distance drivers) tends to be low due to a number of aspects that are negatively perceived by the drivers and that relate to both the physical environment and the social conditions in which drivers work: a negative image of the occupation, health-and-safety-related issues, the negative impact of the job on drivers social and private life, relatively low wages and poor career prospects. Qualifications: skills and training. Technological innovation, globalisation, increased complexity of regulations and additional tasks have entailed a substantial transformation of jobs in the transport sector, requiring new and more complex skills and training needs, and resulting in a shortage of qualified personnel. EU regulations. The multiplicity and complexity of recent EU legislation regulating the sector have an indirect impact on the labour shortage, acting through modification of labour demand, working conditions, skills requirements, etc. The net impact of EU regulation on the labour shortage is, however, hard to quantify. 37 The driver shortage is a composite phenomenon and depends on manifold factors. In the following sections each of the above-mentioned factors is discussed in detail Socio-economic factors Economic growth and transport demand The demand for drivers is closely related to the economic trend in freight transport activities, which is in turn closely associated with total economic growth. The great dependence of economic and social activity on transportation is indicated by their remarkably high observed elasticity values. Worldwide, the OECD (OECD 2006) calculates that a 1% increment in GDP is generally accompanied by an increase in total freight transport of 0.7%-1.5%. With regard to the European Union, the European Commission estimated (Eurostat, Panorama of Transport 2007) an average GDP elasticity of freight transportation activity of 0.90 for the period 1990 to Observing the European aggregate data for past economic and transport developments (illustrated in Figure 3.2), a notable positive trend emerges. In ten years the GDP grew by 25%, at an average annual growth rate of 2.3% and, at the same time, transport activity grew by 31%, at an average annual growth rate of 2.8%. It is to be noted, even if the data series are incomplete, that road freight transport grew even more (38%), reaching an average annual growth rate of 3.3%. 37 See infra par

71 Shortage of qualified personnel in road freight transport Figure 3. 2 The relationship between GDP and demand for transport ( ) Tkm Total = Goods transported by road, sea, rail, inland waterways, pipelines and air (tkm) Tkm Road = Goods transported by road GDP at constant price (1995). Source: DG Energy and Transport, Eurostat A closer look at the period 2000 to 2005 shows that the GDP elasticity of freight transport rose as high as 1.45 and that the elasticity of freight transport by road rose even more. This reflects the considerable increase in commodity trading following EU enlargement and the completion of the Internal Market. However, the changing structure of the EU economy vis-à-vis services combined with the productivity gains in transportation could generate a gradual decoupling of freight transport from GDP growth, with dissociation of transport growth from economic variation. In fact, this high value of GDP-transport elasticity seems to reflect a transitory phenomenon: it is likely that in the future freight transport will at the most grow as fast as GDP. Logistics trends and transport demand The increase in transport demand has also been further driven by changes occurring in the logistic chain due to production and market developments. In particular, there are certain factors especially relevant to the demand for transport and consequently the demand for personnel and drivers. 67

72 Policy Department B: Structural and Cohesion Policies Table 3. 4 Overview of main logistic changes leading to an increase in transport demand Change Concentration of production Concentration of inventory Vertical disintegration production Upstream downstream sourcing Logistic outsourcing of and Increase in direct delivery Description Due to reduction in the total number of factories. In many sectors (like processed food, automobiles and textiles) the focus moved from nationally based production to single locations producing a particular product for the world market. This has proved one of the most pronounced trends in logistics over the last few decades. A reduced number of stockholding points can yield a financial benefit far greater than the additional transport cost they have to bear. Resulting from the concentration of core competences of many firms. Vertical disintegration of production is adding extra links to the supply chain and increasing the transport intensity of the production process. Wider geographical sourcing of suppliers (upstream) and wider distribution of finished products (downstream) are extending the companies supply lines upstream and downstream. Differences in purchasing and manufacturing or labour cost are the main reason for global sourcing strategies. The cost savings obtainable through information technologies and/or supply chain integration favour this trend. As companies seek to concentrate on their core competencies, logistics activities are increasingly being outsourced to specialist providers. This is related to the concentration of production and inventory and the diffusion of the Internet. It enables manufacturers to bypass wholesale and retail channels and so cut costs. EU Enlargement As already mentioned in Chapter 2.3, enlargement of the European Union, bringing about stronger economic growth among the new Members and an increase in specialisation of the production processes, has induced larger flows of goods and led to an increased demand for freight transport in general. The freedom of movement of the labour force in the enlarged market raised both threats and opportunities. Enlargement has created a keenly competitive environment, especially with regard to international transport. The lower labour costs and poorer working conditions in the new Member States may bring a downward pressure to bear on wages across the EU and a general price deterioration of transport services (Eurostat 2008), even if a convergence of wage levels and operating costs is expected in the long term 38 (although a convergence trend can be detected on the evidence of Figure 2.18, full convergence cannot be expected within the next 20 years). Moreover, at the beginning of EU enlargement there was concern that NMS drivers would substitute more expensive EU-15 drivers and that NMS companies would take a large share of the market, leading to job losses in the EU-15. This concern regarded international transport in particular, but also domestic transport through 38 See page

73 Shortage of qualified personnel in road freight transport cabotage. Expectations proved to be well-grounded in the case of bilateral transport relations: the number of EU-15 drivers in road transport between EU-15 and NMS declined considerably because of their relatively high costs, and NMS drivers obtained a share in international flows between EU-15 countries, albeit on a lesser scale. Nevertheless, the social impact in the EU-15 has proved less harsh than expected, since the demand for road transport services has also increased sharply, with growing demand for drivers. Moreover, since EU-15 drivers are less keen on working internationally because of the long hours and long periods away from home, the older Members loss of market share in international road transport has not led to major reductions of employment (RebelGroup Advisory, COWI A/S, Transport & Mobility Leuven 2007). Finally, it should be recalled that the increased demand for the less expensive NMS drivers by EU-15 companies has also brought about a driver shortage problem in many NMSs Demographic factors Ageing of the workforce in road freight transport Another determinant of labour shortage can be found in the change in demographic structure of the sector. The ageing of the workforce employed in the freight transport sector is a matter of concern in many EU countries, since it implies the rapid exit of skilled and experienced workers. Three examples are to be seen respectively in the United Kingdom, France and Germany. With regard to the United Kingdom, the first country to suffer from driver shortage, Nextstep West Yorkshire Partnership conducted a survey in July 2005, and reported that because of the few employees in the age range coming through, concern was shown about driver shortages and future workforce supply as drivers retire. According to this survey, most workers in the UK road freight sector were aged between 35 and 44 and a significant number were over 55. The survey pointed out that for new entrants to the labour market, road haulage was not considered an attractive career, mainly due to poor wages and working conditions, and the time spent away from home, particularly on international journeys. The problem of the ageing of the workforce in the transport sector in the United Kingdom was also evidenced by Skills for Logistics, which confirmed in its 2007 survey that the retiring age of the driving workforce was a crucial concern (about 20% of drivers were leaving the industry each year due to retirement or ill health), since it could imply future problems if the ageing workforce were not bolstered with younger, new recruits. In this respect, the survey Skills for Logistics underlined in its report that only 10% of LGV driver vacancies advertised in 2006 had been filled by workers coming from other industry sectors without specific qualifications or competences. In France the Service Economie, Statistiques et Prospectives (SESP) reports an average age slightly increasing, from 38 years in 2000 to 38.8 in Furthermore, according to the Fédération Nationale des Transports Routiers (FNTR) only 54% of employees are under 40 years old. From Table 3.5 it is evident that the problem of an increasing number of drivers retiring also emerges significantly in France, where it reached a peak in 2004 with more than 5,000 drivers leaving the sector. 69

74 Policy Department B: Structural and Cohesion Policies Table 3. 5 Retiring drivers in France Year No of retiring drivers Source: OPTL, 2009 Ageing is also perceived as a key problem in Germany where, according to the Federal Agency for Work (Bundesagentur für Arbeit), which has observed the development of the age profile of truck drivers, drivers aged over 50 accounted for nearly 30% of the whole driver workforce in the truck industry in 2005 (see Figure 3.3). Figure 3. 3 Development of the age profile of truck drivers in Germany Source: Bundesargentur fur Arbeit, Working conditions and job attractiveness Working conditions and job attractiveness strongly influence the supply of labour for any occupation. As regards road freight transport, there are important factors that make the driver s occupation a relatively unattractive job, causing a poorly qualified labour supply reflected in a labour shortage. A recent survey carried out by NEA and IRU (IRU 2007) throughout European road freight transport companies concluded that working conditions and work attractiveness play a crucial role in determining driver shortage. In particular, amongst the reasons most cited by respondents for the observed driver shortage are (see Fig.3.4): (i) the job of driver entails extended periods away from home and unpredictable schedules (20% of respondents mention this aspect); (ii) salaries for drivers are too low (17%); (iii) the excessively complex responsibilities, tasks and functions required of professional drivers (15%) Other factors proving significant in the driver shortage are: Lack of qualified professional drivers (22%); reduced possibilities of overtime (due to driving time regulations) (14%); other factors (12%) (IRU September 2007). The survey was carried out by IRU/NEA in August-September 2007, responses were received from the following countries: Belarus, Belgium, Denmark, Estonia, Finland, FYROM, Germany, Hungary, Lithuania, The Netherlands, Norway, Poland, Romania, Spain, Sweden and the United Kingdom. 70

75 Shortage of qualified personnel in road freight transport Figure 3. 4 Reasons for driver shortages Possibilities of overwork for drivers were reduced (regulations changes) (14%) Other reasons (12%) Drivers' salaries are too low (17%) Too complex responsibilities, tasks and functions of professional drivers (15%) Lack of qualified professional drivers (22%) Extended period away from home and unpredictable schedules for drivers (20%) Source: IRU Academy seminar, 2007 The arduous working conditions of the driver s occupation and the unattractiveness of the job are also pointed out by the drivers themselves. Table 3.6 illustrates the perception of the profession of driverin France, based on the 2006 survey conducted by Randstad (1,373 questionnaires in total). From Table 3.6 it emerges that French drivers are conscious of the difficulties and poor career and wage prospects of their occupation. Moreover, it is worth noting that the overall judgment of the profession varies according to the age of the interviewees: the older workers are more critical of the job conditions and prospects than the young workers who have probably joined the sector only recently. Table 3. 6 Perception of the driver s occupation in France AGE Total Interesting Difficult As a vocation Fair remuneration , With career progress prospects A profession of the future Has no career progress prospects Total Source: Randstad,

76 Policy Department B: Structural and Cohesion Policies These judgements are confirmed by another survey conducted in 2007 by the French Département des Etudes et Recherches (AFT-IFTIM Group), which observed that among the main causes accounting for the lack of motivation of the candidates are: arduousness of the job (32%), time constraints (15.7%), low reputation (15.7%), low remuneration (12.4%), conduct issues (10.5%), erosion of the perception of the value of the work (4.6%), training problems (2.6%), contract too short or part-time (2.6%). A recent survey conducted by Skills for Logistics in the United Kingdom 40 evidenced a poor knowledge of the logistic sector and low propensity for the job of driver displayed among students and school leavers. In particular, it emerged that understanding of the term logistics was very weak, with only 36% of the students feeling confident enough to say they knew its meaning. Moreover, only just over half of the respondents would consider a career in the logistics sector: the jobs most appealing to those surveyed appeared to be international shipping agent and warehousing and transport management functions, whereas van and lorry driving were recorded among the least appealing jobs. Driving jobs lorry (HGV) and van - aroused the least interest as a role: nearly two thirds (64% and 76% when considering only female students) of respondents interested in taking a job in logistics said that these were two roles they would not like to do. Furthermore, in this respect it is interesting to note that the students interviewed, when asked about the most important job characteristics in considering a career choice, put on top the three following attributes: (i) the job s career path prospects (87% of respondents), (ii) the new skills acquired, and (iii) the reward in terms of money (around 30% of respondents); instead, working on their own and travelling to new places ranked lowest (only 14%) in their wish list. Image of the occupation The negative image of the road transport industry and in particular, of the occupation of driver, is regarded as one of the main determinants of the scant labour supply. In fact, according to many surveys conducted among drivers and among transport companies it emerges that the image of a lorry driver is often associated by the general public with negative aspects/externalities, such as pollution, traffic and accidents, and the driver s job is considered to be a low-skilled, poorly-paid occupation with poor career prospects. 40 Skills for Logistics, in order to increase the awareness and image of the transport and logistics sector among young people, has conducted a survey on the perception of the sector among students and school leavers during the UK s biggest career event for year-olds that took place at the ExCel centre, London, from 20 to 22 November In particular, 267 responses were gathered during the three-day event. 72

77 Shortage of qualified personnel in road freight transport Box 3. 2 Results from a driver workshop on working conditions 41 A survey among drivers showed that there were four particular areas of complaint: (i) the occupation s image, (ii) personal concerns, (iii) safety, security and working hours, and (iv) training. As regards the image of the occupation, the drivers said that not only do the public see them in a negative light (associating them with pollution, traffic congestion and accidents), but also within the industry itself they are not fully appreciated. Their feedback is not solicited from their own employers, and they do not feel integrated in the supply chain, even though they feel they have much to contribute to the logistics planning process. Chief amongst the personal concerns of drivers are the lack of adequate salaries and the unsocial working hours. On top of that, they feel that there are few opportunities for career advancement and no recognition of any special skills that may have been accumulated. At the Workshop the drivers also described the manifold stresses under which they work as a result of current industry working practices, time constraints and road conditions. On the one hand, the windows of opportunity for loading and unloading are often inflexible while, on the other hand, drivers can be kept waiting by plant inefficiencies, often without information on the cause or likely duration of the delay. Many drivers complained about the lack of adequate instruction and direction and a reluctance to hand over responsibility or encourage initiative. Varying interpretations of European legislation between countries and overzealous security checks add to driver stress levels. On the driver training front, the drivers felt that the level of training was inadequate and insufficient to support newcomers to the profession. Working time and work intensity The working time schedules of the transport sector and work intensity are other factors that contribute to make driving an unattractive occupation. As regards working hours, Table 3.7 shows that average weekly and daily hours tend to be longer in the transport sector than in other sectors: 19% of those employed in the transport sector work more than 48 hours per week (16% in the other sectors) and 46% work more than ten hours per day (36% in the other sectors). Moreover, irregular working hours and unsocial working hours are more frequent among workers of the transport sector than in other sectors: only 53% work the same length of time every day (61% in the other sectors); more than 35% work one or more nights a month (18% in the other sectors); and more than 62% work on Saturdays and/or Sundays (53% in the other sectors). In particular, for long distance drivers this means spending weekends and long periods abroad, which makes driving a hard occupation, difficult to reconcile with normal (and family) life, and risky in terms of long hours of work and spending nights on the road. 41 The driver Workshop was held in Brussels on September 5 and The event was attended by 50 chemical transport company drivers from seven European countries. Source: ECTA (2004), Measuring your Expectations and Shaping our Future. 73

78 Policy Department B: Structural and Cohesion Policies Table 3. 7 Working hours and work-life balance in the transport, storage and communication sector compared to other sectors (values in percentage) Other sectors Transport sector Hours work per week <36 hours per week hours per week >48 hours a week Working one or more nights a month Working one or more evenings a month Working on Saturdays and/or Sundays Working more than ten hours a day Working the same number of hours every day Working the same number of days every week Working shifts Work hours fit in very/fairly well with family and social commitments outside work Source: Adapted from TNO, Road Transport Working Time Directive Self-employed and Night Time Provisions, 2006 Box 3. 3 Unsocial and long working hours in the Netherlands External factors, too, may be responsible for long working hours. Congestion and traffic jams may result in an even earlier start to the working day, to be in time for delivery deadlines. In the crowded western part of the Netherlands, drivers may even start work at 4.00 or 5.00 a.m. in order to avoid the traffic jams. They then wait for the client to arrive to take in the goods. The start time used to be around 7.00 a.m. some years ago. The earlier start, however, does not mean that the drivers are home earlier, since they will come up against the same traffic jams at the end of the working day. This indicates that working hours appear to have been lengthening over the last few decades, not so much with increased driving times as increased waiting times. This may be particularly the case for drivers who deliver goods in densely populated areas (Eurofound 2004). Work intensity and related stress is another issue of concern for drivers and another relevant factor of unattractiveness for this profession. Drivers face increasingly tight delivery schedules that have to fit in with just-in-time operations. This creates more time pressure for drivers and a constant feeling of haste. Just-in-time operations are the result of an evident trend towards higher demand from customers for precision, speed and flexibility in the delivery of goods. Many countries point out the problem of stress because of time pressure triggered by tight deadlines. Furthermore, the EU regulation on driving time (hours) and rest periods produces additional stress on drivers, who have to comply with strict rules associated with inadequate (or safe) parking facilities, traffic jams, etc. Another important source of work pressure and stress, mentioned in the European Foundation for the Improvement of Living and Working Conditions report (Eurofound 2004), is the increasingly competitive environment in which European road transport companies have to operate. In order to survive in a highly competitive environment, 74

79 Shortage of qualified personnel in road freight transport companies have to work more efficiently, provide higher quality services, perform additional tasks and offer features that go well beyond the simple transportation of goods. This extends the range of tasks required of truck drivers: tasks traditionally performed by warehouse or stock managers are now taken over by the drivers themselves (Eurofound 2004). In particular, the total amount of work tends to be high for drivers, since driving time represents only a proportion of total working time for commercial drivers. In fact, they usually have many tasks to perform: organising the transport, loading and unloading the freight, relating with clients, etc. Health-related problems: driver fatigue and physical environment Health and safety are issues of major concern in the freight transport sector (especially for drivers) and contribute to the unattractiveness of driving as an occupation. A literature overview by the World Health Organization (WHO 2005) reveals that transport workers, such as lorry drivers, face a significantly higher risk of numerous diseases and health problems. These include arteriosclerotic heart disease, stomach cancer, lung cancer, bronchitis, emphysema, asthma and coronary heart disease, with variations across subsectors of employment (Krzyzanowski et al. 2005). Driver fatigue and the physical working environment are amongst the main causes of such health problems. Driver fatigue plays a key role in road safety. There is some evidence (Adams-Guppy & Guppy 2003) to suggest that driving fatigue represents a significant element of risk for about 10% of drivers. Moreover, fatigue is a problem especially for truck drivers, since the particular job demands of the long-haul transport industry often interfere with normal rest. Fatigue may be generally defined as the subjectively experienced disinclination to continue performing the task at hand (Brown 1994) and there are several factors which contribute to driver fatigue: long and irregular working hours, night work; road congestion; travelled distance; work pressure. The relation between the level of fatigue or somnolence due to the long working hours of driving has been thoroughly observed and analysed, and is generally considered to be a major cause of road accidents involving truck drivers. However, the causes of fatigue are always a mix of several factors: long working hours and irregular hours and night work. Hamelin (Hamelin 2000) has assessed the interaction of the above-mentioned causes of fatigue, finding that when two or more factors are present, the risk level is at least three times higher than the lowest relative risk value. 75

80 Policy Department B: Structural and Cohesion Policies Box 3. 4 Selected national cases In Finland, accidents produced by fatigue vary between 16% and 19% of the total number of road fatal accidents occurring in the period (Hantula 2000). In the United Kingdom (Maycock 1995) and in Germany (Garo et al. 1997) tiredness was reported to be the cause of 7% and 7.3% of total accidents, respectively. In Belgium, a study carried out by the University of Ghent analysed the incidence of truck drivers falling asleep at the wheel among Flemish drivers (Ghent University 2008). According to the survey s results, more than half of the truckers surveyed suffer from lack of sleep and sleep at least one hour less than necessary. Only one quarter of the drivers questioned stated that they started the working week fully rested. The research concluded that one quarter of the truckers surveyed had an increased tendency to fall asleep behind the wheel. Also road congestion contributes to driver fatigue and produces harmful impacts on drivers health through stress and feelings of frustration. Besides the health risks, such as heart attacks, there is a potential impact on road safety as well. In fact, when drivers get frustrated and angry in congested traffic, they are more prone to drive aggressively and this may entail actions or manoeuvres characteristic of bad driving, such as tailgating or frequent lane changes in an attempt to make up for time lost through congestion, with evident road safety risks. The distance travelled is also a relevant factor contributing to fatigue. Moreover, in the case of long journeys it is generally associated with other causes such as lack of sleep and night driving (Hamelin 2000). Work pressure may cause stress and may lead drivers to take too little time off and skip rest periods, hence incrementing fatigue. According to truck drivers, more autonomy in organising their driving schedule would be crucial to prevent fatigue behind the wheel. The physical environment where freight transport drivers operate contributes to causing health-related problems and injuries at work. Typical negative aspects related to the usual driving work environment are: exposure to noise, vibration, insufficient lighting, atmospheric factors, and air pollution. With regard to noise, exposure may be considered a common problem for all European countries, as it is not only due to the vehicle itself, but also to the traffic and machinery at delivery sites. Vibration is another perceived risk which impacts on the driver s entire body, mainly in terms of back problems when associated with prolonged periods of sitting. In the Nordic countries lighting is reported to be an important factor for preventing workrelated accidents, due to the short daylight during the winter period, together with the occurrence of extremely low temperatures, which negatively affect the physical work environment of drivers working in road transport of goods. For instance, this has a specific impact in terms of musculoskeletal injuries, which are more likely to occur when performing heavy physical loading and unloading activities in a cold environment, after a long period seated in a warm cabin. 76

81 Shortage of qualified personnel in road freight transport Finally, air pollutants and fumes also produce harmful effects on drivers health, since they are a primary cause of respiratory problems, especially when drivers are exposed to fumes performing tasks in poorly ventilated terminals. Atmospheric pollutants (CO 2, NO X, SO X, PM) may cause serious adverse health effects for drivers by affecting the central nervous system or producing cardiovascular effects. Furthermore, since the drivers work tasks in many cases encompass various activities apart from driving (e.g. loading and unloading goods), they are also exposed to risk factors related to various non-driving activities (handling heavy goods; moving in an environment with heavy moving objects like forklifts, or on slippery surfaces, etc.). In this respect, a study conducted in Denmark (Shibuya et al., 2008) casts light on the magnitude and severity of the problem. For Denmark, the study stressed the fact that 92.6% of all accidents recorded among goods transport drivers were not related to traffic: in particular, injuries to ankles/feet/toes accounted for 21.4%, back for 18.2%, and wrists/hands/fingers for another 16.3%. Job turnover A high job turnover may exacerbate the problem of shortage of qualified personnel, since it is detrimental to sector-specific expertise and experience and deters firms from investing in specific training of their employees. In particular, the retention of lorry drivers is critically important for the road freight sector because driving is no longer seen as an attractive occupation, and there are worries about an insufficient supply of new recruits to replace the experienced drivers leaving the industry. In fact, job turnover is likely to rise in the coming years due to retirement of large cohorts of elderly workers (see section 4.2). Although data on job turnover are not easily available, the job turnover of lorry drivers is notoriously high in the long-haul trucking industry (data for the US report truck driver turnover as high as 100%) and especially in large haulage companies. In the European Union the problem of high job turnover is particularly acute for migrant drivers. On the one hand, there is a high turnover in countries subject to emigration (mainly NMS and third countries), drivers leaving their jobs for higher paid jobs in the companies of western countries. On the other hand, there is also a high turnover in the destination countries, since migrant workers are prone to leave one company for another that offers a higher wage and, in most cases, their work-migration plans are on a temporary basis; once they have earned enough they return to their own countries. According to the CEO of the Andreas Andresen transport company (Denmark), which has moved its operational base and resources (drivers and trucks) eastwards to Poland and Lithuania to take advantage of lower wages and because of labour shortages in Denmark, around 45% of their drivers job-hop every year because of wage differences. In particular, he stated that: In our experience, there are huge cultural differences in drivers attitudes towards work, and the loyalty towards Andreas Andresen is very low. They leave very quickly so fast, that you risk being 20 drivers short on Monday morning, because they have quit their job and left for someone else. (European Foundation for the Improvement of Living and Working Conditions, (2008) EMCC case studies-transport and logistics sector: Andreas Andresen, Denmark) 77

82 Policy Department B: Structural and Cohesion Policies Roadside and (un)loading rest facilities In the European Union, and in particular in Central, Mediterranean and Eastern Europe, the lack of rest facilities for professional drivers represents a critical element regarding the unattractiveness of the job 42. According to existing and on-going studies 43, the number of drivers, and in particular international drivers, exposed to assault or threat of assault is increasing. Provision of adequate rest facilities would help prevent such risks. According to the IRU and ETF joint document 44, a carrier who knows that the goods transported will not be stolen and the driver not attacked can work under less stress. Moreover, a driver who can have rest and a good night s sleep will be able to concentrate better on driving with less risk of accidents. Therefore, ensuring that truck drivers are able to stop and rest in safe areas is a key issue, also with respect to compliance with the Regulation on driving time and rest periods. Disadvantages and barriers for women Gender discrimination in access to employment, professional training, pay and working conditions remains common practice in the transport industry. Pregnancy and family status have a strong influence on the hiring and firing decisions of the employer and negatively affect the career prospects of women. In the Europe of the 21 st century it is still the practice for women to be asked to sign an open-date resignation letter as a precondition for getting the job: the date will be added to the paper the moment the worker s pregnancy is discovered (ETF, 2005). A Eurofound study (Eurofound 2004) shows the hardship of combining work with family life in this sector: family-unfriendly working hours and prolonged absence from home, characteristic of the job of a driver, prevent women from taking up this kind of job. A further study carried out by the International Transport Workers Federation (ITF 2008) has identified the most important problems that female workers have to face on the job. For instance, nearly three-quarters of the women surveyed: (i) stated they were primarily concerned about health and safety issues, (ii) reported the employers failure to deal with stress and violent attacks, poor sanitation and the length of time away from home, and (iii) also reported bad behaviour on the part of male colleagues and managers. Moreover, according to Eurofound (Eurofound 2004) the heavy physical workload is a further reason why the profession of driver is still not very attractive to women. In addition, most health and safety activities, whether by government inspectors, employers or trade unions, fail to consider gender differences. Research is largely carried out on men, and the findings are assumed to apply to women as well Interview with Mrs Tilling (ETF), 23 February Danish report drawn up by AHTS in co-operation with ITD,DTL,SID, Insurance and pension, National Working environment, Authority, Ministry of Justice/the crime prevention Board, Ministry of transport and Ministry of Employment on assaults on exports drivers, February 2002 ECMT-IRU study on attacks on international drivers of heavy goods vehicles. IRU and ETF common criteria for rest facilities, Brussels,

83 Shortage of qualified personnel in road freight transport Box 3. 5 Female employment in the transport sector: trends and job barriers 45 The available statistical data show that, despite the difficulties, the presence of women in the transport sector has slightly increased in recent years due to technological progress, the growing demand for transport-related services and the emergence of new sectors and companies (e.g. logistics), as well as a growing interest in attracting female workers because of labour shortage and pressure for flexible work patterns. Figure 3. 5 Proportion of female employment by transport sub-sector in EU-27, years 2001 and Land transport, transport via pipelines (Nace 60) Water transport (Nace 61) Air transport (Nace 62) Supporting and auiliary transport activites (Nace 63) Source: adapted from Figure 4, page 6 of Eurofound,2007, Innovative gender equality measures in the transport industry 45 Source: ETF (2005), The gender dimension in the transport industry in Europe. ETF Action Plan for gender equality , ETF Women s Conference, Mariehamn, 24 May

84 Policy Department B: Structural and Cohesion Policies However, the transport sector appears to be characterised by a number of gender barriers, which result in the unequal treatment of women in relation to their access to employment, professional training, equal pay and working conditions. In particular, the main barriers that discourage women s participation in the transport sector, making it an unattractive industry for female workers, are as follows. Gender discrimination. Unequal treatment in access to employment, professional training, pay and working conditions remain common practice in the transport industry. Pregnancy and family status have a strong influence on the hiring and firing decisions of the employer and negatively affect the career prospects of women working in transport. Reconciliation of family and professional life. Family-unfriendly working hours, unpredictable work shifts and overtime prevent women from taking up certain jobs in transport, particularly jobs involving prolonged absence from home. As a result training opportunities are considerably reduced. The participation of women in trade union life is much more limited due to their double workload (at home and at the workplace), with negative impact on gender equality in the industry. Gender pay gap. Segregation in transport is a factor in maintaining pay gaps. Men are concentrated in technical jobs (regarded as more highly qualified) while women are predominant in administrative and customer service and in atypical jobs (e.g. part-time, fixed-term). Hence, career prospects are better for men than for women. Moreover, in family businesses the women are often unpaid and, as a consequence, without social security and other work-related benefits. Health and safety at work. The majority of jobs with evident risk of occupational accidents and illnesses are male-dominated, which means less chance of a genderdifferentiated approach in health and safety policies or measures. Women are also more exposed to physical hazards through violence. However violence, bullying and harassment go largely underreported and thus persist, with increasing gravity and incidence. Working conditions and working environment. Workplaces that have been traditionally male-dominated will generally fail to offer suitable working conditions and facilities for women despite the growing female presence in certain sectors. Salaries and career prospects Driving is generally not a well-paid job, and pay levels have not kept up with the increase seen in responsibilities and new tasks associated with the job due to developments in the road transport market demand for new and more complex logistics services. This also has qualitative implications, since it has generated higher work- and home-related pressures on drivers (e.g. just-in-time deliveries), which have further contributed to reduction of the already poor attractiveness and image of the driver job. In the road freight sector, while job requirements have continuously increased, the remuneration packages have become less attractive. In 2006, average wages in road freight transport were about 24% lower than the average wages paid in the transport and communication sector as a whole. The wage differential is particularly large in Romania (55% lower than in sector I), Latvia (53%) and Greece (50%) and, in general, in almost all NMSs (more than 30%). 80

85 Shortage of qualified personnel in road freight transport These results are in line with the findings of a recent survey conducted by NEA and IRU (IRU 2007), which reports low wages as one on the main causes of the driver shortage, especially in eastern EU countries (24% of respondents report this as one of the main reasons for driver shortage). Pay and the related income levels of drivers significantly emerge as a problem in almost all European countries (Eurofound 2004). As illustrated in Table 3.8, there are only two EU countries which show higher wages in road freight transport than the average wage of the transport and communication sector: Cyprus (17% higher) and the Netherlands (4% higher). In addition, between 2002 and 2006 wages in road freight transport increased less than those in the whole transport and communication sector in a number of countries. 81

86 Policy Department B: Structural and Cohesion Policies Table 3. 8 Average wage per employee in EU countries in 2006 and percentage annual variation between 2002 and 2006 Country Road Freight Transport Average wage Variation per annum I - Transport, storage and communication Average wage Variation per annum Belgium Bulgaria Czech Republic Denmark Germany Estonia Ireland n.a Greece n.a n.a. Spain France Italy Cyprus Latvia Lithuania Luxembourg Hungary Malta n.a n.a. Netherlands Austria Poland Portugal Romania Slovenia Slovakia Finland Sweden United Kingdom Data refer to year 2004 for IE, 2005 for CY and 2002 for MT. 2 Percentage annual variations have been calculated over the period for CY, and over the period for BE, NL, PL and SE. Data for GR, MT and IE are not available. Source: own elaboration on Eurostat, SBS It is to be pointed out that a direct comparison of wage levels across EU countries is not appropriate because of the differences in purchasing power, tax systems, social security, etc. With regard to contractual aspects, in almost all the countries wages are based on collective agreements. However, there are differences across EU countries in the systems which supplement the standard wage with extra pay related to challenging and dangerous tasks (e.g. to compensate for irregular working hours or the handling of dangerous goods). 82

87 Shortage of qualified personnel in road freight transport According to Eurofound (Eurofound 2004), in Belgium, for instance, the wage may increase by more than 30% with extra pay. Finally, also in this sector women and young workers usually receive lower average wages than the adult male workers. As regards females, research reveals a wage gap between men and women ranging from 20% to 40% (for example in Austria, Luxembourg, Sweden, the United Kingdom). A recent research study by CAS showed that in France, female drivers are paid 17,806, i.e. around 3,400 less than male drivers on average (CAS 2008). Regarding young people, and in particular young workers up to the age of 35, a survey undertaken by the ITF (ITF 2008) has identified the following issues: wages: young workers are often paid less than older workers, and are also more likely than older workers to receive the minimum wage; insecure jobs: jobs undertaken by young people can lack security as they are more likely to be employed on a temporary basis, especially if work is outsourced; trade union rights: many young workers may not be unionised, particularly if they are employed on a casual or temporary basis Qualifications: changing skill needs and competences required As already stressed, labour shortage can be caused by a quality mismatch between the skills required by the companies and the competences offered by the workers. Thus, in order to assess the nature of the shortage of drivers, it is essential to analyse changes in the skills required and identify the new professional skills and competencies required by the industry. In the past, becoming a driver was a sort of last resort for people who had no specific professional skills and could not find a different job. Road freight transport has been traditionally regarded as a sector with a relatively high percentage of unskilled jobs and scant learning opportunities. Even today, the vast majority of professional drivers work solely on the basis of their driving licence. Only very few drivers are obliged by EU legislation to follow specific training and in most of the Member States only 5% to 10% of professional drivers undergo such training, based upon requirements specified in Directive 76/914/EEC (DG Energy and Transport 2003) DG Energy and Transport, Road safety: EU professional drivers finally required to undergo professional training, date 15/09/2003, reference: IP/03/

88 Policy Department B: Structural and Cohesion Policies Box 3. 6 Military service and skills Another determinant of the reduction in driver labour supply has to do with changes affecting military service in EU countries. On the one hand, compulsory military service has in the past prevented the development of a tradition of internal education and training of truck drivers, since people are generally trained in truck driving during military service. On the other hand, abolition of compulsory military service in many EU countries has produced a drastic reduction of men with C, D, and E level driving licences. Years ago, young drivers could be hired directly after their military training during which they had already received the necessary training and truck driving licences. Thus, there is little or no long tradition of internal education and training of truck drivers. (European Foundation for the Improvement of Living and Working Conditions (2008), EMCC case studies-transport and logistics sector: Andreas Andresen, Denmark ). In the past many drivers were supplied by the national military forces. Nowadays, after young people finished their military compulsory period, there is no ready supply of drivers. (ECG Questionnaire 2009). However, since occupational profiles and skills have been closely related to the main trends characterising the transportation industry in the last few years, the occupation of driver is becoming increasingly complex due to technological changes, globalisation, enhanced EU regulation and structural changes in the sector, and it is becoming less accessible to unskilled people. There is a progressive restructuring of the driver s role due to the emergence of new activities and operations to be carried out, and new tools to be used, which require specific and continuous training. Annex F provides an example of the requirements for access to the occupation of goods haulage workers on behalf of third parties in some major European countries See pages

89 Shortage of qualified personnel in road freight transport Box 3. 7 Skills shortage and training in Denmark 48 Need for training. Mr Jessen of ITD emphasises: The demand for education and skills is increasing. At the same time, we have a lack of transport education. The existing education is not well integrated with the needs of the transport and logistics sector and it is not well integrated with the educational system. ITD works with educational institutions, schools and companies in the region to improve the situation. Educational centres do offer education and training for German employees working in Denmark, because such facilities are lacking in Germany and waiting lists are long. Basic qualifications. The research on The competent transport firm (Institut for Transportstudier 2000) concluded that all transport workers in Denmark currently need four qualifications in three to five years, regardless of the function they have. These qualifications relate to: customer service customer knowledge or the ability to understand the customer; IT applications; quality management and quality control; foreign language skills. Drivers also require some formal skills. For instance, Mr Therkelsen of HPT explains how the company cooperates with training institutions in Denmark and Germany: Continued education and vocational training is necessary for all employees. Employees participate in one or two courses every year. We cooperate with the Centre for Transport Training and Education (Transportuddannelsescenteret) in Vejle in southeast Jutland in Denmark we often require our drivers to train in a driving simulator. The simulator works in German, which is a necessary language skill for our drivers. Furthermore, we cooperate with the Chamber of Industry and Commerce (IHK) in Flensburg in northern Germany, which issues certificates for drivers transporting hazardous goods. Therefore, the job profile of a qualified driver, which encompasses extended and diversified tasks and which meets the present haulage company demand (particularly of the larger, well-structured companies), includes the specific competences, skills and aptitudes presented in Table Source: Eurofound (2008), EMCC case studies-transport and logistics sector: Padborg cluster, Denmark. 85

90 Policy Department B: Structural and Cohesion Policies Table 3. 9 Summary of required skills and qualifications Competences Driving and Drivingrelated competencies related to a changing environment (ICT, EU regulation). Commercial and salesrelated competences: drivers often have to perform tasks that were traditionally carried out by warehouse or stock personnel. Safety and goodshandling-related competences (loading/ unloading; warehouse organisation). Skills (and aptitudes) Contract-related skills, allowing drivers to be familiar with the relevant technical terminology. They must have a thorough knowledge of all documents, licences, and authorisations relating to themselves, their vehicles and goods. EU regulation on transport sector, in order to comply with rules governing the sector and reduce or avoid infringements and penalties. IT/technology-related skills, allowing drivers to operate the onboard computer, digital tachographs and related data, planning the best path by using the equipment available, and be familiar with various telecommunications tools. Road-safety-related skills. Drivers must know the factors and behaviours contributing to a guarantee of improved road safety, as well as vehicle and goods security, and safe goods handling (loading/unloading) procedures. Minor maintenance skills for the vehicle and the technological equipment. Managerial skills, in order to play roles and take up functions that in the past were performed by the company s back office. Social skills, required for the driver s relationship with clients in performing front-office tasks, since increasingly often the drivers are the customers sole contacts with the transport organisation. Language skills, such as knowledge of foreign languages can be useful, especially for international transport, to communicate with foreign receivers or with the local authorities that might carry out checks on the goods or vehicles; communicating with different cultures has become necessary as Europe continues to expand and evolve towards one single market. Safety and emergency skills. Drivers must be trained to address complex situations and emergencies relating to the safety, security, checking and commercial aspects of their job. Liability and responsibility with respect to the goods they transport and the equipment of trucks, including GPSs and PDAs for electronic invoicing or order placement. Drivers are increasingly entrusted with highly valuable goods and vehicles since the introduction and increasing use of the so-called travelling warehouses. Source: IRS-TRT elaboration 86

91 Shortage of qualified personnel in road freight transport 4. DRIVER SHORTAGE: DEMAND AND SUPPLY PROSPECTS KEY FINDINGS The current exceptional conditions - the world economy is facing its worst economic downturn in decades - make it a hard exercise to provide reliable forecasts, especially on future economic growth and recovery and on labour demand. As soon as the global economy starts recovering, labour demand in the road freight transport sector is expected to start growing again, although at a slower pace than in the past decade, since the elasticity of road freight transport growth and GDP growth is expected to decrease. On the other hand, the labour supply is expected to diminish due to demographic changes and a shrinking working age population throughout the EU. Thus, increasing the rates of participation in the sector by improving job attractiveness and enhancing labour force qualifications by providing sector-specific training will be the key factors to increase the supply of qualified personnel, and drivers. In the next few years, the imbalance in supply and demand of qualified drivers may be expected to widen again. This will affect skilled professional drivers, resulting more in a qualitative mismatch between demand and supply than a shortage in the number of drivers. The purpose of this Chapter is to present future demand and consider prospects regarding the driver shortage by providing a qualitative analysis of different scenarios likely to occur in the coming years. This study is made in conditions of exceptional uncertainty as the world economy faces its worst economic downturn in decades. Thus, it may be not appropriate to base such assessment on recent historical data, since, in uncertain and fluctuating economic environments, the existing relations between GDP and sector growth and between sector growth and employment, as illustrated in Chapter Three, may be not directly applicable. This is further strengthened by the likely structural changes expected in the economy. In particular, the current economic slowdown in the EU has had a particularly negative impact on road freight transport growth, which is highly sensitive to the economic climate. At present, the limited growth of road freight transport demand has mitigated the driver shortage issue. The beginning of 2009 presages a significant reduction in international road freight traffic. For example, the first figures on road transit at the Brenner pass between Italy and Austria show a 23% decrease as from the same period This trend is also confirmed by the answers given by the sector stakeholders interviewed for the survey. However, according to international experts and stakeholders, it may be argued that as soon as the economy starts recovering the imbalance in supply and demand of drivers could be widening again, all else being equal. The problem will in particular affect skilled professional drivers, resulting more in a qualitative mismatch between demand and supply than a shortage in the number of drivers. 87

92 Policy Department B: Structural and Cohesion Policies In summary, since the demand for drivers is closely related to road freight transport activity, this Chapter addresses the expected developments by illustrating some relevant studies forecasting future trends in transport activity and demand for drivers, and considers future prospects for labour supply and the principal factors that will bear upon it. 4.1 Labour demand: growth and perspectives In order to provide a measure of the labour demand over the next few years, a good proxy is offered by the corresponding trend expected in the demand for transport of goods. For this reason hereafter are presented the transport growth scenarios adopted by the Commission and the possible corresponding growth on the labour side Two model projections of transport activities Two recent model projections have estimated future trends for road transport activities. Although these scenarios were formulated before the current economic downturn, it is, however, worth analysing their forecasts, also because in the medium and long term the economy is likely to recover. The first scenario was formulated based on the SCENES model 49, developed by a consortium led by WSP Policy and Research UK. This is a European-wide multi-modal integrated passenger and freight transport model developed within the European Commission s Fourth Framework Research Programme, and since then used in research and policy studies of DG TREN and other Commission services. To ensure consistency in the projection, transport policy measures which are in place or are likely to be implemented before 2010 are also taken into account. SCENES produces spatial details of transportation flows, as well as projections of activity for all transport and travel categories, including very short distance trips and slow modes. The 2007 update of the energy Baseline scenario starts from projections on economic growth (2.2% on average up to 2030), as well as slightly increasing population up to 2020, with no further increase thereafter. In general, the scenario projects growth in freight transport activity, but with a slower rate of increase than seen with past trends. Road transport playing the dominant part in freight transport activity is projected to continue, as transport of goods by truck offers a significant degree of flexibility (see Figure 4.1). This growth path forecast for freight transport activity does not take into account the impact of the current economic crisis, as the study was developed before the beginning of the economic downturn. A deviation from the path can be envisioned (the broken line in Figure 4.1), assuming a temporary stoppage in transport growth. Since the future evolution of the crisis and its effects on the economy are hard to tell at present, it is impossible to determine if freight transport activity will recover quickly soon after the recession, returning to the previous level forecast by the Commission (on the unbroken line), or if transport activity will start growing at a slower pace (remaining on the broken line or positioning itself in the area between the two lines). 49 European Commission,, DG Energy and Transport, EU-27 Energy Baseline Scenario to Update 2007, 8 April

93 Shortage of qualified personnel in road freight transport Figure 4. 1 Freight transport activity forecast: (based on tkm) Source: DG Energy and Transport, EU-27 Energy Baseline Scenario to Update 2007; TRT elaboration The model forecasts a trend of gradual decoupling of transportation activity from economic growth, since the changing structure of the EU economy towards services combined with the productivity gains in transportation is expected to reduce the elasticity of freight transport growth and GDP growth. During the period 2005 to 2030, the GDP elasticity of freight transport is projected to decrease gradually, first down to 0.92 in , and then further down to 0.72 between 2010 and Similarly, freight activity per unit of GDP is projected to decline from tkm per euro 51 of GDP in 2005 to tkm per euro of GDP in The second scenario, presented in the study of the European Commission reviewing the transport White Paper 52, considers the time horizon until Like the first scenario, ignoring the impact of the economic crisis, it foresees growth in freight transport in general, and in particular the proliferation of truck-based freight transportation to the detriment of rail and inland navigation. The expected growth rate in road freight transport activity is calculated to exceed 50% over 20 years, similar to the growth rate estimated in the previous model. Also, in relative terms, the modal split is projected to remain stable, with road transport being predominant by far among the inland modes (see Table 4.1). 50 European Commission, DG Energy and Transport, EU-27 Energy Baseline Scenario to 2030 Update 2007, April Euro at 2005 value. 52 European Commission, Keep Europe moving Sustainable mobility for our continent, Mid-term review of the European Commission s 2001 transport White Paper,

94 Policy Department B: Structural and Cohesion Policies Table 4. 1 Evolution of modal split in freight transport Mode Road 43% 46% 45% Sea 39% 39% 41% Rail 11% 9% 8% Inland waterways 4% 3% 3% Pipelines 3% 3% 3% Source: European Commission, Keep Europe moving Sustainable mobility for our continent, Mid-term review of the European Commission s 2001 transport White Paper, Prospects for transport growth and employment Figure 4.2 below shows the relation between the growth rate in employment in the road freight transport sector in the years and the growth rate of road transport, calculated in tkm for its hire or reward 53 component alone (therefore excluding the own account component). A positive relation emerges, though statistically it is not very significant (R 2 = ). In particular it is worth observing the following outliers. Hungary shows vigorous growth in transport activity (52.19%) associated with a slightly shrinking labour force (-1.81%); this can be explained by the high growth rate of the persons employed in the sector in the previous years. The Netherlands, Finland and Denmark show a positive employment rate despite the reduction in hire or reward transport activity. Belgium and Luxembourg show a marked reduction in transport activity (-8.54% and 6.44% respectively) while the labour force remains stable. 53 The carriage for remuneration, of persons or goods, on behalf of third parties.(oecd Glossary of statistical terms). 90

95 Shortage of qualified personnel in road freight transport Figure 4. 2 Relation between employment growth rate and transport (hire or reward) growth rate ( ) Freight transport growth, hire or reward (%) 60 LT LV HU 50 R 2 = 0, SI 30 PL SK 20 CZ DE PT 10 SE EE ES UK AT FR LU FI -10 NL BE DK -20 Employment growth in the road freight transport sector (%) Data are not available for Bulgaria, Cyprus, Greece, Ireland, Italy, Malta and Romania. Elaboration of Eurostat data For the countries considered, the ratio between the transport growth rate and the employment growth rate is on average 1.5%, with transport activity increasing by 8.1% and employment by 5.3% between 2004 and Applying this elasticity to the forecasts for the transport sector projected by the models presented in Section 4.1.1, it is possible to derive a baseline growth scenario for driver demand. This exercise should not be considered as a concrete forecast. The economic downturn that Europe is facing makes assumptions more difficult and uncertain, and the figures must therefore be read with caution. Nevertheless, tracing out possible future scenarios can help cast light on possible trends and developments in the driver labour market. 91

96 Policy Department B: Structural and Cohesion Policies Table 4. 2 Baseline scenario for driver demand Expected transport activity growth Employment elasticity in RFT*/transpo rt activity Persons employed in RFT (expected variation) Total employed in RFT (2006) Estimated drivers (2006) Estimated drivers in 2018 Absolute drivers growth Relative variation of drivers % % % * Road Freight Transport. Source: TRT elaboration According to the models illustrated in Section 4.1.1, if the GDP grows by 1.5%, transport demand should grow respectively at a rate of 2.32%, in which case the expected variation in persons employed in the road freight transport sector would rise by 1.53% per year, a rate equivalent to about 30,000 new drivers demanded yearly by the market, implying a total increase of almost 400,000 drivers up to 2018 (see Table 4.2). In order to take a broader view of the possible future trends, it is useful to propose different scenarios foreseeing distinct growth rates for transport activities and presenting a change in the elasticity between transport activity and employment in road freight transport. A total of five scenarios are described. The low transport growth scenario (T1) presents a lower growth rate for transport activity, considering that the economic cycle of the last few years cannot be assumed as a long-term trend since it was influenced by several expansive factors, namely: EU enlargement, production growth, the success of the Euro and economic integration, which contributed to driving the demand for transport and consequently the demand for drivers. The high transport growth scenario (T2) presents a higher growth rate for transport, implicitly assuming rapid economic recovery. The transport reduction scenario (T3) forecasts an unlikely long-term contraction of transport activity following upon the economic downturn. The higher elasticity scenario (E1) and the lower elasticity scenario (E2) present an elasticity increased and decreased respectively by 30% from the baseline. Higher elasticity assumes decreasing labour productivity, while lower elasticity implies increasing productivity. The following Table (4.3) summarises the input and output of each scenario. 92

97 Shortage of qualified personnel in road freight transport Table 4. 3 Different scenarios for driver demand SCENARIO Expected transport activity growth Employment Elasticity in RFT/ transport activity Persons employed in RFT (expected variation) Estimated drivers (2006) Estimated drivers in 2018 Absolute drivers growth Relative variation of drivers T1. LOW TRANSPORT GROWTH T2. HIGH TRANSPORT GROWTH T3. TRANSPORT REDUCTION E1. HIGHER ELASTICITY E2. LOWER ELASTICITY 1.00% % % 3.50% % % -1.00% % % 2.32% % % 2.32% % % Source: TRT elaboration The estimation exercise can be further developed applying the shortage ratio to the estimated drivers in 2018 resulting from the different scenarios. In particular, the shortage ratio by Eurobarometer (3.8%) is assumed as benchmark value, while two further ratios are presented in order to detect the effect of possible intensification of driver shortage (shortage ratio=5%) or, on the other hand, alleviation (shortage ratio=2%). These values were set in the light of the maximum and minimum national shortage ratios provided by Eurobarometer (see Chapter 3.1). Table 4. 4 Estimates of driver shortage in 2018 SCENARIO Benchmark (ratio=3,8%) Low Shortage (ratio=2%) High Shortage (ratio=5%) 1. BASELINE T1. LOW TRANSPORT GROWTH T2. HIGH TRANSPORT GROWTH T3. TRANSPORT REDUCTION n.a. n.a. n.a. E1. HIGHER ELASTICITY E2. LOWER ELASTICITY n.a. = not applicable Source: TRT elaboration Some of the results in the Table above are highlighted. The values in bold represent the most probable values that may be forecast by combining the different growth rates for transport and elasticities with the expected tension of labour supply and demand (measured through the shortage ratio). 93

98 Policy Department B: Structural and Cohesion Policies In detail, the highlighted values were identified with the following reasoning: T1: with transport activity growing at a slower rate, there is likely to be less tension in the labour market, and the shortage should therefore be less severe; T2: with transport activity growing fast the driver shortage may be expected to increase, since the supply needs to adjust rapidly to the demand; therefore, in this case the hypothesis of a high shortage rate (5%) is more likely; T3: with decreasing transport activity, on the contrary, the shortage ratio is inapplicable since it can be assumed that the shortage of drivers can be offset by the decline in the total workforce, at least as far as the quantitative aspect of the problem is concerned (while the qualitative aspect cannot be assessed with this exercise); E1: the higher elasticity scenario is likely to present a higher shortage ratio, because it entails decreasing labour productivity; this scenario is unlikely to occur, since labour productivity historically shows a clear positive trend; E2: the lower elasticity scenario should lead to a smaller shortage ratio, because of the implied increase in labour productivity. 4.2 Labour supply: determinants and prospects The principal factors which will bear on the future supply of personnel and, in particular, of long-distance qualified lorry drivers, are related to: (i) the demographic trends, which will quantitatively affect labour supply in Europe; (ii) working conditions and attractiveness of the occupation, which could determine changes in participation rates in the sector/occupation, and (iii) training and qualification. In the following sections we will deal in detail with each of these factors Demographic trends European demographic changes are posing serious challenges for the sustainability of the economic and financial systems. The European Union is experiencing substantial population ageing resulting from the existing structure of the population, low fertility rates and increasing life expectancy. In the near future the population is expected to become much older, with a marked change in the age structure of both the overall and working age populations (European Commission 2007). Moreover, the European working age population is expected to shrink over the next few decades, as large cohorts of people enter retirement and are replaced by smaller cohorts of young workers. According to Eurostat 54 the population of working age (aged 15-64) will start to decline as of 2010 and, over the whole projection period, it will drop by 15 per cent in the EU. However, the same projections point out that the overall labour force (aged 15 to 71) in the EU-27 is projected to increase by 3.7% from 2007 to 2020, due mainly to the increase in female labour supply, while the male labour force is projected to remain substantially unchanged. (European Commission DG ECFIN 2008) EUROPOP2008 population projection for the period convergence scenario. European Commission DG ECFIN (2008), The 2009 Ageing Report: Underlying Assumptions and Projection Methodologies European Economy (provisional version), pages 18 and

99 Shortage of qualified personnel in road freight transport European policy-makers are already considering ways to address these trends by encouraging the retention of older people in the labour market and increasing the participation rate of women. Moreover, in order to offset the forthcoming decline in the population of working age, immigration from third countries is regarded as necessary. According to the European Commission 56 in the coming decades Europe looks set to rely increasingly on immigration from third countries in order to attenuate demographic change (population ageing; shrinking working-age population) and help balance supply and demand in the labour markets, in particular by addressing labour shortages regarding specific skills (European Commission 2008). Recently, Eurostat has developed population projections according to a convergence scenario 57, which describes the possible future demographic developments assuming that across countries fertility and mortality converge to the forerunners. According to EUROPOP2008 projections, the European male population in the age class (new potential workers to substitute for retiring drivers) is expected to decline significantly over the next decade. In particular, based on the convergence scenario which includes net migration flows from third countries, males in the age class are expected to decline by 7.7 percentage points between 2008 and 2018, and to decline by 14.5 percentage points in the no-migration scenario. (see Figure 4.3). Figure 4. 3 EU-27 population trend and projections 1 for males years old (in millions) WITH migration NO migration 1 Data 2006/07 Population on 1 January. Data 2008/2018 Projected 1 January population according to Eurostat, EUROPOP2008 convergence scenario (2050) with migration and with no migration from third countries. Source: Eurostat, Population Demographic statistics; Eurostat, EUROPOP2008 convergence scenario (2050) As regards the road freight transport sector, the shrinking of the young population coupled with an ageing employed population (as we have already seen, a high percentage of workers in the sector are over 50 years old), will pose serious problems in replacing old drivers exiting the labour market, also due to increased competition across sectors and firms. Unless the attractiveness of the occupation of driver increases (and hence, the propensity of workers to apply for jobs as drivers), a structural reduction of labour supply of EU drivers is expected in the next decade. However, this expected reduction could be partly offset by an increase in the supply of non-eu workers, who, however, are less likely European Commission DG Employment and Social Affairs (2008), Employment in Europe EUROPOP2008 (EUROpean POpulation Projections, base year 2008). 95

100 Policy Department B: Structural and Cohesion Policies to possess the right competences and skills, especially in terms of language skills and knowledge of EU transport regulations. In Table an estimation exercise to forecast the male labour supply change in the transport sector is presented. In particular, two alternative scenarios are presented. These scenarios are based on the 2006 employment structure by age in the transport sector, and on the two EUROPOP2008 male population projections (i) with migration from third countries and (ii) without migration from third countries, and on a set of restrictive assumptions. The scenarios have been calculated on the basis of the percentage distribution by age classes of the employed population in the transport sector 59 in 2006 at EU level: young people (18%), adults (57%) and elderly people (25%). Due to a shrinking young population (as predicted by EUROPOP2008) and assuming that the propensity of young workers to join the transport sector remains the same as in 2006 (plus some other assumptions 60 ), in 2018 the share of workers in age class will be reduced to 15.8 % (15% in the scenario of no migration from third countries), whereas the workers in age class will be represented, in 2018, by the ex-young workers (in 2006) and the adults, who by 2018 will still be in this age class, thus totalling 40.5% workers in both scenarios. The change in the total number of elderly (50-64) workers, between 2006 and 2018, is calculated in a similar manner. For this age group it is interesting to note that the model forecasts a substantial increase in the share of elderly workers (39.4% estimated for 2018), thus evidencing the ageing of the sector workforce. Summing up, on the evidence of this exercise, the labour supply is expected to decrease between 2006 and 2018 by about 4.3% in the first scenario with migration and by about 5.1% in the scenario with no migration. It is evident that migration from third countries could in part alleviate the shortage of drivers in the EU by supplying a new labour force. It is of the utmost importance to stress that these forecasts are strictly quantitative in nature (not accounting for supply in terms of skills) and are based on a series of hypotheses which are purely indicative. In particular, the hypothesis underlying the quantitative supply scenarios consider that the labour demand for different age groups does not change over time, and the assumptions do not take account of new adults or elderly entrants from other sectors (or third countries) or changes in propensity rates to the sector/occupations. Furthermore the model does not consider quality of labour supply a factor of extreme importance in assessing labour shortage, which may arise even in the case of excess supply, because of a mismatch between required skills and competences offered. Finally, these projections do not take account of women. In the future, women s participation in the sector may be expected to grow. The implementation of new technologies gradually replacing manpower makes it possible for women and men equally to take on jobs that traditionally involved heavy physical work See page 91. Unfortunately, figures on road freight transport employment by age are not available at the EU level. Labour demand for different age groups does not vary over time; no exits (or job turnover) within age class maintains constant the number of employed); employment is uniformly distributed in the age group. 96

101 Shortage of qualified personnel in road freight transport Table 4. 5 Male employment distribution by age classes in the transport sector: hypotheses and projections Age group Employment distribution Europop2008 Migration No migration Underlying Hypotheses All age groups Young (18-29) Adult (30-49) Old (50-64) Total employyed % 15.8% 15% 57% 40.5% 40.5% 25% 39.4% 39.4% 100% 95.7% 94.9% Labour demand is constant (=2006) for different age groups and does not change over time. No exits (or job turnover within age class maintains constant the number of employed). Employment is uniformly distributed in the age group. The participation rate of the young population does not change throughout the forecasting period. New entrants are calculated as the product of the share of employment in 2006 (18%) and the EUROPOP 2008 projection: (i) -10% male pop with migration; (ii)-15% male pop with no migration. All young workers hold on to their jobs and enter the adult category (18% pass into this category). No entrance in this age category of workers from other sectors or from third countries. All adult workers hold on to their jobs (as in the hypothesis for the category above). No entry into this category of workers from other sectors or from third countries. Workers retire at age 65. Based on the above-mentioned assumption, the supply of workers should fall from 100 hypothetical drivers to 95.7 and 94.9, respectively in the population scenario with migration and without migration. Source: IRS forecasts based on (i) underlying hypothesis; (ii) Eurostat LFS data on male employment distribution by age classes in 2006 in the EU-27 in the transport services (NACE Divisions 60, 61, 62 and 63); Eurostat- EUROPOP2008 convergence scenario data 97

102 Policy Department B: Structural and Cohesion Policies Working conditions and income levels Labour supply also depends on the decision of individuals to participate in the labour market and apply for a specific sector and occupation. Hence, the labour supply for a specific occupation is closely related to the attractiveness, in terms of working conditions and remuneration, of that occupation. In the previous chapters we have already seen that there are many factors that render the lorry driver s occupation (and particularly of long distance drivers) somewhat unattractive. In fact, according to many surveys 61, the observed labour shortage of drivers is closely related to the unattractiveness of the working conditions of the job, and to the low income levels. From a quantitative point of view, it is impossible (due to a scarcity of detailed data) to estimate just how much working conditions impact on participation decisions (to become a driver). However, in a qualitative perspective we can advance some hypotheses as to which factors (working conditions) will probably influence most participation decisions and, hence, future labour supply. On the basis of an exhaustive review of the literature (employee surveys at national and international level; reports and presentation of industry representatives and social partners) we can identify the most frequently cited factors of unattractiveness of the driver s job, as follows: difficult working schedules (reconciliation of work with normal social life); low wages and salaries (specially for Eastern EU countries); negative public image of the occupation, and more generally, of the sector; career development and job stability; poor facilities at (un)loading sites, roadside rest areas; hard job in terms of health and stress; and for women, gender discrimination and poor gender-oriented facilities and policies in the transport sector. Qualified labour: skills and training Labour shortage can be determined by both quantitative shortage and qualitative insufficiencies. In the latter case, the shortage assumes the form of labour mismatch: the competences and skills demanded by firms differ from those offered by workers. As already discussed in the previous chapters, the technological advances seen in recent years, the significant changes in transport regulations (in terms of numbers and technicality), together with the extension of duties required of drivers have implied an increase in the competences and skills expected of them. 61 IRU,2007; ECTA-CEFIC, 2007; TNO (2006); Claire JAFFLIN, Difficultés de recrutement ou pénurie? Quels facteurs explicatifs?, Colloque-débat du CNT 2 juillet

103 Shortage of qualified personnel in road freight transport The data reveal that in some countries (e.g. Germany - ECTA 2007) the number of unemployed drivers is far larger than the vacancies observed for that occupation, thus supporting the hypothesis of a labour mismatch, rather than a simple quantitative shortage of labour supply. Therefore, the future supply of qualified drivers will rely very much on an increase in the competences and skills possessed by drivers, provided by adequate and specific qualification programmes and ongoing training. 99

104 Policy Department B: Structural and Cohesion Policies 100

105 Shortage of qualified personnel in road freight transport 5. DRIVERS SHORTAGE: MEASURES AT A EUROPEAN LEVEL KEY FINDINGS So far specific and direct measures have not been taken at the EU level to tackle the problem of shortage of qualified personnel in road freight transport, although the European Commission recognises this has become a major problem. However, other measures at the EU level regulations and directives - concerning the transport sector, and more specifically freight transport by road, exert an indirect impact on the shortage of qualified personnel, and particularly of long-distance drivers. Of the recent EU legislation on the road freight transport sector, the regulations that may show greater impact on the shortage of qualified drivers are the Working Time Directive (2002/15/EC), the Regulation on driving times and rest periods (EC 561/2006) and the Directive on the Certificate of Professional Competence (2003/59/EC). However, the size and even the perception (solving versus hampering) of the net impact of those measures on the shortage is controversial and not easily assessable since the legislation may act in increasing both the demand and supply side. Observing the road freight transport sector characteristics and the trends in and particular nature of the shortage, it emerges that the measures designed to solve the problem of shortage of qualified drivers should follow a holistic, coordinated and targeted approach directed at both the demand and supply side, with coherent and coordinated effort at all levels - European, national, local - involving different actors and stakeholders (social partners, transport and education policy-makers). 5.1 Current EU legislation and its impacts on the driver shortage One of the purposes of this study is to evaluate the impacts of EU legislation on the driver shortage. In this respect, certain stakeholders in the EU Member States have been consulted and interviewed, in order to see to what extent EU legislation has impacted on the driver shortage. Comments were asked for on the following items of legislation: Directives 2002/15/EC (Working Time) and 2003/88 (General Working Time Directive); Regulation (EC) 561/2006 and Directive 2006/22 (Driving Times and Rest Periods); Regulation (EC) 2135/98 (Tachograph) as amended by the Regulation (EC) 1360/2002 (Technical specifications for digital tachograph); Directives 96/26 and 98/76/EC (Access to the Market); Regulation (EC) No 484/2002 and Directive 2003/59 (Driver Attestation); Regulation (EEC) 3118/93 (Cabotage 62 ). 62 Road transport performed in one country by a motor vehicle registered in another country. It is considered as international transport because it constitutes export of services from one country to another. 101

106 Policy Department B: Structural and Cohesion Policies The impact was evaluated as neutral for the majority of the EU legislation. A fairly significant impact was found only for the Working Time Directive and the Regulation on Driving Times and Rest Periods, as they set out restrictions on working and driving times which may have an impact on both job attractiveness and flexibility (more time abroad and also weekends, stress in complying with stringent rules especially for international drivers) and in terms of pay (reduced possibilities of overtime) with possible negative repercussions on driver supply. In particular, the Working Time Directive for the road haulage sector is widely acknowledged as the regulation having the most impact. The consultations revealed that the majority of stakeholders regard this Directive as having mixed impacts. On the one hand, the rules are regarded by the majority as having positive effects on health and safety, working conditions and aligning conditions of competition between transport companies, but on the other hand they bring about negative side-effects such as loss of income (due to reduced possibility of overtime), and increased operating costs for companies. In many EU Member States, the most important consequence following the implementation of the Directive is a reduction in employees working hours with no loss in pay, thanks to increased annual holiday entitlement or hourly rates of pay, but in turn this has further exacerbated the need for professional drivers, especially where ongoing recruitment and retention were already a significant problem. Some sector stakeholders have, in fact, pointed out that reducing weekly output per driver would require more drivers, and thus worsen the driver shortage (FTA 2002). 102

107 Shortage of qualified personnel in road freight transport Box 5. 1 Predicted impact of 48-hour limit on wages and labour supply in the EU (Directive 2002/15/EC) About a fifth of the respondents 63 mention negative effects: cost-effectiveness of the sector (20%), loss of salary (22%) or lack of drivers (8%): We have calculated a 15-20% loss of income for the individual driver. If holidays and sickness were not counted in the calculation of the average working time, the gap would not have been so great. (European employer); There will be a loss in income, due to working overtime. But there is no control. The drivers that are being honest are the ones being put in the worst conditions. (employee, Northern Europe); There was a massive public debate, with examples of drivers wives crying on national television about the need to sell the house because their husbands were not able to work as much as they used to. (Ministry, Northern Europe). In some Member States, labour shortage is already being felt or predicted and mentioned as a side effect of the decrease in working hours per employee. More personnel are needed, and difficult to find. Other stakeholders see the new ways of working as a possible opportunity to reach new groups of (potential) employees: The work will have to be done with fewer employees, with a lack of drivers due to the generation gap and young potential drivers going to other countries. (Employers representative, NMS). We expect a massive escape from the sector with the limited pay expected. (employer northern European country). The current shortage of drivers is the main issue: limiting working hours will cause problems and will give competitive advantages to non-eu states. (employer, NMS); The Directive is perceived as a success of the labour unions in some old Member States, which are strong and which do not share the problems the new members of the Eurozone have with shortage of drivers and other problems. (employer, NMS). Source: DG Energy and Transport (2006), Road Transport Working Time Directive. Self-employed and Night Time Provisions Many transport companies have argued that the Working Time Directive has considerably increased their operating costs, particularly when these costs were associated with the high fuel prices registered until July Thus the sector has encountered serious difficulties in offsetting the additional costs associated with the Working Time Directive, and consequently absorbing them within their profit margins. A further problem has emerged, as highlighted by the European Conference of Ministers of Transport (ECMT 2002): in order to gain competitive advantages, some haulage companies were tempted to recruit drivers 63 Interviews conducted in May and June 2006 by TNS NIPO with national ministries, employers representatives or employees representatives in the framework of the study Road Transport Working Time Directive. Self-employed and Night Time Provisions. Government representatives, employers representatives and employees representatives in most EU countries and at the EU-level cooperated in anonymous interviews. 103

108 Policy Department B: Structural and Cohesion Policies from countries where wages are below the EU levels, instead of funding driver training, or reducing unproductive time. This is further confirmed by analysis of the main driving factors influencing freight transport in the next 10 to 20 years carried out on behalf of the European Commission (IWW and TRT 2004, European Commission 2004, SULOGTRA 2002, ASSESS 2005), which shows how transport regulation in the road sector has a high-increase impact on transport costs. Additionally, the Working Time Directive 2002/15/EC was complemented by Regulation 561/2006 on driving times and rest periods, which has led to considerable discussion as to how the road transport industry is to rethink its organisational structure in order to cope with the new requirements. Consequently, this also holds implications for the driver shortage. As already highlighted in the previous sections of this study, the main purpose of the Regulation is to improve driving times and rest periods for professional drivers, and step up checks on lorries. The basic concept is an endeavour to introduce rules that simplify and clarify the previous regulatory framework, thus: (i) easing enforcement controls, (ii) enhancing road safety, and, finally, (iii) harmonising competition, so to ensure a common playing field for operators across the EU Member States. This confirms that the Regulation takes account of the pressures operators have to bear from those contracting them to carry out services, and thus of the fierce competitive pressures and squeeze on costs that represent a dominant and not altogether healthy feature of the road transport market. Although genuinely conceived, the Regulation came up against the presumption prevailing among road operators that its provisions would worsen rather than facilitate their service conditions. In particular, the road operators contest that complying with the Regulation requirements means reduced flexibility, the 56-hour limit on weekly driving time (compared to the previous 90-hour two-weekly limit) no longer enabling drivers to respond to busy weeks while making up for the extra hours the following week. Additionally, the new limit seems to be inconsistent with the current trend in the average transport distances in the European Economic Area, subsequent to EU enlargement, which implies that (i) longer journeys will be organised over two weeks, (ii) and drivers will take more weekly rests away from home. What, then, in the light of these considerations, is the impact on the driver shortage issue? Currently, there is no literature available describing and, more importantly, quantifying the effects of the new Regulation across Europe on this issue. For these reasons the analysis should focus primarily on a qualitative assessment (of the road transport industry s organisational structure). Its structure is clearly affected by the changes required by the Regulation, since less flexibility prevents them from being able to respond to unforeseen situations and organise their working day as circumstances demand (traffic, loading/unloading delays, etc). This problem concerns not only the company, but also the driver s autonomy in managing his/her work according to his/her needs. As a result, on the one hand, companies are worried by the increase in costs, having to hire extra drivers, while, on the other hand, the profession of driver sees its attractiveness further reducing as professional drivers are progressively less tempted to apply. 104

109 Shortage of qualified personnel in road freight transport Similar considerations also apply to the implementation of the digital tachograph, which is the primary tool for recording and controlling driving times and rest periods. Even in the case of the digital tachograph, estimating its impact on the driver shortage is extremely difficult, since it is more associated with the costs borne by the transport companies for their use and management (training costs, administrative costs, etc.). The impact of the digital tachograph may be considered neutral on professional drivers who work alone, apart from a likely restriction of the driver s autonomy, and if there is an effect on the shortage of drivers, this is mostly due to a combination of several causes rather than specifically associated only with the tachograph. Table 5.1 briefly illustrates the estimated financial and administrative impacts related to the implementation and enforcement of the different items of EU legislation in the road transport sector. Once more, the very considerable effects of the EU rules impacting on the social aspects of the profession are worth mentioning, in view not only of the direct costs imposed on the sector, but also of the indirect costs involved in complying with the legal requirements. Table 5. 1 Implementation and enforcement of EU rules: financial and administrative impacts Issue Driving time and rest periods, tachograph - Regulation (EC) 2135/98 - Regulation (EC) 1360/ Directive 2006/22/EC Working time Directive - Directive 2002/15/EC Financial standing - Directive 96/26/EC - Directive 98/76/EC Good repute 64 - Directive 96/26/EC - Directive 98/76/EC Permits - Directive 96/26/EC - Directive 98/76/EC Driver training and professional competences - Directive 96/26/EC - Directive 98/76/EC - Directive 2003/59/EC Financial impact on road transport sector Administrative impact of implementation and enforcement Vehicle taxation Excise duties fuel = very large impact; ++ = substantial impact; + = small impact Source: Elaboration on UEPLAC, Legal requirements for accessing the profession and the market. This requirement is not satisfied, or is no longer satisfied if operators: (i) have been convicted of serious criminal offences, including offences of a commercial nature; (ii) have been declared unfit to pursue the occupation of road transport operator under any rules in force or (iii) have been convicted of serious, repeated offences against the rules in force. 105

110 Policy Department B: Structural and Cohesion Policies Moreover, almost all the stakeholders pointed out problems related to the practice of implementing the working time rules and indicated that the existing system of controls and checks on drivers is weak. This further leads to distortions in competition, putting those who abide by the rules in a disadvantaged position. Other stakeholders have underlined that limitations on night work would mean more daytime road congestion (FFE 2001), and as a consequence, higher levels of greenhouse gas emissions and risk of accidents, thus raising the direct and indirect costs of transport. Off-peak operations would be discouraged, which would result in a rise in external costs of transport and in reduced efficiency of the European infrastructure network. Major concern was also expressed by specific sub-sectors, because of the particular nature of their transport operations. For instance, hauliers carrying timber and livestock have experienced some difficulties in exploiting the flexibility allowed for by the periods of availability (POAs) rules, and they have been forced to employ additional drivers to move the same amount of goods while complying with Directive 2002/15/EC. Two more issues are of particular concern: false self-employed drivers and the lack of harmonised enforcement schemes in the EU Member States. False self-employment arises where the improper classification of employment status is used as a means to evade statutory labour provisions and obligations, and a method to reduce labour costs. It applies to those drivers who have no employment contract, but who should be treated as employed mobile workers insomuch as they do not fully satisfy the criteria of the definition of self-employed. This bogus type of self-employment results in circumvention of social protection and exclusion from basic workers rights. The issue arises since the Working Time Directive 2003/88/EC does not regulate the working time of self-employed persons, being applicable only to employees 65. This undermines the Community rules and jeopardises achievement of the key policy objectives underlying the Directive, as uneven application of the Directive creates distortions in competition between those transport undertakings and drivers who abide by the rules, and therefore bear the corresponding compliance costs, and those who deliberately ignore the rules. In addition, hauliers who disobey the rules jeopardise the health of drivers by wittingly excluding them from the social protection measures provided by the Directive. Table 5. 2 Employed and self-employed drivers (projection 2009, EU-27) Employed drivers 69% Self-employed drivers 31% Source: European Commission, COM(2008)650 The Commission estimated that 50% of the self-employed drivers who work on behalf of large companies are false self-employed (meaning that 15.5% of all the drivers are false self-employed). 65 See Annex A7 at page

111 Shortage of qualified personnel in road freight transport The European Commission carried out a review 66 of the 2002/15 Directive, analysing the predicted impacts of inclusion or exclusion of the self-employed within the scope of Directive 2003/88/EC 67, in particular with regard to implementation and enforcement, as well as added value in terms of road safety and fair competition. The impact assessment concluded that all drivers dependent upon a single employer should enjoy the same level of social protection. This led to a proposal for modification of Working Time Directive 2002/15, with the aim of ensuring that the so-called false self-employed drivers are fully covered by the rules concerning mobile workers by revising the definition of a mobile worker so that there is no room for ambiguity or enforcement loopholes. (European Commission 2008). False self-employed drivers would be brought within the scope of the Directive, by including in the definition of mobile workers those persons that are not formally but de facto tied to an employer, as workers: who do not have the freedom to organise their work, or whose income does not depend directly on the profits made, or who cannot work with several customers. In this respect, transport companies usually agree in calling for the inclusion of selfemployed drivers in the Directive, so as to ensure a level playing field in the sector, as self-employed drivers may have the possibility of working as long as they wish. But the Commission s assessment comes to the conclusion that full coverage of all self-employed mobile workers is unenforceable. They are self-employed entrepreneurs who are free to decide on their working hours. The study argues that the exclusion of the self-employed allows them to maintain their income level, as well as their competitive position within the sector. Applying the Directive s provisions directly to self-employed drivers would have an inevitable impact rendering the profession less financially attractive. Moreover, selfemployed drivers usually work longer hours than employed road transport workers and are more affected by factors contributing to fatigue, such as stress, health problems and lack of support; their inclusion would generate additional stress and administrative workload. Also the EP report 68, drawn up by MEP Marie Panayotopoulos- Cassiotou on behalf of the Committee on Employment and Social Affairs of the EU Parliament, supported the Commission's view that genuine self-employed drivers should not fall under this Directive. However, the above-mentioned European Parliament report 69 has been amended in order to reject 70 the proposal by the EU Commission amending Directive 2002/15/EC, because it did not take into account Parliament's demand for the full inclusion of self-employed drivers. The report rejecting the proposal (with 332 votes in favour, 307 against and 6 abstentions) calls on the Commission to submit a new proposal, during the next legislature, in line with Parliament's demands for the full inclusion of self-employed drivers within the scope of Directive 2002/ European Commission proposal COM(2008)650 of and EC working document COM (2007) 266 of General Working Time Directive. 68 European Parliament, Report A6-0120/2009, 6 March Adopted on 5 May, under the first reading of the codecision procedure, with the Council of Ministers. 70 European Parliament, Press Release, Ref IPR54948, 5 May

112 Policy Department B: Structural and Cohesion Policies Another key problem is the enforcement of Working Time Directive provisions. In fact, enforcement and inspections are regulated by Directive 2006/22/EC, which identifies the minimum level of enforcement required to secure compliance with the rules set out in the Driving Times and Rest Periods and the Tachograph Regulations. Enforcement undoubtedly plays a crucial role because it ensures fair competition in the transport market, road safety and adequate working conditions for professional drivers. However, it must be recognised that the actual state of implementation differs across the Member States. This is a key issue, since it may undermine the overall effectiveness and uniformity of control inspections, as well as the number of checks that can be conducted by the control officers. Moreover, enforcement schemes and interpretation of rules differ across the Member States competent authorities, as there are disproportionate and varying levels of fines for offences. For these reasons, common interpretation and harmonised enforcement of Driving and Rest Time Rules is needed to reduce distortions of competition within the EU as much as possible, as well as the possibility of unintentional infringements and unnecessary fines by international operators and drivers. The European Commission thus advised including a new article on enforcement in its proposal to modify the Working Time Directive 71. Turning to the issue of training, Directive 2003/59/EC introduces the Certificate of Professional Competence (CPC), aiming at encouraging Member States to provide better training for professional drivers, so as to ensure that all professional drivers have harmonised driving and safety standards throughout the drivers entire career. The provision of the Directive will be compulsory from 10 September 2009 (see Art.15.3). The CPC will ensure that training and testing standards are the same for all drivers across the EU, thereby helping drivers find employment in any EU Member State, once they have a Driver CPC. The Driver CPC is expected to bring benefits to the industry both in image and financially, since it provides an opportunity to introduce training that will improve company performance and profits. Nevertheless, some negative effects in terms of driver shortage are expected as well, especially because either the driver or the employer will have to bear the costs of this additional training (ECG, 2009). In this respect, training costs differ across the EU Member States, and may discourage potential new drivers if the burden is too high. Finally, it is worth mentioning the debate surrounding the current review of the Directive 2006/38/EC (Eurovignette Directive), which has stirred controversy among EU Member States, and in particular between those on the periphery of the main freight routes (Portugal, Estonia, Malta) and those suffering most from the high transit and related infrastructure and environmental costs (Austria, France, Germany). The adoption of Eurovignette III has been severely criticised by the European transport industry associations 72, which expressed serious doubts as to whether the proposal would influence road transport patterns and achieve more sustainable transport See footnote n 70. CLECAT, IRU, European Express Association, European Shipper Council (ESC), Joint Industry Position Paper on Eurovignette III - Charging of Heavy Goods Vehicles Proposal, 1 January

113 Shortage of qualified personnel in road freight transport In their view, road freight will only become more expensive, and hauliers (especially SMEs) will be unable to absorb or pass on the extra costs. By eroding the financial capacity of road transport operators to invest in new and cleaner vehicles, intelligent transport systems and training (eco-driving), the external cost charges will risk having an adverse effect on the greening of road transport. However, the European Parliament adopted (with 359 votes in favour, 256 against and 86 abstentions) a legislative resolution amending, under the first reading of the codecision procedure, the proposal for a new directive EP/Council on the charging of heavy goods vehicles for the use of certain infrastructures 73. Table 5. 3 Measure Overview of EU legislation and its impacts on driver shortage Nature of impact Description of the impact Working Time Remedying Better working conditions increase labour supply Directives Hampering Increased needs for drivers Higher costs Driving Times and Rest Periods Remedying Better working conditions increase labour supply Increased safety and work attractiveness Regulation Hampering Increased needs for drivers Higher costs Certificate of Professional Competence Directive Remedying Hampering Increased skills of labour force and life-long training reduce quality mismatch Increased safety Higher entry barriers in the labour market Tachograph Regulation Admission to the occupation Driver Attestation Regulation Indirect Neutral Remedying Related to the enforcement of the Working Time Directive Guaranteed legal work reduces the risk of downward pressure on wages and working conditions Hampering Additional administrative requirement for employing non-eu drivers 5.2 Measures to tackle the problem This section presents a set of measures which could tackle the problem of driver shortage, in particular addressing the quality mismatch between labour supply and demand, which, as previously seen, is the core aspect of the issue. With regard to labour demand, the following measures can be proposed in order to reduce the quantity of drivers needed: increasing labour efficiency; improvements in logistic and organisation management; 73 European Parliament Report A6-0066/2009, adopted on 11 March. 109

114 Policy Department B: Structural and Cohesion Policies increasing use of alternative transport modes (in particular rail and motorways of the sea). Replacing the vehicle fleet with larger and more cost-effective vehicles, and improving the load factor and/or the fuel efficiency, may increase the efficiency of transport operations (e.g. the ongoing proposal of allowing the so-called mega-trucks should at the same time reduce the demand for drivers and require additional training). However, increasing investments in logistics and in the vehicle fleet to gain more efficiency is a realistic option for medium-sized and large transport companies, but it is more difficult for small enterprises and self-employed workers. Thus, the combination of these corrective actions may result in a lower demand for truck drivers, given the same amount of freight to haul. On the supply side, the problem could be tackled by improving the attractiveness of the profession, and by enlarging the base of potential drivers. As indicated in Tables 5.4 and 5.5, possible solutions are as follows: attracting additional labour from non-eu countries; increasing the participation and role of women in the sector; supporting training; improving working conditions; introducing performance-related monetary incentives, which could be implemented not only in terms of hours of work or distance travelled, but also by giving workers prospects of greater involvement in the company objectives and development; applying fair and harmonised enforcement of European legislation. 110

115 Shortage of qualified personnel in road freight transport Table 5. 4 Increasing the supply of drivers Objectives Retaining existing drivers Attracting new drivers Policies Improve working conditions Career development and internal communication Ongoing training Image enhancement of the profession Improve working conditions Targeted information/ recruitment policies Target group Young/adult workers Old workers Young/adult male workers Women Elderly and Unemployed Third countries Specific actions Working conditions; Wages and career perspectives Careers, conditions, learning Working Life-long Links with schools; employment agencies (PES/PRES); armed forces; apprenticeship programmes welfare and work - life balance; Safety and security; gender specific facilities; flexibility of working times Links with employment agencies; Public employment services; VET (Vocational education and training) Bilateral agreements; Migration policies; Specific training on EU transport regulation and languages Actors Enterprises Unions Enterprises Unions EU/National authorities Enterprises Unions National authorities Employment agencies Enterprises Unions EU/National authorities Enterprises Unions Employment agencies Enterprises Unions National authorities At the core of the measures which should be taken to tackle a future shortage of drivers is the primary importance of increasing the qualifications of the labour supply. In fact, as already mentioned, driver shortage is above all a matter of mismatch between the required skills and the competences offered by the workforce. As previously seen, there are several reasons which form the basis of this mismatch, such as labour market imperfections, technical changes and social and regulatory changes. 111

116 Policy Department B: Structural and Cohesion Policies Table 5. 5 Increasing the supply of qualified drivers Objectives Policies Target group Specific actions Actors Re-training existing drivers Training new drivers Apprenticeship Drivers CPC Qualification Vocational training and other educational programmes Existing pool of drivers (employed or unemployed) New entries to the occupation Subsidies for training; Life-long training Subsidies for CPC (certificate of professional competence); VET; apprenticeship programmes Training agencies Enterprises EU/National authorities Training agencies Enterprises EU/National authorities 112

117 Shortage of qualified personnel in road freight transport 6. CONCLUSIONS AND RECOMMENDATIONS Road freight transport, which represents the dominant freight transport mode in almost all EU Member States and which is the largest employer in the transport sector, with about 2.8 million workers employed in 2006, has been characterised over the last years by increasing and widespread problems of shortage of qualified personnel, and particularly of drivers. The exceptional current economic crisis, which has affected all economies and sectors worldwide, has significantly mitigated the problem of driver shortage. However, despite the current temporary alleviation of the problem, the shortage of qualified personnel is still to be considered as a top priority, since it presents structural characteristics which tend to be exacerbated or mitigated by the cyclical trend. In recent years the shortage of qualified drivers in the road freight transport sector has represented a primary issue in many EU countries, and the occupation of driver ranked amongst the top ten jobs that employers were having difficulty in filling. The intensity of the shortage, i.e. the amount of driver vacancies in proportion to the total number of employed professional drivers, has been recorded as particularly high in many EU countries, such as the Netherlands, France, Poland, the Czech Republic, Portugal and Spain. The shortage of drivers observed has been determined mainly by a considerable and steady increase in the demand for freight transport by road and especially of long-distance haulage, although it is also linked to other causes related to the supply side and to a possible mismatch between the competences required by companies and those offered by the labour force. In fact, several other factors, such as the poor working conditions and the relative unattractiveness of the occupation of driver, the negative image of the sector and of drivers, the changing skill needs determined by organisational and regulatory changes in the sector, and the ageing of the workforce in the sector, implying the exit of skilled and experienced workers, can be counted among the main determinants of the observed and future driver shortage. When looking at policies and measures adopted at the EU level to tackle the shortage of drivers, it is to be noted that, apparently, so far no specific measures have been taken to address the problem of lorry drivers skills and road expertise in transport, or in any case no specific measures adopted at the national level have emerged from the study. However, with regard to recent EU legislation on the subject of road transport, there are several items of legislation which have an indirect impact on the shortage of drivers: the Directives on Working Time, the Regulations on Driving Times and Rest Periods and the Digital Tachograph, the Directive introducing the Certificate of Professional Competence (CPC) and the Regulations on admission to the occupation and driver attestation. Nevertheless, the proportions and nature of the impacts (remedying versus hampering the shortage) produced by the EU legislation on the driver shortage are controversial, since specific aspects covered by each of the above-mentioned EU regulations are likely to have contrasting effects on both the demand for and the supply of drivers. For example: 113

118 Policy Department B: Structural and Cohesion Policies The Working Time Directive (2002/15/EC and 2003/88/EC), by introducing rules limiting weekly working time and setting restrictions on night work and rest breaks, may lead to an increase in the supply of drivers due to improved working conditions, but it may also further increase the haulage companies needs for drivers. Similar contrasting effects may be imputed to the Regulations on driving times and rest periods and the digital tachograph. The Directive (2003/59/EC) which introduces the requirement for truck drivers employed by companies established in the EU to possess a Certificate of Professional Competence (certified by initial qualification and also by periodic training) helps reduce the shortage of qualified drivers by increasing the supply of a skilled labour force. However, if not properly supported and facilitated, the requirement of a CPC may represent an entry barrier and restrict the potential supply of drivers. The Regulation (EC 484/2002) on driver attestation, which requires Member States hauliers to provide their non-eu driver employees with an attestation of employment according to the law and regulations of the Member State, contributes to reducing the shortage of qualified drivers, who could otherwise be discouraged from supplying labour due to a downward pressure on wages and a worsening of working conditions. And yet, by introducing additional administrative requirements for employing non-eu drivers, this Regulation may restrict the potential supply. Furthermore, it is worth mentioning the likely consequences of environmental and sustainability policies, which aim at shifting freight transport from road to other means of transport; this may reduce the demand for drivers and hence alleviate the shortage. Given the characteristics of the sector, the nature of the shortage and the existing legislative framework, some recommendations can be proposed in order to address structurally the problem of shortage of qualified drivers and personnel in road freight transport. Reading these proposals, it is to be borne in mind that the driver shortage is essentially a market-related problem that may be solved primarily by the market dynamics of supply and demand. This process may be supported by specific regulatory interventions at either the European or national level, aiming at restoring balance and facilitating the adjustment process needed in the labour market. The institutional approach should be built on the following characteristics: proposed measures should be oriented to stimulate both the demand side and the supply side of the labour market; proposed measures should be consistent across different government levels (European, national and local), according to the principle of subsidiarity and the method of open coordination; proposed measures should be activated by, and coordinated across, the various authorities and stakeholders through cooperation between social partners (trade unions, firms representatives and government authorities) and policy-makers concerned with labour market and educational issues; proposed measures should be targeted at specific groups of workers (e.g. young people, women, migrants); 114

119 Shortage of qualified personnel in road freight transport proposed measures should be oriented towards specific aspects (e.g. quality of working conditions). Within this framework, the main issues that should be targeted to tackle the problem of shortage of qualified personnel in the road freight transport specifically drivers are suggested as follows. Skills and qualifications. Facilitate attainment of professional and specific driving competences, strengthening the link between the educational system and the labour market, by: - creating ad hoc professional and lifelong training programmes; - increasing awareness among young students of occupational and professional career prospects; - improving job matching, exploiting the renewed role of public/private employment services; - introducing and/or stimulating the use of apprenticeship contracts. Image of the sector. Ameliorate the public image of the sector and of the profession of driver by promoting campaigns on the key role played by the transport sector in the economy, as well as providing information on employment prospects to schools, employment services and the media; Working conditions and job attractiveness. Improve working conditions and job attractiveness, by increasing the number of truck parking areas and enhancing their comfort and security, by harmonising regulations and penalties across EU countries (thus reducing stress and sense of criminalisation), and by increasing integration between employers and employees needs and objectives (career prospects, participation in the firm s objectives/decisions); Women s participation. Encourage the access of women to the occupation of driver by promoting gender-oriented measures (in terms of rest facilities and, for contracts, by increasing time flexibility, etc.), and by increasing road safety and rest facilities (secure parking areas) and reducing discrimination; Logistics and organisation. Increase labour efficiency, improve logistics and organisation management, increase the use of alternative transport modes. Finally, as general recommendations, it is also worth stressing the need to enhance the data base on skill shortages in Europe, which means, for instance, producing comparable vacancy statistics, comparable enterprise surveys, and pan-european forecasting. Indeed, this would help further research into the changing nature of the demand for skills and the consequences for the driving profession. 115

120 Policy Department B: Structural and Cohesion Policies 116

121 Shortage of qualified personnel in road freight transport BIBLIOGRAPHY Alvisi C., Zunarelli S., Il governo dell'autotrasporto in Europa, Libreria Bonomo, Bologna, 2006 Association of European Vehicle Logistics, (Eucartrans), Shortage of drivers in the finished vehicle logistics sector, Brussels, Centre d Analyse Stratégique (CAS), Pour une législation durable du transport routier des marchandises Développement, compétitivité économique et emploi, Paris, Centre d Analyse Stratégique (CAS), Pour une législation durable du transport routier des marchandises L acceptabilité sociale des poids lourds, Paris, Centre d Analyse Stratégique (CAS), Pour une législation durable du transport routier des marchandises Les relations et les évolutions sociales, Paris, Centre d Analyse Stratégique (CAS), Pour une législation durable du transport routier des marchandises Transport routier de marchandises et gaz à effet de serre, Paris, Centre for Economic Business research (CEBR), Impact of the Working Time Directive, Road Haulage Association, London, Centre for Economic Business research (CEBR), Recommendations on how to manage driver shortages in European chemical transport, London, 2001.Centro Studi Sistemi di Trasporto (CSST), Aggiornamento al dei costi delle imprese italiane di autotrasporto di cose per conto di terzi raffrontati con quelli di analoghe imprese appartenenti a Germania, Francia, Spagna, Austria, Slovenia, Ungheria, Polonia e Romania, Turin, May Community of European Railways (CER), Information interchange in rail freight. Improving customer service by innovative use of the telematic applications for freight regulation, Brussels, Confederazione Generale Italiana dei Trasporti e della Logistica (CONFETRA), Nota congiunturale sul trasporto merci: periodo di osservazione gennaio-giugno 2008, Rome, Confederazione Generale Italiana dei Trasporti e della Logistica (CONFETRA), Commercio estero e trasporti, Quaderno nr. 3, Rome, Conseil National des Transports (CNT), Bulletin de l Observatoire des politiques et des stratégies de transport en Europe, Numéro 22, Paris, Conseil National des Transports (CNT), Difficultés de recrutement ou pénurie? Quels facteurs explicatifs? - Données relatives au marché du travail dans le transport routier de marchandises et les activités auxiliaires provenant des travaux de l OPTL et de ceux du Département des Etudes et Recherches du Groupe AFT-IFTIM, Paris, Conseil Général des Ponts et Chaussées (CGPC), Démarche Prospective Transports 2050 Elément de réflexion, Paris, Det Norske Veritas NV (DNV), Report for European Commission DG TREN, Study on the impacts of possible European legislation to improve transport security, Antwerp,

122 Policy Department B: Structural and Cohesion Policies ECORYS Transport, Analysis of the impact of oil prices on the socioeconomic situation in the transport sector, Final Report, Rotterdam, European Association of Automobile Manufacturers (ACEA), Monthly Provisional Vehicle Registrations, Commercial Vehicles, 25 March European Association for forwarding, transport, logistic and customs services (CLECAT), Position Paper, The European Voice of Freight Logistics and Customs Representatives, Brussels, European Commission, DG for Economic and Financial Affairs, Interim forecasts , Brussels, European Commission, Commission hearing to discuss ways to help road hauliers affected by crisis, Short term impact of the financial and economic crisis on the road haulage sector, 15 April 2009 European Commission, Communication from the Commission, by 2020 Europe s climate change opportunity, COM(2008)30, Brussels, European Commission, DG Energy and Transport, EU-27 Energy Baseline Scenario to 2030 Update 2007, Brussels, European Commission, Working document of the Commission, Impact assessment accompanying the proposal for a directive of the European Parliament and of the Council amending Directive 2002/15/EC of the European Parliament and of the Council of 11 March 2002 on the organisation of the working time of persons performing mobile road transport activities, COM(2008)650, Brussels, European Commission, Communication from the Commission, The EU's freight transport agenda: Boosting the efficiency, integration and sustainability of freight transport in Europe, COM(2007) 606 final, Brussels, European Commission, Communication from the Commission, Report from the Commission to the Council and the European Parliament on the consequences of the exclusion of self employed drivers from the scope of the Directive 2002/15/EC of the European Parliament and of the Council of 11 March 2002 on the organisation of the working time of persons performing mobile road transport activities, COM(2007) 266 final, Brussels, European Commission, Staff Working Document of the Commission, Impact Assessment of the Communication Keep Europe Moving Sustainable mobility for our continent. Mid-term review of the European Commission s 2001 Transport White Paper, Brussels, European Commission, DG Energy and Transport, Modern logistic solutions for competitiveness and sustainability, Brussels, European Commission, DG Statistical Office of the European Communities (Eurostat), Statistic in focus 8/2009, Trends in road freight transport , Luxembourg, European Commission, DG Statistical Office of the European Communities (Eurostat), Recent migration trends: citizens of EU-27 Member States become ever more mobile while EU remains attractive to non-eu citizens - Issue number 98/2008, Luxembourg, European Commission, DG Statistical Office of the European Communities (Eurostat), Competitiveness in EU road freight transport, Issue number 97/2008, Luxembourg,

123 Shortage of qualified personnel in road freight transport European Commission, DG Statistical Office of the European Communities (Eurostat), Road freight transport by type of goods: 2006, Issue number 66/2008, Luxembourg, European Commission, DG Statistical Office of the European Communities (Eurostat), Statistics in focus, Modal split in the inland transport of the EU, Issue number 35/2008, Luxembourg, European Commission, DG Statistical Office of the European Communities (Eurostat), EU Energy and Transport in figures, Statistical Pocketbook 2007/2008, Luxembourg, European Commission, DG Statistical Office of the European Communities (Eurostat), Panorama of Transport: , Luxembourg, European Commission, DG Statistical Office of the European Communities (Eurostat), Average loads, distances and empty running in road freight transport 2005, Statistic in Focus 117/2007, Luxembourg, European Commission, Communication from the Commission, Keep Europe moving Sustainable mobility for our continent, Mid-term review of the European Commission s 2001 transport White Paper, Brussels, COM(2006)314 final, Brussels, European Commission, Energy and Transport in figures, Brussels, European Commission, Communication from the Commission, White Paper European transport policy for 2010: time to decide, COM(2001) 370 final, Brussels, European Conference of Ministers of Transport (ECMT), Professional competence and training in international road haulage, Paris, European Environmental Agency (EEA), Transport and environment: On the way to a new common policy, EEA Report No. 1/2007, Copenhagen, European Foundation for the Improvement of Living and Working Conditions (Eurofound), Trends and drivers of change in the EU transport and logistics sector: Mapping report, Dublin, European Foundation for the Improvement of Living and Working Conditions (Eurofound), Impact of the working time directive on the collective bargaining in the road transport sector, Dublin, European Foundation for the Improvement of Living and Working Conditions (Eurofound), EU road freight transport sector: Work and employment conditions, Dublin, European Parliament, Committee on Employment and Social Affairs, Report on the proposal for a directive of the European Parliament and of the Council amending Directive 2002/15/EC on the organisation of the working time of persons performing mobile road transport activities, A6-0120/2009, 6 March European Parliament, Press Release, Working time for road transport workers rejected by MEPs, Ref IPR54948, 5 May European Monitoring Centre on Change (EMCC), Trends and drivers of change in the EU transport and logistics sector: Mapping report, Dublin, European Transport Safety Council (ETSC), The role of driver fatigue in commercial road transport crashes, Brussels, April

124 Policy Department B: Structural and Cohesion Policies European Transport Workers Federation, (ETF), The Gender Dimension in the Transport Industry in Europe, Action Plan for gender Equality , Brussels, European Transport Workers Federation (ETF), Managers and professionals, positions and roles in the transport sector, Brussels, European Union Road Federation (ERF), Press Releases, Facing the crisis, 18 March Fédération Nationale des Transports Routiers (FNTR), Communiqué, La crise continue, Paris, 14 April Garo C., et al., The Link between Road Drivers Working Time and Road Safety in the EU, Institut für Arbeitswissenschaft der Universität-GH Kassel, (IfA), final report to GD 7, study, Kassel, Hamelin, P., Les conditions temporelles de travail des conducteurs de poids lourds, résumé des premiers résultats de l enquête INRETS de 1999, Notes de Synthèse du SES, Paris, Hantula, L. (2000), Road Safety Director, Traffic Safety Committee of Insurance Companies (VALT), Finland, 2000 International Road Transport Union (IRU), Resolution to reduce the impact of the economic crisis on road transport, AG/G9360/JHU, Geneva, 3 April International Road Transport Union (IRU), Causes and consequences of the Driver Shortage, Brussels, International Road Transport Union (IRU), Solution to the Driver Shortage, Brussels, International Road Transport Union (IRU), Report of the seminar on Driver Shortage, Brussels, International Transport Workers Federation (ITF), Road Transport Women s Health & Safety Handbook, London, Joint Industry Position Paper on Eurovignette III, Charging of Heavy Goods Vehicles Proposal, 1 January Karis B., Dinwoodie J., Impact of the road transport directive: a survey of road hauliers in the Netherlands, Transport Policy 12 (2005) 79 88, Centre for International Shipping and Logistics, Plymouth, Krzyzanowski M., Kuna-Dibbert B., Schneider J., Health Effects of Transport-related Air Pollution, WHO Regional Office for Europe, Rome, Maycock, G., Driver Sleepiness as a Factor in Car and HGVs Accidents, Transport Research Laboratory (TRL), Crowthorne, Berkshire, NEA, Study on the feasibility of organising a network of secured parking areas for road transport operators on the Trans European Road Network Country studies, Zoetermeer, NEA, Study on admission to the occupation of road transport operator: review of current arrangements in Member States and acceding countries, Zoetermeer, Observatoire prospectif transport et logistique (OPTL), Rapport 2009 de l Observatoire prospectif transport et logistique,

125 Shortage of qualified personnel in road freight transport Organisation for Economic Cooperation and Development (OECD), Infrastructure to 2030: Telecom, land transport, water and electricity, Paris, RebelGroup Advisory, The Impacts of the 2004 Enlargement in the Area of Transport, Study for the European Commission, Rotterdam, Road Safety Authority (RSA), Partial Regulatory Impact Assessment of Directive 2003/59/EC on the initial qualification and periodic retraining of vocational drivers, Ballina, Shibuya H., Cleal B., Lyngby Mikkelsen K., Work Injuries Among Drivers in the Goods-Transport Branch in Denmark, American Journal of Industrial Medicine 51: , Service économie statistiques et prospectives (SESP), Marché du travail et conditions d emploi dans le transport, Paris, SWOV, Road Safety Performance Indicators Country Profiles, Leidschendam, TNO, Road Transport Working Time Directive Self-employed and Night Time Provisions, Report for DG Energy and Transport, Delft, TRT Trasporti e Territorio for JRC-IPTS, ECOTRA - Energy use and COst in freight TRAnsport chains, Final Report, Milano, United Nations Economic Commission for Europe (UNECE), Transport Division, Review of the transport situation and emerging trends in the ECE region, Geneva, 24 February United Nations Economic Commission for Europe (UNECE), Transport Division, Trade and transport facilitation can help in economic crisis, ECE/TRANS/09/P02, Geneva, 24 February United Nations Economic Commission for Europe (UNECE), Transport Challenges in 2009, Presentation of the 71st annual session of the UNECE Inland Transport Committee, Geneva, 23 February Ukrainian-European policy and legal advice centre (UEPLAC), Regulatory impact analysis of introduction of the EU road transport acquis communautaire into the Ukrainian legislation and proposals for road transport policy approximation, 27 May Van Gyes G., High incidence of truck drivers falling asleep at the wheel, Higher Institute for Labour Studies (HIVA), Catholic University of Leuven, Leuven,

126 Policy Department B: Structural and Cohesion Policies 122

127 Shortage of qualified personnel in road freight transport ANNEXES ANNEX A CURRENT EU LEGISLATION ON ROAD TRANSPORT A.1 Directive 2002/15/EC (Organisation of working time in respect of road transport activities) The Directive 2002/15/EC 74 (hereinafter referred as Working Time Directive ) has come into force since March 2005, and is applied to all mobile workers performing road transport activities employed by undertakings established in a Member State, as well as to selfemployed drivers from 23 March This Directive had a considerable impact in many EU countries, because, firstly, it has contributed to reducing working time; secondly, it has raised new topics in the collective bargaining agenda. More precisely, the Directive limits the weekly working time to 48 hours, even if the weekly hours may increase up to a maximum of 60, but with an average of 48 hours over a reference period of a maximum of four months, which may be extended to six months in certain circumstances. Finally, the Directive also entails restrictions on night working and enforces rest breaks. A proposal for modifying the current Directive was prepared and submitted by the European Commission in October The aim is to: clarify Directive 2002/15/EC, in order to guarantee that so-called false selfemployed drivers 76 are fully covered by the rules concerning mobile workers; reinforce controls to ensure a correct application of this legislation; enhance cooperation among Member States; align current night-time provisions with other EU legislation. Currently, Directive 2002/15/EC has been transposed into the legislation of all Member States, which every two years have to brief the European Commission about the progress of implementation of this Directive, indicating the viewpoints of the social partners. An overview of Directive 2002/15/EC is summarised in Table A.1: Directive 2002/15/EC of the European Parliament and of the Council of 11 March 2002 on the organisation of the working time of persons performing mobile road transport activities. Based on a Commission report in 2007 on the consequences of the exclusion of self-employed drivers, it has been decided to submit either a proposal on how self-employed drivers can best be included or a proposal of their exclusion. Otherwise the rules will apply to self-employed drivers from 23 March False self-employment arises where the improper classification of employment status is used as a means to evade statutory labour provisions and obligations, and as a method to reduce labour costs. 123

128 Policy Department B: Structural and Cohesion Policies Table A1. 1 Overview of Directive 2002/15/EC Topic Title Background Main objectives Organisation of working time in respect of road transport activities Directive 2002/15/EC of the European Parliament and of the Council of 11 March 2002 on the organisation of working time of persons performing mobile road transport activities On 15 July 1997 the European Commission adopted a White Paper on sectors and activities excluded from the Working Time Directive [COM(97) 334 final], in which it proposed several approaches designed to protect the health and safety of workers in the sectors excluded from the basic Directive. Following consultations with the social partners, the Commission concluded, in its Communication of 31 March 1998 [SEC(1998) 537 final] that nothing justified treating mobile workers and non-mobile workers in a different way and that therefore the basic principles of the Working Time Directive should apply to all workers. Introducing minimum standards to: (i) protect the health and safety of road workers, (ii) avoid distortions of competition within the Community, and (iii) improve road safety. 124

129 Shortage of qualified personnel in road freight transport A.2 Regulation (EC) 561/2006 (Driving time and rest periods) Regulation (EC) 561/ has been adopted in order to introduce clearer and simpler rules about driving times, breaks and rest periods for professional drivers operating both national and international transport. Indeed, this Regulation has tried to bring effective solutions to the problems that have been experienced in interpreting, applying, enforcing and monitoring the provisions included in Regulation (EEC) 3820/ Moreover, Article 27 of this Regulation made the introduction of digital tachographs mandatory in vehicles put into service for the first time in the European Union from 1 May The basic principle that underlies the Regulation is that, by requiring a regular weekly rest period at least once per two consecutive weeks and a daily rest period, social conditions for drivers and road safety should be improved. In this respect, though with some exceptions, the Regulation specifies that: the daily driving time shall not exceed nine hours, although twice a week it may be extended to ten hours; the total accumulated driving time during any two consecutive weeks shall not exceed 90 hours; after a driving period of 4.5 hours, the driver shall take an uninterrupted break of at least 45 minutes unless he takes a daily rest period; the break may be replaced by a break of at least 15 minutes followed by a break of at least 30 minutes each distributed over the period of 4.5 hours of driving time; drivers shall take daily rest periods (at least 11 hours or two periods made up of an uninterrupted period of three hours with an uninterrupted period of nine hours); drivers shall take weekly rest periods (a rest period of at least 45 hours or, under certain conditions, any period of rest of less than 45 hours which may be shortened to a minimum of 24 hours); driving and resting time rules apply to drivers driving vehicles of more than 3.5 tonnes for the transport of goods or vehicles transporting more than nine persons. Finally, the Regulation also: defines the liability of transport undertakings, in particular keeping data from the digital tachograph and from driver cards at least 12 months; sets out control procedures and sanctions. Table A.2 illustrates the main aspects of the Regulation (EC) 561/ Regulation (EC) No 561/2006 of the European Parliament and of the Council of 15 March 2006 on the harmonisation of certain social legislation relating to road transport and amending Council Regulations (EEC) No 3821/85 and (EC) No 2135/98 and repealing Council Regulation (EEC) No 3820/85. Council Regulation (EEC) No 3821/85 of 20 December 1985 on recording equipment in road transport. 125

130 Policy Department B: Structural and Cohesion Policies Table A2. 1 Overview of Regulation (EC) 561/2006 Topic Title Background Main objectives Driving time in the road transport sector Regulation (EC) No 561/2006 of the European Parliament and of the Council of 15 March 2006 on the harmonisation of certain social legislation relating to road transport and amending Council Regulations (EEC) No 3821/85 and (EC) No 2135/98 and repealing Council Regulation (EEC) No 3820/85 The Regulation aims at improving road safety and working conditions in the road transport sector. To this end, the Regulation adopts provisions which are both simpler and more effective than those in former Regulation (EEC) No 3820/85, which it replaces. Adopting new and simpler provisions concerning driving times for drivers of lorries and buses; Defining the responsibilities of transport undertakings and drivers as well as possible exceptions; Setting provisions on the monitoring and evaluation of the Regulation, and on penalties in the event of infringements. 126

131 Shortage of qualified personnel in road freight transport A.3 Directive 96/26/EC (Admission to the occupation) Directive 96/26/EC 79 has harmonised the EU legislation on admission to the occupation of road transport operator in national and international transport. This Directive has played a key role in enhancing the establishment of a Community transport policy, and in introducing uniform qualitative criteria for (i) mutual recognition of qualifications, (ii) better qualified transport operators, (iii) improvement in quality of service and (iv) road safety. In particular, it has replaced two former Directives: 74/561/EEC on admission to the occupation of road haulage operators and road passenger transport operator respectively in national and international transport operations; 77/796/EEC concerning the mutual recognition of diplomas, certificates and other evidence of formal qualifications for goods haulage operators and road passenger transport operators. These two Directives have repeatedly been amended, and consequently Directive 96/26/EC aims to consolidate the existing provision. In turn, it has been amended by Directive 98/76/EC which has further clarified and extended the main basic qualitative criteria underlying Directive 96/26/EC, i.e.: good repute: infringements are now also related to environmental protection and professional liability; financial standing: 9,000 euro for the first vehicle, 5,000 euro for each additional vehicle; professional competence: content and organisation of training courses have been laid down. Furthermore, the scope of the Directive has been extended to include hauliers with vehicles above 3.5 tonnes maximum authorised weight, while as far as the enforcement area is concerned, there is provision for regular checks at least every five years to ensure that the three above-mentioned qualitative criteria are met. In addition, some transitional provisions have been laid down for Austria, Finland and Sweden. 79 Council Directive 96/26/EC of 29 April 1996 on admission to the occupation of road haulage operator and road passenger operator and mutual recognition of diplomas, certificates and other evidence of formal qualifications intended to facilitate for these operators the right to freedom of establishment in national and international transport operations. 127

132 Policy Department B: Structural and Cohesion Policies Finally, Directives 2004/66/EC 80 and 2006/103/EC 81 amend the text following the 2004 and 2007 enlargements. The Directive has been transposed in all 27 EU Member States national legislation. In Table A.3 a synthesis of the Directive 96/26/EC is provided. Table A3. 1 Overview of Directive 96/25/EC Topic Title Background Main objectives Admission to the occupation Council Directive 96/26/EC of the 29th of April 1996 on admission to the occupation of road haulage operator and road passenger operator and mutual recognition of diplomas, certificates and other evidence of formal qualifications intended to facilitate for these operators the right to freedom of establishment in national and international transport operations The Directive consolidates existing legislation and replaces Directive 74/561/EEC on admission to the occupation of road haulage operators and road passenger transport operator respectively in national and international transport operations (repeatedly amended), and Directive 77/796/EEC concerning the mutual recognition of diplomas, certificates and other evidence of formal qualifications for goods haulage operators and road passenger transport operators (repeatedly amended as well). Harmonising admission to the occupation of road transport operator in national and international transport; Facilitating the effective exercise of the right of establishment of those operators Council Directive 2004/66/EC of 26 April 2004 adapting Directives 1999/45/EC, 2002/83/EC, 2003/37/EC and 2003/59/EC of the European Parliament and of the Council and Council Directives 77/388/EEC, 91/414/EEC, 96/26/EC, 2003/48/EC and 2003/49/EC, in the fields of free movement of goods, freedom to provide services, agriculture, transport policy and taxation, by reason of the accession of the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia. Council Directive 2006/103/EC of 20 November 2006 adapting certain Directives in the field of transport policy, by reason of the accession of Bulgaria and Romania. 128

133 Shortage of qualified personnel in road freight transport A.4 Regulation (EC) 484/2002 (Driver attestation) Regulation (EC) 484/ on driver attestation came into force on 19 March 2003 for the purpose of establishing a uniform driver attestation. Under this Regulation, the driver of a vehicle engaged in the carriage of goods subject to a Community authorisation (as regards international transport) and who is a national of a non-member country employed by a haulier from a Member State should also hold a driver attestation. In other words, according to this Regulation, EU hauliers who employ non-eu drivers have to apply to the Road Haulage (International) Division for a driver attestation form in respect of these drivers to allow them to drive in other EU countries. Thus, the Regulation introduces a uniform Community attestation, which certifies that a driver is employed in the haulier s Member State of establishment, consistently with the laws and regulations applicable in that Member State. The competent authorities of a Member State may withdraw a driver attestation where the holder: has failed to observe the conditions in accordance with which the attestation was issued; has supplied incorrect information in relation to the data required for the issue or renewal of a driver attestation. Table A4. 1 Overview of Regulation (EC) 484/2002 Topic Driver attestation Title Background Regulation (EC) No 484/2002 of the European Parliament and of the Council of 1 March 2002 amending Council Regulations (EEC) No 881/92 and (EEC) No 3118/93 for the purposes of establishing a driver attestation The impossibility of checking whether drivers are legally employed or used outside the territory of the Member State where a haulier is established has given rise to a market in which drivers from third countries are sometimes irregularly used only to carry out the international carriage of goods outside the Member State in which the haulier employing them is established. This Regulation has been designed to tackle such practices. Main objectives Establishing a uniform Community attestation permitting the effective checking of the regularity of the employment status of drivers from third countries employed by hauliers in the Member States engaged in the international carriage of goods. 82 Regulation (EC) No 484/2002 of the European Parliament and of the Council of 1 March 2002 amending Council Regulations (EEC) No 881/92 and (EEC) No 3118/93 for the purposes of establishing a driver attestation. 129

134 Policy Department B: Structural and Cohesion Policies A.5 Directive 2003/59/EC (Certificate of Professional Competence) Linked to this piece of legislation, Directive 2003/59/EC introduces a Driver Certificate of Professional Competence (CPC) across the EU. With some exceptions, and subject to transitional provisions for existing drivers, all professional drivers of lorries and buses must pass an initial CPC test, valid for five years and after that undergo 35 hours of periodic training every five years. The EU has encouraged its Members to provide better training for professional drivers. Many professional drivers in the EU are working without the benefit of training or the opportunity to regularly refresh their skills. As a result the EU introduced Directive 2003/59/EC which makes it compulsory for European Member States to have Driver CPC for all professional bus and truck drivers. The introduction of Driver CPC requires more rigorous testing and continuous training for professional bus drivers from 10 September 2008 and truck drivers from 10 September The holder of a full driving licence for a truck or bus before CPC is introduced will automatically be entitled to a Driver CPC. This is called acquired rights. More precisely, Directive 2003/59/EC requires that from 10 September 2009, each truck driver who is employed by a company established in an EU Member State or who is a national of a Member State will need a CPC in order to be allowed to pursue a driving activity. The overall aim of the Directive is to promote the professional competence of the drivers, with positive implications in terms of: (i) increased road safety; (ii) reduced emissions and fuel consumption; (iii) enhanced profile of the industry; and finally (iv) harmonised training of drivers which may ease worker mobility in the EU market. Moreover, the Directive also lowers the minimum age for driving a truck to 18 years, which is expected to ease the problem of shortage of drivers in Europe. According to the provisions of the Directive, two types of CPC are envisaged: the CPC certifying initial qualification, which is issued to drivers who apply for the first time for a CPC; it requires drivers to pass an official practical and theory test organised under the supervision of their Member State of residence; each Member State can also decide to make previous training mandatory; the CPC certifying periodic training, which is issued to drivers who already hold a CPC certifying initial qualification or are exempted from the requirement to obtain it, after completion of a periodic training on road safety and rationalised fuel consumption. The first of the periodic trainings must be completed within five years (in some cases, Member States were allowed to shorten this period to three years or extend it to seven) after the CPC certifying initial qualification has been issued (or five years after 10 September 2009 for the drivers exempted from the obligation to certify initial qualification). A periodic training must then be completed every five years. 130

135 Shortage of qualified personnel in road freight transport As an exception to the general rule, young drivers can work for a maximum period of three years without holding a CPC, under the condition that they are involved in a national vocational training programme lasting at least six months. 131

136 Policy Department B: Structural and Cohesion Policies A.6 Regulation (EC) 2135/98 (Digital tachograph) Regulation (EC) 2135/98 83 as amended by Regulation (EC) 1360/ (Technical specifications for digital tachograph) is of paramount relevance since it has introduced the digital tachograph and tightened the minimum controls. The Regulation specifies that from 1 May 2006, all newly-registered vehicles in the European Union must be fitted with a digital tachograph. The decision by the Council of Ministers regarding the introduction date was made within the framework of the amendment of the Regulation (3820/85) on driving and resting times. Table A.6.1 illustrates the main aspects of Regulation (EC) 2135/98. Table A6. 1 Overview of Regulation (EC) 2135/98 Topic Title Background Main objectives Driver attestation Regulation (EC) No 2135/98 of 24 September 1998 amending Regulation (EEC) No 3821/85 on recording equipment in road transport and Directive 88/559/EEC concerning the application of Regulations (EEC) No 3820/84 and (EEC) No 3821/85 The Regulation introduces the mandatory use of a new technological device: the digital tachograph. It is an electronic system for recording driving and rest times for drivers and co-drivers of commercial vehicles. Existing tachographs using paper charts are replaced by digital tachograph systems to improve compliance with mandatory driving and rest times Council Regulation (EC) No 2135/98 of 24 September 1998 amending Regulation (EEC) No 3821/85 on recording equipment in road transport and Directive 88/599/EEC concerning the application of Regulations (EEC) No 3820/84 and (EEC) No 3821/85. Commission Regulation (EC) No 1360/2002 of 13 June 2002 adapting for the seventh time to technical progress Council Regulation (EEC) No 3821/85 on recording equipment in road transport (Text with EEA relevance). 132

137 Shortage of qualified personnel in road freight transport A.7 Directive 2003/88/EC (General Working Time Directive) Directive 2003/88/EC 85 lays down minimum requirements designed to protect workers from the adverse effects of working excessive hours, having inadequate rest periods and leave and having to work disruptive working patterns. Mobile workers in road transport are covered by this Directive in those areas where the specific directive 2002/15/EC has no requirements. The General Working Time Directive does not cover self-employed persons. The Directive provides a minimum guarantee of: a maximum average working week (including overtime) of 48 hours; a minimum daily rest period of 11 consecutive hours in every 24; breaks when the working day exceeds six hours; a minimum weekly rest period of 24 hours plus the 11 hours daily rest period in every seven-day period; a minimum of four weeks paid annual leave; night work being restricted to an average of eight hours in any 24-hour period. Currently, Directive 2003/88/EC is being reviewed. The Council and Parliament have to agree the new legislation under the codecision procedure. Table A.7.1 provides a synthesis of the Directive 2003/88/E. Table A7. 1 Overview of Directive 2003/88/EC Title Topic Background Main objectives Organisation of working time in respect of road transport activities Directive 2003/88/EC of the European Parliament and of the Council of 4 November 2003 concerning certain aspects of the organisation of working time The original Directive 93/104/EC, adopted in 1993, was amended in 2000 by Directive 2000/34/EC and the two have now been consolidated into Directive 2003/88/EC. Laying down minimum requirements designed to protect workers from the adverse effects of working excessive hours, having inadequate rest periods and leave and having to work disruptive working patterns 85 Published in the Official Journal of the European Union L 299,

138 Policy Department B: Structural and Cohesion Policies A.8 Directive 2006/22/EC (Enforcement Provisions for Driving Times and Rest Periods) Directive 2006/22/EC 86 identifies the minimum level of enforcement required to secure compliance with the rules set out in the Driving Times and Rest Periods and the Tachograph Regulations. It provides common methods to undertake roadside checks and checks at the premises of undertakings and promotes mechanisms of cooperation between Member States authorities in charge of road transport enforcement. It defines modalities for roadside checks, concerted checks (checks undertaken at the same time by enforcement authorities of two or more Member States, each operating in its own territory) as well as checks at the premises of road transport undertakings. Finally, Directive 2006/22/EC requests Member States to establish systems for the electronic exchange of information. Table A.8.1 illustrates the main aspects of Directive 2006/22/EC. Table A8. 1 Overview of Directive 2006/22/EC Topic Title Background Main objectives Organisation of working time in respect of road transport activities Directive 2006/22/EC of the European Parliament and of the Council of 15 March 2006 on minimum conditions for the implementation of Council Regulations (EEC) 3820/85 and (EEC) 3821/85 concerning social legislation relating to road transport activities and repealing Council Directive 88/599/EEC Supplements the provisions of Regulation (EEC) No 3820/85 on minimum conditions for the implementation of social legislation in relation to road transport activities Laying down minimum requirements designed to ensure proper application of and harmonised approach to the social rules on road transport 86 Published in the Official Journal of the European Union L

139 Shortage of qualified personnel in road freight transport A.9 Directive 2006/38/EC (Eurovignette) In 1993 the EU first presented a directive enabling countries to introduce tolls on motorways in order to finance the cost of infrastructure deterioration caused by heavy road vehicles (Directive 93/89/EEC 87 ). The text was amended in 1999 by Directive 1999/62/EC 88 on the application by Member States of taxes on certain vehicles used for the carriage of goods by road and tolls and charges for the use of certain infrastructures. The Directive covered vehicle taxes, tolls and user charges imposed on vehicles intended for the carriage of goods by road and having a maximum permissible gross laden weight of 12 tonnes or more. However, road charges and tolls on heavy commercial vehicles varied widely across EU Member States, regarding both the amounts charged and the systems used to calculate the levy. Therefore an amendment was proposed in order to establish a harmonised EU framework for charging for heavy goods vehicles on European motorways. The proposal also aimed to extend the previous Directive's scope to more roads, more vehicles and more costs, to meet some of the objectives laid down in the 2001 Transport White Paper: European Transport Policy for 2010: Time to decide, namely: to provide for national toll systems reflecting the external costs of transport, including environmental damage, congestion, and accidents; to finance alternative modes of transport to operate a modal shift of freight away from roads. Directive 2006/38/EC 89 (Eurovignette Directive) was adopted in May It harmonises levy systems vehicle taxes, tolls and charges relating to the use of road infrastructure and establishes fair mechanisms for charging infrastructure costs to hauliers. The main novelty is the introduction of the possibility for individual states to integrate the external costs of road transport into toll prices. These external costs can include congestion costs, environmental pollution, noise, landscape damage, social costs such as health, and indirect accident costs which are not covered by insurance. To be internalised in the charges, the costs have to be proved undeniable. However, due to strong disagreements between Member States and Parliament, this very possibility is de facto excluded until a common methodology for the calculation and internalisation of external costs that can be applied to all modes of transport is agreed. The Commission thus promised to come forward with a calculation method. The Eurovignette also gives Member States extra flexibility on how to levy tolls or charges. In particular, these can now be raised on the entire road network, not just motorways. Moreover, from 2012 onwards the Directive will apply to vehicles weighing Council Directive 93/89/EEC of 25 October 1993 on the application by Member States of taxes on certain vehicles used for the carriage of goods by road and tolls and charges for the use of certain infrastructures. Directive 1999/62/EC of the European Parliament and of the Council of 17 June 1999 on the charging of heavy goods vehicles for the use of certain infrastructures. Directive 2006/38/EC of the European Parliament and of the Council of 17 May 2006 amending Directive 1999/62/EC on the charging of heavy goods vehicles for the use of certain infrastructures (Eurovignette Directive). 135

140 Policy Department B: Structural and Cohesion Policies between 3.5 and 12 tonnes, a significantly lower threshold compared to the previous version (Directive 1999/62/EC). 136

141 Shortage of qualified personnel in road freight transport A.10 Road Package The road package includes three draft regulations defining the conditions governing market access in international freight and coach transport and the conditions for the occupation of road transport operators. The package, inter alia, lays down rules for the operation of national road haulage services by a transport operator not established in the given country (cabotage). On 23 April 2009 the EU Parliament adopted the following resolutions related to road freight transport: European Parliament legislative resolution of 23 April 2009 on the Council common position for adopting a regulation of the European Parliament and of the Council establishing common rules concerning the conditions to be complied with to pursue the occupation of road transport operator and repealing Council Directive 96/26/EC (11783/1//2008 C6-0015/ /0098(COD)); European Parliament legislative resolution of 23 April 2009 on the common position adopted by the Council with a view to the adoption of a regulation of the European Parliament and of the Council on common rules for access to the international road haulage market (recast) (11788/1/2008 C6-0014/ /0099(COD)); European Parliament legislative resolution of 23 April 2009 on the proposal for a directive of the European Parliament and of the Council laying down the framework for the deployment of Intelligent Transport Systems in the field of road transport and for interfaces with other transport modes (COM(2008)0887 C6-0512/ /0263(COD)). Under the amended draft regulation, three cabotage operations in the host Member State are to be allowed within seven days following an international journey. The European Parliament has argued in the past for greater liberalisation of cabotage, above all to reduce the number of journeys made by empty lorries, thereby maximising the benefits for hauliers and limiting the environmental impact. Concerning professional competence, transport company managers and the firms themselves must not have been found guilty of a criminal offence relating to road transport. The regulation defines criteria according to which the withdrawal of good repute must be decided; drug trafficking and human trafficking were added to the list. To prove their competence, transport managers will have to pass a compulsory written test arranged by the Member State authorities. Member States must establish national electronic registers containing information on the firm's finances, place of establishment, staff management and any previous infringements. These registers will be interconnected by the end of 2012 to enable the authorities of the Member States to consult data on a firm based in any other Member State. Also, to put an end to letter-box companies (a firm registers in one Member State but mainly operates in another), a company must be able to show that it is genuinely established in a Member State, by providing the relevant documentation to the authorities and showing where in that State it parks its unused vehicles. With regard to road transport safety, intelligent transport systems (ITS) will be implemented in both passenger and freight transport. Information and communication 137

142 Policy Department B: Structural and Cohesion Policies technologies will be used to make transport safer and cleaner and to reduce traffic congestion. Examples of ITS applications include electronic tolling systems on motorways, GPS and traffic supervision systems and warning systems such as the automatic e-call which alerts emergency services if the driver is unconscious after an accident. The EU Parliament called on the Commission to make a number of improvements to their proposals: to enhance compatibility between ITS systems and ensure compatibility with previous systems; to increase the focus on vulnerable road users (pedestrians, cyclists, motorcyclists, disabled people and people with limited mobility); to ensure respect for data protection and privacy; to clarify liability issues by involving experts and stakeholders. The final part of the road package is a regulation on conditions to be met to pursue the occupation of road transport operator. The aim is to guarantee a high, uniform standard of service throughout the EU and ensure that firms comply with labour regulations and administrative rules in the country where they are based. 138

143 Shortage of qualified personnel in road freight transport ANNEX B SOCIAL ACTORS AT EUROPEAN AND NATIONAL LEVEL B.1. The role of social partners At the EU level, the employers are organised in the International Road Transport Union (IRU) and the employees are represented by the European Transport Workers Federation (ETF). The IRU represents employers (not the self-employed) and its main interest is to facilitate road transport internationally. It has a total of 47 member organisations, which are not restricted to European countries, but may come from all over the world. In the EU Member States, not all employer organisations may become members. This often has to do with competition at national level, (e.g. in France). Within the EU, the IRU has set up liaison committees to deal with EU legislation and there are separate liaison committees for freight and passenger transport. In some cases, people from the two liaison committees work together on expert areas. With respect to freight transport, all European countries are represented. According to the EFILWC report 90, it played an important role in the TIR Convention (TIR = Transport International de Marchandises par la Route), where agreement was reached with customs to facilitate international transport. The TIR agreement was considered a major success. ETF is a pan-european organisation representing 39 countries and 203 trade unions. In most EU countries all the unions are members. It consists of seven fairly autonomous sections, one of which concerns freight transport by road. The ETF is a member of the European Trade Union Confederation (ETUC), the employees representative that coordinates industrial relations at the EU level. The IRU and ETF have established a common basis to discuss certain social issues such as driving and resting time rules; on the other hand, they do not deal with non-social matters like road user charges, eco-point issues and certain technical safety legislation. It emerges from interviews that the employee representatives are willing to broaden the discussion agenda, by including all issues relating to the competitiveness of transport organisations, as they may have a direct impact on the conditions and salaries of employed persons. A general model of how the employer and employee representatives relate to the EU, and their national government, is illustrated below. 90 Ibidem. 139

144 Policy Department B: Structural and Cohesion Policies Employers Political decision-makers Employees IRU < > ETF EU committee institutions National governments IRU national members < > ETF national members Source: Eurofound 2004 The one-way arrows between the employer and employee representatives and the European Commission, as well as those one-way arrows between their national members and the national government, may be too restricted. Mutual discussion between employer and employee organisations at the national sectoral level does take place in the many institutions and organisations in which they both participate. At the EU level, they meet in discussions, but there are no institutions in which they both participate (Eurofound 2004), except the CES. Box B.1 outlines the IRU and ETF joint recommendations regarding the drivers working conditions and training. Box B. 1 IRU and ETF joint recommendations The European social partners have launched a number of joint recommendations on different issues during the last few decades (namely employment and training in logistics, rest facilities etc.). Some of those recommendations are addressed to the European Commission and to the Member States. However, the bulk of the recommendations are addressed to the social partners at the national, regional, and company level, asking them to put those guidelines into practice when discussing job definitions and training, as well as individual assessment of workers competences. In particular, recommendations have dealt with: requests to the European Commission and to the Member States regarding statistics on employment in logistics; recommendations to the European Commission, the Member-States and the national social partners on the implementation of Directive 89/655/EEC concerning the minimum safety and health requirements for the use of equipment involved in the workers activities; filling in a framework of actions for the lifelong development of competences and qualifications to be implemented in logistics. In March 2006, IRU and ETF agreed on a list of criteria to be met for rest facilities in the Member States of the European Union. 140

145 Shortage of qualified personnel in road freight transport At the national level, the social partners play an indirect role in the transposition of EU directives into law and a direct role in the discussion of collective agreements. The function of collective agreements is of particular importance, especially in those countries where social dialogue plays a strong role in the regulation of working conditions. These collective agreements have in some cases had to be revised to bring them in line with the provisions of the EU Directives. In Hungary, for instance, most collective agreements needed to be amended after the country had transposed the directives since the implementing legislation covered a range of areas which had not been regulated for decades. The revised agreements usually adhere closely to the new law. Conversely, the EU regulations have a more significant impact in countries where the sector is not covered by collective agreements and social dialogue does not play a strong role. Such is the case in some of the NMSs, where the majority of people in the road transport sector are not covered by collective agreements. Actually, in some of the NMSs, where social dialogue is not as firmly established as it is in the EU-15, it is found to be wanting in the road transport sector. Such is the case in Lithuania, for instance, where collective bargaining only takes place in companies where the trade unions are strong, as a legacy of the former Soviet rule. In Bulgaria, social dialogue is weak in the road transport sector due to low trade union density and few employer representatives. By contrast, social dialogue is rather stronger in the Latvian road transport sector; this is because the sector is covered by the country s fourth largest trade union and one of the country s biggest employer organisations (Eurofound 2007). Predominantly in the NMSs, and depending on the national social dialogue process, tripartite talks play a role in elaborating working time regulations and other regulations regarding safety, salary, etc. For example, in the Czech Republic, the regulation which transposes the Working Time Directive was discussed at the national tripartite level in the Council of Economic and Social Agreement of the Czech Republic (Rada hospodářská a sociální dohody ČR, RHSD ČR). In Latvia, the social partners and government signed a sectoral-level tripartite agreement on socioeconomic partnership in the road transport sector in June 2006, stipulating the creation of a cooperation council to provide technical assistance in implementing a cooperation agreement for the sector and in preparing a sectoral agreement. Tripartite social dialogue in the road transport sector is also evident in Slovakia, where meetings are held three to four times a year (Eurofound, 2007). Collective bargaining in the road transport sector takes a number of forms, depending on the country and usually in line with the dominant method in the particular country. Sectoral level bargaining (Belgium, Finland, Portugal, Denmark and Italy) and company level bargaining (UK) are the most developed forms of collective bargaining. Thus in some countries bargaining takes place at a mixture of levels. In Germany, for example, bargaining is conducted at the regional and company level, resulting in over 1,000 agreements covering different sections of freight and passenger transport. Similarly, in the Netherlands and Norway, bargaining is done at both the sectoral and company level, although it is predominantly at the sectoral level in Norway. In Poland, a sectoral agreement is in place in road transport, in addition to a range of single-employer agreements. A similar scenario can be seen in Spain, where there are regional sectoral agreements and company agreements are concluded within the framework of these agreements. In Hungary, two sectoral agreements are in place, along with seven multiemployer agreements and 39 single-employer agreements (Eurofound 2007) 141

146 Policy Department B: Structural and Cohesion Policies Box B.2 and Box B.3 provide some examples of the role of the social partners in supporting/amending sector regulation relative to the occupation of driver. Box B. 2 The Tutankamion programme: training for immigrant workers in Italy To address the shortage of qualified personnel (especially immigrant workers), the bilateral council E.bi.tral. (composed of employers and trade union representatives) has since 2008 been experimenting with a training programme for immigrant workers. Jointly with the Egyptian consulate in Milan, E.bi.tral selected a few workers to train in Egypt. At the end of the programme the workers were hired by the E.bi.tral s partner companies. The social partners also promote specific inter-sectoral training funds (named Fondimpresa and FOR.TE). These funds are financed with an obligatory contribution by employers (0.3% of workers gross wages), and an initial investment contribution from the Ministry of Labour and Social Policies. The board of each fund has an equal number of representatives from the employers' organisations and allocates money for local, sectoral and company training plans in some cases also for individuals subsequent to the training plans being positively assessed by the evaluation body. Box B. 3 The case of Italy: Collective agreements depart from the working time directive In Italy the social partners have signed company-level collective agreements departing from the EU Working Time Directive. The objective of the social partners is to calculate the compulsory rest periods within the paid working time. In fact, as the trade unionists underlined 91, the Directive s unintentional effect is to extend time spent away from home without any increase in salary. 91 Interview with Mr Molino and Mr Beretta (Filt Cgil Lombardia), 17 February

147 Shortage of qualified personnel in road freight transport ANNEX C ADDITIONAL TABLES Table C1. 1 Road freight transport (2007) Thousands of tonnes Millions of tkm Millions of vkm Empty transport Millions of vkm Average load (1)(2) % Empty transport (1) BE : BG CZ DK DE EE : IE GR ES FR IT CY LV LT LU HU NL AT PL PT RO SI SK FI SE UK NO (1)= Elaboration of Eurostat data (2)= Millions of tkm / Millions of vkm Source: Eurostat 143

148 Policy Department B: Structural and Cohesion Policies Table C1. 2 Road goods transport by type of operation: National transport (millions tkm) (%) (%) EU 25 EU 15 : : : : : : : : BE BG : : : : : : CZ DK DE EE : : : IE GR : : : ES FR IT e e CY : : LV : : LT : : : LU HU : NL AT PL : : : : PT RO : : : : : : SI : SK : : : FI SE UK e = estimate Eurostat 2009 Source: Eurostat 144

149 Shortage of qualified personnel in road freight transport Table C1. 3 Road goods transport by type of operation: international transport (millions tkm) (%) (%) EU25 : : : : : : : : EU : : : : BE BG : : : : : : CZ DK DE EE : : : IE GR : : : ES FR IT e e CY : : LV : : LT : : : LU HU : NL AT PL : : : : PT RO : : : : : : SI : SK : : : FI SE UK e = estimate Eurostat 2009 Source: Eurostat 145

150 Policy Department B: Structural and Cohesion Policies Table C1. 4 Road goods transport by type of operation: cross-trade (millions tkm) (%) (%) EU EU BE BG : : CZ DK DE EE IE EL ES FR IT : CY : LV LT LU HU NL AT PL PT RO : : SI SK FI SE * UK Source: Eurostat 146

151 Shortage of qualified personnel in road freight transport Table C1. 5 Road goods transport by type of operation: cabotage (millions tkm) (%) (%) EU EU BE BG : : CZ DK DE EE IE EL ES FR IT : CY : LV LT LU HU NL AT PL PT RO : : SI SK FI SE UK Source: Eurostat 147

152 Policy Department B: Structural and Cohesion Policies Table C1. 6 Cabotage penetration rate by country in which cabotage takes place (percentage based on tkm) EU EU BE BG : : : : : : CZ DK DE EE : : : IE GR : : : ES FR IT CY : LV : LT : : LU HU : NL AT PL : : : : PT RO : : : : : : SI : SK : : : FI SE UK Source: Eurostat 148

153 Shortage of qualified personnel in road freight transport Table C1. 7 Road freight transport: millions of vehicle-km per year (%) (%) BE BG : : : : : : CZ DK DE EE : : : IE GR : : : ES FR IT : : CY : : LV : : LT : : : LU HU : NL AT PL : : : : PT RO : : : : : : SI : SK : : : FI SE UK Source: Eurostat 149

154 Policy Department B: Structural and Cohesion Policies Table C1. 8 Number of road goods vehicles (thousands) (%) (%) BE BG : : : : CZ DK : DE (r) (r) EE : : : (e) (e) (e) IE (r) (r) (r) (e) GR : : : : : : : : ES (p) : FR : 0.70 IT : CY LV LT LU HU NL AT (r) (r) (r) PL PT : : : : : : : : RO (r) SI (r) (r) (r) (r) (r) (r) SK FI SE UK : : : (r) : : Source: Eurostat 150

155 Shortage of qualified personnel in road freight transport Table C1. 9 New vehicle registration Light commercial vehicles < 3.5 tonnes Commercial vehicles > 3.5 tonnes; <16 tonnes Change Change % % EU Heavy commercial vehicles > 16 tonnes Change % EU BE BG CZ DK DE EE IE GR ES FR IT CY (1) (1) (1) (1) LV , LT , LU , HU (2) (2) MT (1) (1) (1) (1) NL AT PL PT RO SI SK FI SE UK Source: Eurostat, Transport statistical pocketbook Notes: (1) Heavy commercial vehicles included in previous columns (2) Lorries included in other columns Cyprus: new and used 151

156 Policy Department B: Structural and Cohesion Policies Table C1. 10 Number of persons employed in freight transport by road ( ) EU EU (e) (e) (e) (e) BE : BG CZ DK DE (p) EE IE (p) GR ES FR : IT CY LV (p) (p) LT LU (p) (p) HU MT NL (p) : AT : PL (p) (p) (p) PT (p) RO SI SK FI SE UK (p) (p) NO e: estimated value p: provisional value Source: EUROSTAT 152

157 Shortage of qualified personnel in road freight transport Table C1. 11 Share of women employed in transport services (NACE 60-63), compared with the services average (NACE G, H, I and K), 2005 (in percentage) Transport services Services (NACE G, H, I and K) EU BE CZ DK DE EE IE GR ES FR IT CY LV LT LU HU MT NL AT PL PT SI SK FI SE UK Source: Eurostat, European Union Labour Force Survey 153

158 Policy Department B: Structural and Cohesion Policies Table C1. 12 Share of part-time persons employed in transport services (NACE 60-63), compared with the services average (NACE G, H, I and K), 2005 (in percentage) Transport services Services (NACE G, H, I and K) EU BE CZ DK DE EE IE : : GR ES FR IT CY LV LT : 5.9 LU : 15.0 HU MT NL AT PL PT SI SK : 2.9 FI SE UK Source: Eurostat 154

159 Shortage of qualified personnel in road freight transport Table C1. 13 Evolution of GDP, population and added value ( ) EU27 EU15 NM12 Population (Million) GDP (in 000M 2005) Gross Value Added (in 000M 2005) Population (Million) GDP (in 000M 2005) Gross Value Added (in 000M 2005) Population (Million) GDP (in 000M 2005) Gross Value Added (in 000M 2005) Year % Change Source: DG Energy and Transport, EU-27 Energy Baseline Scenario to Update 2007 Table C1. 14 Final energy demand by the transport sector Year EU27 EU15 NM12 % Change Total Trucks Total Trucks Total Trucks Source: DG Energy and Transport, EU-27 Energy Baseline Scenario to Update

160 Policy Department B: Structural and Cohesion Policies Table C1. 15 Evolution of the transport sector Year EU27 EU15 NM12 % Change Freight transport activity (billions tkm) Trucks Rail Inland navigation Freight activity per unit of GDP (tkm/000 05) Freight transport activity (billions tkm) Trucks Rail Inland navigation Freight activity per unit of GDP (tkm/000 05) Freight transport activity (billions tkm) Trucks Rail Inland navigation Freight activity per unit of GDP (tkm/000 05) Source: DG Energy and Transport, EU-27 Energy Baseline Scenario to Update

161 Shortage of qualified personnel in road freight transport EU 27 EU 25 Table C1. 16 NACE: I Freight transport by road, data by country (2006) Number of enterprises Turnover or gross premiums written Production value Value added at factor cost Gross operating surplus (e) (e) (e) (e) (e) Total purchas es of goods and services (e) Purchases of goods and services purchased for Personnel resale in the costs same condition as received : (e) BE BG CZ DK DE EE IE GR ES FR IT CY LV LT LU HU MT NL AT PL PT RO SI SK FI SE UK NO Source: Eurostat 157

162 Policy Department B: Structural and Cohesion Policies Table C1. 17 NACE: I Freight transport by road, data by country (2006) Wages and Salaries Social security costs Gross investment in tangible goods Number of persons employed Number of unpaid persons employed Number of employees Turnover per person employed Apparent labour productivity (Gross value added per person employed) EU (e) (e) (e) (e) (e) (e) (e) (e) BE BG CZ DK DE EE IE : GR ES FR IT CY LV LT LU HU MT : NL : AT PL PT RO SI SK FI SE UK NO Source: Eurostat 158

163 Shortage of qualified personnel in road freight transport Table C1. 18 NACE: I Freight transport by road, data by country (2006) Wage adjusted labour productivity (Apparent labour productivity by average personnel costs) (%) Gross value added per employee Share of personnel costs in production (%) Average personnel costs (personnel costs per employee, thousands euro) Share of employees in persons employed Growth rate of employmen t (%) Employer s social charges as a percentage of personnel costs Number of persons employed per enterprise EU27 : (e) (e) (e) (e) : (e) 4.80 (e) BE BG : CZ DK DE EE IE : : : : : : : GR : 2.10 ES FR IT CY LV LT LU HU MT NL AT PL PT RO SI : 3.00 SK FI SE UK NO Source: Eurostat 159

164 Policy Department B: Structural and Cohesion Policies Table C1. 19 NACE: I Freight transport by road, data by country (2006) Gross operating rate (%) Value added at factor cost in production value Share of personnel costs in total purchases of goods and services EU27 : (e) (e) Share of gross operating surplus in value added Investment per person employed Investment rate Average number of vehicles per enterprise *** BE BG CZ DK DE EE IE GR ES FR IT CY LV LT LU HU MT NL AT PL PT RO SI SK FI SE UK NO ***Elaboration of Eurostat data Source: Eurostat 160

165 Shortage of qualified personnel in road freight transport Table C1. 20 Road freight transport, by distance class (thousands of tonnes, 2007) 0_LT_50 50_LT_ _LT_ _LT_ _LT_ _LT_ BE : BG : CZ : DK : DE : EE : IE : GR : ES : FR : IT : CY : LV : LT : LU : HU : NL : AT : PL : PT : RO : SI : SK : FI : SE : UK : NO : Source: Eurostat 161

166 Policy Department B: Structural and Cohesion Policies Table C1. 21 Total road goods transport (million tkm) EU 25 : : : : : EU : : BE BG : : : : : : CZ DK DE EE : : : IE GR : : : ES FR (%) IT e e 5.61 CY : : LV : : LT : : : LU HU : NL AT PL : : : : PT RO : : : : : : SI : SK : : : FI SE UK (%) 162

167 Shortage of qualified personnel in road freight transport Table C1. 22 Total road goods transport (million tkm) (continued) (%) (%) AT PL : : : : PT RO : : : : : : SI : SK : : : FI SE UK e = estimate Eurostat Source: Eurostat 163

168 Policy Department B: Structural and Cohesion Policies Table C1. 23 Operating costs comparison: Italy, Germany, France, Spain, Poland Italy Germany France Spain Poland Costs per Km Vehicle purchase Insurance Taxes vehicle on Pneumatic tyre Fuel Euro/litre Maintenanc e Toll charges Driver TOTAL Costs per hour Driver TOTAL Driver cost share Speed limits 33.86% 33.29% 33.46% 35.69% 34.36% 33.33% 39.93% 39.30% 38.97% 31.57% 32.92% 34.49% 25.74% 24.42% 23.01% 50 km/h 55 km/h 55 km/h 50 km/h 50 km/h Source: CSST,

169 Shortage of qualified personnel in road freight transport Table C1. 24 Operating costs comparison: Austria, Hungary, Slovenia, Romania Austria Hungary Slovenia Romania Costs per Km Vehicle purchase Insurance Taxes on vehicle Pneumatic tyre Fuel Euro/litre Maintenanc e Toll charges Driver TOTAL Costs per hour Driver TOTAL Driver cost share 39.76% 36.85% 34.41% 25.50% 26.95% 27.50% 29.92% 30.14% 30.53% 28.84% 26.64% 24.86% Speed limits 50 km/h 50 km/h 50 km/h 50 km/h Source: CSST,

170 Policy Department B: Structural and Cohesion Policies Table C1. 25 Employment incidence of road freight transport on total employment of transport sector and number of persons employed, year (thousand) Country Transport sector (I60-I63) Number of persons employed (000) Freight transport by road Number of persons employed (000) Incidence on transport sector EU Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden United Kingdom Data for IE refers to 2004, data for CY refers to 2005 and data for MT refers to Estimated data since for some EU countries data do not refer to Source: own elaboration on Eurostat, SBS 166

171 Shortage of qualified personnel in the road freight transport Table C1. 26 Employment in road freight transport by employment position, year Country Number of persons employed Employment in Road Freight Transport Number of employees Number of unpaid persons employed Incidence of unpaid over total employed EU Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden United Kingdom Data for IE refers to 2004, data for CY refers to 2005 and data for MT refers to Estimated data since for some EU countries data do not refer to Source: own elaboration on Eurostat, SBS 167

172 Policy Department B: Structural and Cohesion Policies Table C1. 27 Employment in road freight transport by firm size (% composition) and average firm size, year Employment by firm size Country 1 2_9 10_19 20_49 50_249 GE_250 TOTAL Average firm size 2 Austria Belgium Bulgaria Cyprus Czech Republic Denmark** Estonia Finland* France Germany Greece n.a. Hungary Ireland Latvia Lithuania Luxembourg** Netherlands Poland Portugal Romania Slovakia Slovenia Spain United Kingdom Data for IT, MT and SE are not available. Data for SK and DK refer to 2005 and for BE, BG,CY and IE to Average firm size has been calculated as total employment divided by total number of firms. Data refers to 2004 for IE, to 2005 for CY and to 2002 for MT. *Data for FI on micro-firms are not available due to confidentiality reasons. **Data for DK and LU on large firms (250 and over) are not available due to confidentiality reasons. Source: own elaboration on Eurostat, SBS 168

173 Shortage of qualified personnel in the road freight transport ANNEX D COUNTRY FICHES D.1 Belgium Road freight transport measurement (2007) Turnover* millions euro Tonnes transported per year thousands Vehicles *2006 Employment and enterprises (2006) Total persons employed Enterprises Average number of persons employed per enterprise 8.4 Share of persons employed in SMEs * 95% Share of unpaid workers 10.35% Labour cost per employee euro Apparent labour productivity euro Wage-adjusted labour productivity % *2004 Driver shortage evidence Survey IRU, 2007 Shortage of drivers Total transport, tkm, stock of vehicles and persons employed 169

174 Policy Department B: Structural and Cohesion Policies Transport: total, national and international D.2 Czech Republic Road freight transport measurement (2007) Turnover millions euro* Tonnes transported per year thousands Vehicles *2006 Employment and enterprises (2006) Total persons employed Enterprises Average number of persons employed per enterprise 4 Share of persons employed in SMEs * 89% Share of unpaid workers 21.65% Labour cost per employee euro Apparent labour productivity euro Wage-adjusted labour productivity % *

175 Shortage of qualified personnel in the road freight transport Total transport, tkm, stock of vehicles and persons employed Transport: total, national and international D.3 Germany Road freight transport measurement (2007) Turnover* millions euro Tonnes transported per year thousands Vehicles *

176 Policy Department B: Structural and Cohesion Policies Employment and enterprises (2006) Total persons employed Enterprises Average number of persons employed per enterprise Share of persons employed in SMEs * 92.5 % Share of unpaid workers 12.24% Labour cost per employee euro Apparent labour productivity euro Wage-adjusted labour productivity % *2004 Total transport, tkm, stock of vehicles and persons employed Transport: total, national and international 172

177 Shortage of qualified personnel in the road freight transport Operating costs per hour (percentage) GERMANY 11% Driver 5% 33% Vehicle purchase 7% Fuel 2% Insurances 4% Taxes on vehicle Pneumatic tyre 23% 15% Manteinance Toll charges Source: CSST, 28 May 2008 D.4 France Road freight transport measurement (2007) Turnover * Tonnes transported per year millions euro thousands Vehicles * *2006 Employment and enterprises (2006) Total persons employed Enterprises Average number of persons employed per enterprise 8.4 Share of persons employed in SMEs - Share of unpaid workers 3.57% Labour cost per employee euro Apparent labour productivity Wage-adjusted labour productivity % Driver shortage evidence Two different studies have calculated the tension indicator in the truck drivers labour market as the ratio between demand and supply (in %), where 0.33 is considered to be the normal value (meaning one job place offered for every three workers searching) Source: CAS, Source: ANPE DARES* * 173

178 Policy Department B: Structural and Cohesion Policies Total transport, tkm, stock of vehicles and persons employed Transport: total, national and international Operating costs per hour (percentage) Source: CSST, 28 May

179 Shortage of qualified personnel in the road freight transport D.5 Italy Road freight transport measurement (2007) Turnover * millions euro Tonnes transported per year ** thousands Vehicles * *2006 ** 2005 Employment and enterprises (2006) Total persons employed Enterprises Average number of persons employed per enterprise 3.5 Share of persons employed in SMEs * - Share of unpaid workers 37.72% Labour cost per employee euro Apparent labour productivity euro Wage-adjusted labour productivity % *2004 Total transport, tkm, stock of vehicles and persons employed Transport: total, national and international 175

180 Policy Department B: Structural and Cohesion Policies Operating costs per hour (percentage) ITALY 6% Vehicle purchase 7% Driver 8% 0% 6% 21% 34% Fuel Insurances Taxes on vehicle Pneumatic tyre Manteinance Toll charges 18% Source: CSST, 28 May 2008 D.6 The Netherlands Road freight transport measurement (2007) Turnover* millions euro Tonnes transported per year thousands Vehicles *2006 Employment and enterprises (2006) Total persons employed Enterprises Average number of persons employed per enterprise 13.1 Share of persons employed in SMEs * 84.8% Share of unpaid workers - Labour cost per employee euro Apparent labour productivity euro Wage-adjusted labour productivity % *2004 Driver shortage evidence Survey IRU, 2007 Shortage of drivers 176

181 Shortage of qualified personnel in the road freight transport Total transport, tkm, stock of vehicles and persons employed Transport: total, national and international D.7 Poland Road freight transport measurement (2007) Turnover* millions euro Tonnes transported per year thousands Vehicles *

182 Policy Department B: Structural and Cohesion Policies Employment and enterprises (2006) Total persons employed Enterprises Average number of persons employed per enterprise 3 Share of persons employed in SMEs * 96.2% Share of unpaid workers 39.75% Labour cost per employee Apparent labour productivity euro euro Wage-adjusted labour productivity % Driver shortage evidence *2004 Financieel Dagblad, Poolse Vrachtwagenchauffeurs zijn op 12 January 2007 Shortage drivers Total transport, tkm, stock of vehicles and persons employed Transport: total, national and international 178

183 Shortage of qualified personnel in the road freight transport Operating costs per hour (percentage) D.8 Romania Source: CSST, 28 May 2008 Road freight transport measurement (2007) Turnover* Tonnes transported per year millions euro thousands Vehicles *2006 Employment and enterprises (2006) Total persons employed Enterprises Average number of persons employed per enterprise 5 Share of persons employed in SMEs * 88.4% Share of unpaid workers 3.35% Labour cost per employee Apparent labour productivity euro euro Wage-adjusted labour productivity % *

184 Policy Department B: Structural and Cohesion Policies Tkm, stock of vehicles and persons employed Transport: total, national and international Operating costs per hour (percentage) Source: CSST, 28 May

185 Shortage of qualified personnel in the road freight transport D.9 Sweden Road freight transport measurement (2007) Turnover* Tonnes transported per year millions euro thousands Vehicles *2006 Employment and enterprises (2006) Total persons employed Enterprises Average number of persons employed per enterprise 4.8 Share of persons employed in SMEs * - Share of unpaid workers 18.46% Labour cost per employee Apparent labour productivity euro euro Wage-adjusted labour productivity % *2004 Driver shortage evidence Survey TYA, 2008 Shortage of drivers Total transport, tkm, stock of vehicles and persons employed 181

186 Policy Department B: Structural and Cohesion Policies Transport: total, national and international D.10 United Kingdom Road freight transport measurement (2007) Turnover* Tonnes transported per year millions euro thousands Vehicles *2000 Employment and enterprises (2006) Total persons employed Enterprises Average number of persons employed per enterprise 8.7 Share of persons employed in SMEs * 61% Share of unpaid workers 7.32% Labour cost per employee Apparent labour productivity euro euro Wage- adjusted labour productivity % *

187 Shortage of qualified personnel in the road freight transport Total transport, tkm, stock of vehicles and persons employed Transport: total, national and international 183

188 Policy Department B: Structural and Cohesion Policies 184

189 Shortage of qualified personnel in the road freight transport ANNEX E QUESTIONS ON PROFESSIONAL DRIVER SHORTAGE Question 1 Question 2 Which EU countries have been most affected by driver shortage? Does driver shortage affect all transport companies or some types in particular (e.g. small and medium-sized)? Question 3 Is driver shortage a problem that occurs on domestic or international markets, or both? Question 4 Question 5 Question 6 Is driver shortage only a quantitative problem (number of available drivers) or also qualitative (lack of competence)? What in your opinion are the main determinants of driver shortage? Are these causes common to all EU countries or are there significant regional differences? Is driver shortage structural or only tied to the cycle of economic trends? Is driver shortage still a current problem? In your opinion, in the next ten years will the shortage: get much worse, get worse, remain the same, decrease or decrease a lot? Question 7 Question 8 Question 9 Question 10 To what extent has EU legislation (WTD, driving times and rest periods, etc.) had an impact on the driver shortage? Has this impact, if any, been positive or negative? Did the EU enlargement in 2004 and 2007 positively affect the driver shortage? What in your opinion might be the most likely solutions (policies) to tackle the driver shortage? To which domains should these solutions be applied? Do you think that training or other practices bargained by social partners could improve the attractiveness of the profession? What would be the expected impact on the road transport sector in the event of persistent shortage? Would this imply changes in terms of required skills and countries of origin of the manpower? Question 11 Do you have any data on employment broken down by characteristics (gender, age, education, type of contract, etc) at country level for road freight transport? If not, do you have any information about where (e.g. publications, contacts) this data may be gathered? 185

190 Policy Department B: Structural and Cohesion Policies The following stakeholders were consulted: Association of European Vehicle Logistics, (Eucartrans) British International Freight Association (BIFA) Bulgarian Association for Freight Forwarding, Transport and Logistics (NSBS) European Association for Forwarding, Transport, Logistics and Customs services (CLECAT) PATRYCJA KULESZA PETER QUANTRILL POLIXENA KRASTANOVA MARCO SORGETTI European Transport Workers Federation (ETF) Federazione italiana lavoratoridei trasporti, Confederazione italiana del lavoro (FILT-CGIL, ITALY) International Road Transport Union (IRU) CRISTINA TILLING MICHELE AZZOLA CESARE BERETTA GIORGIO CARNICELLA DOMENICO MOLINO NICOLA NICOLOSI DAMIAN VICCARS International Transport Forum (ITF) Vocational training and working environment Council (TYA, SWEDEN) BRENDAN HALLEMAN ELENE SHATBERASHVILI CAJ LUOMA ROBERT DIERKS 186

191 Shortage of qualified personnel in the road freight transport ANNEX F: REQUIREMENTS FOR ACCESS TO THE OCCUPATION OF GOODS HAULAGE OPERATOR ON BEHALF OF THIRD PARTIES IN SOME MAJOR EUROPEAN COUNTRIES Countries and regulatory measures governing access to the occupation Italy Art 1, paragraph 2 of legislative decree no. 395 of 22 December 2000 (characteristics of companies) Art. 1 Law no. 298 of 06 June 1974 (mandatory registration) Articles 1 and 5 Decree of the Ministry of Infrastructure and Transport no. 161 of 28 April 2005 regarding the adjustment and transitional regulations for meeting the requirements of good repute, financial standing, and professional competence provided for by DL no. 395/2000 Indispensable requirements Companies that exercise the occupation of road haulage using exclusively motor vehicles with a total fully-loaded mass not exceeding 1.5 tons are required to register with the Albo nazionale degli autotrasportatori di cose per conto terzi [national register of hire or reward road haulage operators of goods], attesting the requirements of good repute, financial standing, and financial qualifications as detailed below. Good repute: The law does not expressly establish what is to be understood as possession of the good repute requirement. It is thus deemed to be possessed when the conditions for exclusion provided for by law are lacking. Grounds for exclusion include: - declaration of habitual, professional, or tendency towards delinquency; - conviction for non-unintentional offence punishable by detention exceeding two years; - having been definitively penalised for abusive exercise of the occupation of haulage operator; - definitive criminal conviction, as employer, for actions constituting breach of social security or assistance obligations; - declared bankruptcy, except in cases of rehabilitation; - other cases as expressly provided for by law. It is to be borne in mind that haulage companies exercising the occupation of road haulage exclusively with motor vehicles with a total, fully-loaded mass not exceeding 1.5 t. are entered in the register on demonstrating only the good repute requirement. Financial standing: is deemed to be met when: - financial resources are available, of no less than: euro, provided the company has available to it, on any grounds among those permitted by the regulations in force, a motor vehicle equipped for the activity of road haulage; euro, for each supplementary motor vehicle; - for the purposes of verifying that the financial standing is met, the relevant authority as a rule assesses the company s yearly accounts, where they exist; the funds available, including bank liquidity, and the possibility of overdraft and loans; all assets, including properties pledged as guarantee for the company; the costs, including the purchase price or initial payments for vehicles, buildings, plant, equipment, and installations; operating capital. Proof of meeting the financial standing requirement may be provided by certification issued, in the various technical forms, by enterprises performing banking activities. 187

192 Policy Department B: Structural and Cohesion Policies Italy Art 1, paragraph 2 of legislative decree no. 395 of 22 December 2000 (characteristics of companies) Art. 1 Law no. 298 of 06 June 1974 (mandatory registration) Articles 1 and 5 Decree of the Ministry of Infrastructure and Transport no. 161 of 28 April 2005 regarding the adjustment and transitional regulations for meeting the requirements of good repute, financial standing, and professional competence provided for by DL no. 395/2000 Professional competence: According to the new regulations, this consists of possessing knowledge of the subjects indicated, which is ascertained by examination. The subjects are: Elements of civil law; Elements of commercial law; Principles of social law; Principles of tax law; Business and financial management of an undertaking; Access to the market; Technical standards and aspects of operation; Road safety. The candidate has two hours to take each of the examinations; the examination under letter (a) is graded with a maximum score of 60 points; the examination under letter (b) is graded with a maximum score of 40 points. The examination is passed if the candidate is awarded at least 30 points for the examination under letter (a) above, at least 20 points for the examination under letter (b) above, and a total cumulative score in both examinations of at least 60 points. As an exception to the above regulation, the professional suitability requirement is deemed to be met by a person who demonstrates having gained practical, overall, ongoing, and current experience of at least five years in the interest of one or more companies that perform or have performed haulage activity in accordance with the provisions of law, under the condition that the said person passes the examination, for which a reduction from 20 to 16 points for passing the examination as per point (b) above is established, without prejudice to the score normally established for examination (a), and that the cumulative score for both examinations is at least 60 points. The relevant office at the Ministero delle Infrastrutture e dei Trasporti (ministry of infrastructure and transport) is responsible for publishing the general list of questions for the examination as per letter (a), and of the types of exercise for the examination as per letter (b). The examination is open to adults who are not judicially barred and not disqualified, who have fulfilled their educational obligations and passed a course of higher secondary-school instruction, or an examination preparation course held by authorised bodies. The examinations are taken in the province in whose territory the subjects have official residence, except for special cases. The relevant authority issues to persons passing the examination the certificate of professional competence, limited where applicable to the national road transport of goods in accordance with the provisions of law. Belgium Law of 03 May 1999: law adopting EC Dir. 96/26 (regulation on access to the occupation) Royal decree of 07 May : implementing Law of 03 May 1999 (market access requirements) Decree of Ministry of Mobility and Transport of 08 May 2002: implementing Royal decree of 07 May 2002 (regulation of issuance of certifications of professional and financial standing) Possession of licence de transport national : duration: 5 years, subject to good repute requirement Possession of licence de transport communautaire Good repute: moral characteristics, absence of serious criminal convictions, also for crimes committed abroad (in the case of a natural person); payment of fines of no more than 2,000 euro and detention not exceeding 4 months for regulatory violation in the area of goods transport (vehicle safety, rest times, environmental protection, etc.); absence of violations in the area of bankruptcy and of other arrangement proceedings Professional competence: obligatory attendance at ministry course and examination passes in: civil law (general regulation of road haulage contracts and contract types), commercial law (corporate forms and their operation, bankruptcy and other arrangement proceedings), and tax law (regulation of vehicle circulation taxes, infrastructure use taxes, income taxes) and business management strategies (business and financial management of an undertaking, credit securities, financial statements and report, budget preparation, marketing, on-line applications to road transport, etc); regulations governing the exercise of the occupation of road haulage (issuance of licenses, establishment of a haulage company, documents related to vehicles, driver and goods, regulations required for crossing borders, and consequences of violation thereof); regulations governing traffic safety (certificate of qualification to drive motor vehicle, certificate of professional competence, medical certificate of good state of health, circulation restrictions, and prevention of the occurrence of accidents); European Community regulations governing mass, size, and structure of vehicles, registration and check of their technical suitability; combined transport techniques and regulation thereof, regulation of the transport of hazardous goods and of live animals. NB: The examination commission (at least 6 members) cannot include members of the trade associations, or subjects exercising the occupation of haulage operator or involved in the operation of a haulage company. Financial standing: minimum threshold of 9,000 euros for the first owned vehicle + 5,000 euros per additional vehicle + certification of financial standing issued by a Belgian credit institution or insurance company or collective loan company (authorised by the finance ministry). To be renewed at least once during the five years of the licence. The caution money paid is allocated wholly to guaranteeing the company s debts. 92 Under Belgian constitutional law, the executive power is conferred to the King. 188

193 Shortage of qualified personnel in the road freight transport France Government decree no of 30 August 1999 (road goods transport regulations) Interministerial decree of 17 November 1999 (issuance of professional competence certificate) Interministerial decree of 18 November 1999 (financial standing) Germany Guterkraftverkehrsgesetz (GuKG) and Berufszugangsverordnung fur den Guterkraftverkehrs (GBZugV) implementing EC Dir. 96/26 and subsequent modifications Implementation of the two regulatory acts (GuKG, GBZugV) is charged to the individual Lander Entry in the haulage operators register: subject to meeting the requirements of professional good repute, financial standing, and professional competence Professional good repute: no convictions of the company s managers for violations of the transport, labour, or road safety regulations Financial standing: 9000 euro for each vehicle that does not exceed a weight of 3.5 tons; for those that exceed 3.5 tons, 9000 euro for the first euro for each of the following ones. In the overseas départements, these values fall to 6000 euro, 6000 euro, and 3000 euro respectively. The amount of the guarantees cannot exceed one half of the value of the required financial standing (towards these ends, vehicles owned by the company, those purchased through leasing, and those that are rented, are counted; vehicles rented out by the company are not counted). These requirements must be met at any time during the life of the individual company. Professional competence: to be held by the natural person who permanently and effectively ensures the management of the company s transport activity. (a) For companies that use vehicles of a maximum authorised weight exceeding 3.5 tons: qualification certificate to be earned in a written examination (civil law, commercial law, corporate law, tax law, business and financial management of an undertaking, regulation of access to the market, industry technical regulations and road safety), or through occupational experience (management-level role for at least 5 years in a transport company, ceasing no more than 3 years earlier) + specific internships, where applicable, or through higher-level or technical teaching implying good knowledge of the subjects established for the examination + specific internships, where applicable; (b) For companies that use vehicles of a maximum authorised weight of less than 3.5 tons: qualification justification: diploma or test verifying knowledge in the area of transport, labour, and safety management and regulation, following a mandatory internship organized by a training body qualified by the region s prefect. For domestic transport: National authorisation or European Community Licence (EEC Reg. 881/92) For international transport: European Community Licence (EEC Reg. 881/92) if headed to Member States of the EU or the Swiss Confederation; ECMT Permit (ECMT resolution of 14 June 1973) if the destination coincides with a State belonging to the Conference; authorisation of destination State in other cases. For all: certification of technical, safety, and environmental requirements National authorisation: Valid for 5 years, is issued to companies with main office in Germany, under conditions of: reliability of the entrepreneur or of the director of the goods transport department (guarantee that the company will be managed in compliance with the law and that the activity will entail no damage or danger); solvency guarantee of the company (availability of financial means for ordinary management of the company, with particular reference to transport safety ); the competence of the entrepreneur or director of the goods transport department (specific knowledge). The drivers must be citizens of EU Member States or countries adhering to the European Economic Area Agreement, or Swiss citizens, provided they hold valid work permits. a. Reliability: denied to those who have been subjected to executive convictions for serious crimes under the criminal code, and serious infractions (i) of goods transport laws; (ii) of obligations imposed by social-labour regulations (in particular driving and rest shifts of travelling personnel); (iii) of requirements drawn up in the interest of transport safety; (iv) of tax obligations regarding the entrepreneur s activity; (v) of regulations on the transport of live animals; (vi) of environmental protection requirements (in particular for waste, emissions, hazardous goods). b. Financial standing: attested by a reliability certificate and by a certification as to the issued capital; absent if solvency is not insured or there are considerable delays in the payment of taxes or social insurance contributions owed; moreover, own capital must amount to at least 9000 euro for the first vehicle and at least 5000 euro for each additional vehicle. c. e NB: The examination Commission is constituted by a chairman and 2 assistants who must be operators of goods transport companies 189

194 Policy Department B: Structural and Cohesion Policies The Netherlands Goods haulage code (WGW) of 12 March 1999 Royal decision 93 of 27 April 1992 (implementation of WGW) Royal decision of 1999, enforcing EC Directive 96/27 (modifying the same WGW) European Community transport licence: subject to the requirements of good repute, professional competence, financial standing National authorisation: five-year duration, subject to the requirements of good repute, professional competence, financial standing ECMT authorisation (ECMT resolution of 14 June 1973) Good repute: understood as the reliability of the entrepreneur or the company, proven by a good conduct certificate. Has a five-year duration and exists in the absence of irrevocable criminal convictions (convictions for violation of the WGW, of vehicle safety regulations, of the structure, mass, size, and insurance of vehicles, and for violations of collective bargaining agreements). Professional competence: has a five-year duration and, unlike good repute, is required of at least one of the natural persons that assume operation of the activity if the company is collectively structured. It is issued upon passing an examination or when subjects are able to prove at least 10 years management-level professional experience, even if earned in another EU Member State, and have passed their 41st year of age. The subjects examined are listed in Annex I, part I, of EC Council Directive 96/26. Financial standing: 9000 euro for issuance of the first copy of the licence euros for each supplementary copy regarding each vehicle in addition to the first. These are costs that the company must amortise with its own capital. Poland Law on the international transport of goods and passengers of 1991 (adopting the relevant European Community directives) Law of 1997 published in Official Journal No 136 of 1998, position No 158 (harmonisation with content of Council Directive 96/26 regarding only the international transport of goods) European Community or national transport licence: subject to the requirements of good repute, financial standing, and professional competence Good repute or moral standing: proven by certificate issued by the Court where it is attested that there are no convictions with final sentences for tax crimes, crimes against property, road safety crimes, false statements in public acts, environmental damage, failure to comply with labour agreements. Financial standing: 9000 euro for the first vehicle euro for each supplementary vehicle Professional competence: obligation for at least one of the subjects assuming the operation of the haulage company to pass a written examination on the subjects of civil law, commercial law, social law, tax law, business and financial management of an undertaking, access to the market, regulations and technical requirements, and road safety. The haulage companies that have gained professional qualification in another EU country and that wish to perform haulage activities in Poland must pass a supplementary examination on specific aspects (commercial, technical, fiscal) of Polish haulage. NB: a member of the examination commission is designated directly by the haulage trade associations Road transport law of 06 September 2001 (regulation of all road transport) 93 Executive act issued by King 190

195 Shortage of qualified personnel in the road freight transport Spain Real Decreto No 1211 of 28 September 1990 (access to the occupation of haulage operator) Orden del Ministerio de Fomento of 28 May 1999 (adopting EC Directive 98/76 and EC Directive 96/26 of 29 April 1996) Professional competence: recognised upon passing an examination on the subjects listed in Annex I, part I, of EC Council Directive 96/26. It must be gained by the company owner in the case of an individual company; by at least one of the persons leading the company s actual management in the case of companies, cooperatives, or individual companies whose owner does not possess recognition of professional competence. Financial standing: 9000 euro for the first vehicle euro for each supplementary vehicle Good repute: understood as possession of the moral characteristics that exist in the absence of: (i) final convictions for a crime of criminal intent with a penalty of six months or more; (ii) disqualification or suspension of qualification to engage in the occupation of haulage operator; (iii) repeated sanctions for serious road infractions; serious and repeated failure to comply with tax, labour, social security, transport, and environmental regulations. Source: S. Zunarelli, C. Alvisi (ed.) Il governo dell autotrasporto in Europa, Bologna

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