Going The Extra Mile: Ireland’s Transport Sector

Going The Extra Mile: Ireland’s Transport Sector

The logistics sector is a vital component of the Irish economy. We look at the international and domestic challenges and changes facing transport and haulage.

There were an estimated 48,800 people employed in core freight-transport, distribution and logistics occupations in 2015, according to a report by the Expert Group on Future Skills Needs. However, access to skilled workers is a major concern for the logistics sector in Ireland.

International changes including technological advancements, sustainability goals and regulatory requirements, as well as domestic factors such as the open nature of the Irish economy, are increasing the need for skilled workers in the logistics sector.

The report estimates that the sector will need up to 15,500 extra skilled workers by 2020, with access to heavy goods vehicle (HGV) drivers with the relevant licences the biggest anticipated skills challenge in the medium term. HGV drivers make up 30% of the workforce in the logistics sector, according to a survey carried out by engineering company AECOM, followed by operational staff, and managers and directors, who make up 26% and 22% respectively. Despite this, 18% of respondents found it difficult to recruit drivers with the required licence.

Young drivers and graduates

As a large proportion of drivers are over 45, with many approaching retirement, particularly among those with HGV licences, the sector urgently needs to attract more young drivers into the workforce.

The Irish Road Haulage Association (IRHA) is currently developing a young driver apprenticeship programme to address this area of concern. Verona Murphy, president of the IRHA, says: “There’s a serious driver shortage at the moment combined with a worrying industry age profile of 48-plus. If we don’t encourage more young drivers into the sector we are facing an extreme deficit in the not so distant future.

“The young driver apprenticeship aims to encourage more young drivers to join the sector by making it more accessible to them. The programme has the support of insurance companies in Ireland, who typically only offer HGV insurance to drivers aged 25 – 70, making it harder for young people trying to get started.”

Murphy hopes the first intake of the programme will begin in September 2017. Courses will start every 16 weeks, each lasting three years and taking on 12 – 16 young drivers.

There is also demand for more graduate-level entrants to the sector to ensure a future provision of managers, planners and associated office workers with adequate skills including e-skills, languages, flexibility and cultural awareness.

Increasing diversity in the industry

The Chartered Institute of Logistics and Transport (CILT) Ireland, meanwhile, is working to establish a Women in Logistics and Transport (WiLAT) group in Ireland to attract more women, who are far from proportionally represented in the sector.

Dr Dorothy Chan, global adviser at WiLAT, says: “We all know that significant performance benefits come with having a diverse leadership team and a well-established business case for gender diversity.

“Increased globalisation, concerns over sustainability, and technological advances are transforming the business environment. To prepare for these challenges, CILT is actively encouraging the participation of women in the supply chain and transport sector, which is a male-dominated industry. Women also need to be motivated to take leadership positions and WiLAT has established four strategic thrusts as our direction for action: mentorship, leadership, entrepreneurship and empowerment. In short, we must welcome and embrace diversity in order to grow and meet the challenge of today.”

The WiLAT group will support those currently in the industry and encourage more women to consider logistics, transport and supply chain as career options.

Knowledge of careers in this field is often restricted to the more traditional roles such as HGV drivers, but the sector offers varied and relatively well-paid professional career opportunities. According to Morgan McKinley’s Supply Chain Salary Guide, average salaries within the logistics sector range from €28,000 to €60,000 in 2017. The Central Statistics Office’s latest figures for Q4 2016 show that average weekly earnings for all employees in the transport and storage sector was €769.91, up from €755.46 for the same period the previous year.

Going green

More stringent EU regulations and consumer concern about CO2 emissions are increasing pressure on the logistics sector to become more sustainable. This is encouraging logistics companies across the EU to invest in eco-friendly technologies including by using electric vehicles, improved vehicle-emission technology, and compressed natural gas for freight movement.

Gas Networks Ireland recently launched its Compressed Natural Gas Vehicle Fund making a total of €700,000 of funding available to transport operators in a bid to provide commercial vehicle operators with a viable alternative to traditional fuels such as diesel. The fund will support the purchase of a range of commercial vehicles including trucks, buses and vans powered by compressed natural gas (CNG), and is part of a process to promote natural gas as a transport fuel in Ireland.

“CILT is actively encouraging the participation of women in the supply chain and transport sector, which is a male-dominated industry”
Dorothy Chan, global adviser, Women in Logistics and Transport

Energy required for transport accounts for approximately one third of Ireland’s total energy consumption, and transport emissions account for 20% of Ireland’s total emissions.

Denis O’Sullivan, head of commercial at Gas Networks Ireland, said: “The Vehicle Fund will support transport operators around the country to switch from vehicles powered by heavy-emission fuels to a cleaner and cheaper gas alternative. The switch to CNG will facilitate a fuel-cost saving of up to 35%, a 22% reduction in carbon dioxide emissions, a 70% reduction in nitrogen oxide emissions and an 80% reduction in sulphur dioxide emissions compared with diesel.”

Gas Networks Ireland is also developing a national, 70-station CNG refuelling network to provide nationwide coverage for vehicles operating on Irish roads. This national network will complement the pan-European CNG network, which is already under development.

“Development of the CNG network will also ensure that renewable gas becomes part of Ireland’s transport fuel mix, providing the only fully carbon-neutral fuel source for commercial transport,” said O’Sullivan.

Technological advancements such as truck platooning and autonomous trucks also offer significant fuel savings; however, they are not expected to be seen on Irish roads for a number of years.

Brexit: challenges and opportunities

Brexit is another significant challenge facing the transport and logistics sector in Ireland today. The possible impact of currency fluctuations, customs checks and alternative tariff schemes are all areas of concern for the sector, according to the latest logistics and supply-chain confidence index from KPMG and commercial property specialists CBRE.

However, despite uncertainty, the report shows that 80% of businesses expect their turnover to increase during the year, with 58% expecting profitability to improve. More than half (55%) expect to increase their logistics-related headcount to some extent over the next 12-month period.

Significant opportunities also exist, including attracting foreign direct investment, both from UK firms relocating to remain within the EU and from other overseas sources looking for an English-speaking location within the EU.

Dublin

Demand for industrial and logistics facilities has been growing steadily but access to modern industrial accommodation in the Dublin market has been scarce.

Mountpark Logistics EU recently received approval for the development of a major logistics hub in Baldonnell, South County Dublin. Construction of the €40m state-of-the-art hub, which is due to commence in September, will create 120 jobs, while up to 850 jobs are expected to be created by the companies operating from the hub.

“With the increasing importance of e-commerce, purpose-built logistics facilities are strategically important. This site at Baldonnell is ideally located to serve Dublin and the eastern region,” said Philip O’Callaghan of Mountpark.

Changing consumer habits

Changing consumer habits and the increase in e-commerce mean there are more delivery vehicles on the roads than ever before.

Ireland introduced Eircode – the country’s equivalent to postcodes – in July 2015 in a bid to make the delivery process easier for businesses. However, uptake of the system, which aims to make the delivery process more efficient, has been poor. A large majority of respondents (92%) to the KPMG/CBRE confidence index say “they have not adapted their business processes in order to exploit Eircode”.

The rise of e-commerce means consumers now expect ‘next-day’ or ‘next-hour’ delivery to be available to them. An efficient delivery process is therefore vital for logistics companies.

Logistics hubs located closer to markets mean we can expect a raft of small electric and hybrid vehicles (trikes and almost milk-float-type vehicles) proliferating as the need for versatile ‘final-mile’ delivery and city service vehicles rises.

 

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