As omicron infections rise and governments tighten restrictions, logistics firms around the world, from global behemoths to small businesses, are struggling to find enough workers. According to the International Road Transport Union, approximately one-fifth of all professional truck driving jobs are unfilled, despite many employers offering higher pay. Some parts of the shipping industry are also sounding the alarm about future hiring prospects.
"2022 is shaping up to be another year of severe disruption, undersupply, and extreme cost for cargo owners," said Simon Heaney, an analyst with maritime research firm Drewry. "The virus is once again demonstrating its dominance," he predicted, predicting another 12 months of overworked labor and healthcare-related red tape.
Workers who deliver goods on ships and trucks are bearing the brunt of a supply chain infrastructure that is still in disarray as the mutated omicron variant takes hold. Companies say that because of the long weeks of quarantine, the perilous nature of crossing borders, and fears of getting sick, some people are refusing contracts and others are looking for work elsewhere.
Many truck drivers in Romania are unwilling to accept long-haul jobs into other parts of Europe, having been stung by last year's 30 mile (48 kilometer) traffic jams and up to 18-hour waits at EU borders. According to Alex Constantinescu, CEO of Alex International Transport 94 SRL, which operates 130 trucks that deliver pharmaceutical and food products across the continent, countries where infections are on the rise are particularly problematic.
Already facing a driver shortage prior to the pandemic, the trucking industry's labor crisis has worsened, he claims. Over the last three years, the company has had to raise wages by approximately 30%.
Concerns About Quarantine
"Long hours on the road, sleeping in the cab, and now not knowing if the people you interact with have the virus — truck driving isn't very appealing anymore," said Constantinescu, the company's founder of 27 years. "When I look behind me, I don't see any new drivers." The pandemic has made this work unappealing."
According to Logistics UK, the number of heavy goods vehicle drivers in the United Kingdom fell by 23%, or around 72,000 people, in the second quarter of 2019 compared to the same period in 2019. Fear of draconian quarantines as a result of the government's Covid-zero strategy is keeping drivers away in China. After 127 cases, the entire western city of Xi'an, with a population of 13 million people, was placed on lockdown last week.
"China has very strict policy measures to control flare-ups, which is making truck drivers reluctant to go to some areas where they might be quarantined," said Salmon Aidan Lee, head of polyesters at energy consultancy Wood Mackenzie. "These harsh measures have exacerbated supply chain issues, and some polyester factories have been forced to close."
The shipping industry is dealing with similar labor issues.
While the crew-change crisis that prevented seafarers from returning home and being replaced with new mariners has mostly subsided — according to The Neptune Declaration Crew Change Indicator, fewer than 5% of seafarers were onboard ships beyond the expiry of their contracts in mid-November, down from 9% in mid-July — companies can't entice them back.
Pipeline Interruption
Western Shipping Pte Ltd., a Singapore-based tanker operator, reported that about 20% of its 1,000 mariners do not want to return to work on ships. As of last month, approximately 5% of Anglo-Eastern Univan Group's 30,000 mariners had indicated a lack of interest in a new contract.
According to Managing Director Belal Ahmed, who also chairs the International Maritime Employers' Council, Western Shipping is forced to hire seafarers from other companies and offer them generous bonuses.
Senior crew members, such as officers with experience and tenure, are among those delaying their return to sea, according to Bjorn Hojgaard, chief executive officer of ship manager Anglo-Eastern Univan.
"Even before Covid, it was difficult to find the right person with the right experience and training on a ship," said Hojgaard, who also serves as the chairman of the Hong Kong Shipowners Association. "Today, we must make a compromise." That worries me because we're not doing anything to improve ship safety."
The shortage may worsen as shipowners and charterers insist on hiring only vaccinated crew. With omicron requiring more booster shots, the scarcity is worsening. According to the Neptune Declaration indicator, less than 30% of seafarers from India and the Philippines, two of the top countries providing mariners, were fully immunized as of mid-November.
"We can't force seafarers to get vaccinated, but customers have stated that they will only use fully vaccinated crew," Columbia Shipmanagement Ltd. Chief Executive Officer Mark O'Neil said. "It's been difficult to keep these massive cargo ships moving."
Wilhelmsen Ship Management, which manages a pool of approximately 10,000 mariners, is concerned about the trend of junior officers refusing contracts, even though it hasn't yet affected the company's overall crew-retention rate, according to CEO Carl Schou. Nonetheless, the pipeline of future officers, who require years of training, may be jeopardized.
"What happens then is that you bring in people who aren't qualified, put them through a shorter training program, and then promote them to roles that require more experience," Ahmed explained. "This could result in more serious incidents and accidents on ships, as well as groundings and pollution." I'm afraid we're on the verge of a disaster."