The global supply chain crisis

And later we will find out that the global supply chain crisis is the latest invention of the rich to make the rich richer.

How the impact in one market leads on to another, in this case soaring gas prices leading to food production getting reduced
https://www.bloomberg.com/news/articles/2021-09-30/your-tomatoes-may-cost-more-as-gas-prices-hit-dutch-greenhouses?sref=z77yHwwS

Centralisation in the fast moving digital age is dangerous. It just doesn't scale. Massive single points of failure which the global economy relies on are dangerous.

Even in the online world: Last year a massive amount of the internet went down for a few hours. Day before yesterday Facebook, WhatsApp, Instagram went down for 6 hours. People rely on a lot of this tech to communicate.

IMO we need protocols that turn all our phones into little web servers so the internet is an actual network, not just a massive data centre in California. We also need to invest in 3D printing, high tech city agriculture etc so it is possible for every community to be sustainable individually. I hope technology advances towards that world.

Centralisation in the fast moving digital age is dangerous. It just doesn't scale.

I got soundly ripped on for saying that in an interview with Institutional Investor magazine a few years ago. To be fair, I was talking about centralisation of financial services systems but my point still kind of stands.

Don’t mind if I quote this out of context, do you?

Ha ha, fill your boots.

https://www.ft.com/content/e8ca2a08-308c-4324-8ed2-d788b074aa6c

Europe’s trucker shortage becoming ‘extremely dangerous’
Dearth of drivers blamed on soaring demand, low wages and poor working conditions

Lorries on their way through Germany. The EU is short of 400,000 heavy goods vehicle drivers, industry associations warn © Jens Niering/dpa

October 13, 2021 4:00 am by Martin Arnold and Alexander Vladkov in Frankfurt

Steffen Bork sees the 25 or so trucks sitting idle at his family-owned haulage company in central Germany as clear evidence that a lack of drivers across Europe is reaching an “extremely dangerous” point.

“For months now, our business has been characterised by an acute shortage,” said Bork, the third generation of his family to manage the company. “Some of our existing customers have overflowing order books. Due to the driver bottleneck, enormous pressure has built up.”

Bork’s worries are the latest sign that Europe’s rebound from the coronavirus pandemic is creating widespread supply-side frictions as companies struggle to find enough workers or materials to meet rising demand — slowing the economic recovery.

Increased economic activity after coronavirus restrictions were eased across Europe earlier this year had produced a “very high workload for drivers and dispatchers, which in turn leads to dissatisfaction and resignations”, he said. About 10 per cent of his company’s 290 trucks were without drivers, he said, adding: “There is high customer dissatisfaction with our failure to meet deadlines.”

The shortage of heavy goods vehicle drivers is widespread across Europe, reaching 80,000 in Germany and 400,000 across the whole EU, according to industry associations. They warn the situation is likely to worsen owing to an ageing workforce — the average age of drivers is over 50 — and difficulties recruiting young people.

So far, however, there are no signs the impact in the EU is as severe as in the UK, where the army has been deployed to deliver fuel to petrol stations, ports are overflowing with containers awaiting delivery and some supermarket shelves are empty.

The country’s crisis has been partly attributed to Brexit. The number of truck drivers there dropped year on year by 29,000, or 9.5 per cent, in the 12 months to March, according to the Office for National Statistics. More than half of the drop was owing to a 36 per cent decline in the number of EU citizens working as drivers in the UK, the ONS said.

Line chart of % change in advertised job vacancies since Feb 1 2020 (seasonally adjusted) showing Truck drivers needed
“In Germany and all over the EU we have the same problem as in the UK, but in the UK it was made worse by Brexit,” said Dirk Engelhardt, chair of Germany’s Federal Association of Goods Transport, Logistics and Disposal.

Engelhardt blames EU driver shortages on low wages, the job’s bad image among young people and the poor treatment of workers. “When drivers deliver to big industrial companies, they are not even allowed to use the toilets,” he said. “They are treated like animals. This must stop.”

Horst Kottmeyer, owner of a haulage company with 300 trucks in north-west Germany, has tried to recruit from Poland, the Czech Republic and the Baltic nations. “But in the meantime, the driver shortage has also arrived in these countries,” he said.

Kottmeyer worries the situation could be aggravated once carmakers and other industrial groups recover from pandemic-related shortages of materials such as semiconductors that have held back production.

In August, a 17.5 per cent month-on-month fall in German production of motor vehicles and trailers left overall industrial output in Europe’s largest economy 9 per cent below pre-pandemic levels.

Others are concerned that when tougher EU labour laws on commercial road transport, known as the Mobility Package, come into force next year the crisis could deepen. The regulation will make truck drivers eligible for the minimum wage of every member state they drive in for most jobs outside their home nation, to take a minimum number of breaks and to return to their home base every eight weeks.

Line chart of % of businesses saying labour is the main factor limiting activity showing Labour shortages return to EU
But Isabelle Maitre at France’s national federation of road transport, believes the new rules will improve the image of the sector and boost recruitment. “We are trying to attract more young women to join the industry,” she said.

Labour shortages are also affecting other industries as the eurozone economy rebounds and unemployment falls back towards pre-pandemic levels.

The proportion of EU companies saying staff shortages were the main brake on activity reached record highs in the industrial and construction sectors in September, according to the European Commission’s monthly survey.

As in the US and UK, many European restaurants and bars have had difficulties hiring staff since they reopened after coronavirus lockdowns. More than a third of German builders said they lacked workers in a recent survey by the Ifo Institute in Munich.

However, the eurozone’s unemployment rate was 7.5 per cent in August, well above levels in the US or UK. Economists say the region’s labour shortages are likely to ease as people who left the workforce during the pandemic look for jobs, furlough schemes expire and remaining Covid-19 travel restrictions are lifted.

Line chart of (% of eurozone labour force) showing Europe's labour market rebound
Enzo Weber, head of research at the Institute for Employment Research in Nuremberg, said its index of German labour shortages remained below pre-pandemic levels, despite rising sharply since the spring. “We have had a severe redirection of migration since Brexit,” he said. “New migrants don’t go to the UK any more, they go to Germany, France or other countries and these jobs like builders and lorry drivers are typically done by migrants.”

And while the UK’s driver shortage has led to ships being diverted from the UK’s main port at Felixstowe because it is rammed full of containers, the three big EU ports of Rotterdam, Antwerp and Hamburg say they are confident of being able to handle their exceptionally high volumes of cargo.

For German truck drivers, the UK’s problems have been positive in at least one sense — raising awareness of how badly things can go wrong if labour shortages are not addressed. “The current situation in the UK really helps us,” said Engelhardt. “The government is afraid to have the same things happen here.”

Dirk Engelhardt

A beautiful and somewhat apt sounding name.

Just keeps getting worse...