Skills for Logistics
Alan Smith, Regional Manager North East
Skills for Logistics
Warren Yard
Warren Farm Office Village
Milton Keynes
MK12 5NW
M: 07766408874
E: alan.smith@skillsforlogistics.org
www.skillsforlogistics.org
Learning and Skills Council Contact: simon.wigington@lsc.gov.uk
Click here for the Skills for Logistics North East Fact Sheet
Overview of the Sector in the North East
Skills for Logistics covers freight transport by road, storage and warehousing, activities of other transport agencies, courier services, air freight (other scheduled air transport) rail freight (other transport via railways), freight inland sea and coastal water transport (see website).
The Logistics Industry is crucial to the successful operation of all other sectors. Freight logistics is about the strategic management of the whole supply-chain and network of supply relationships from initial procurement of raw materials through processing, manufacture and retail all the way to the customer and includes large consignments in transit from one country to another through movement between businesses at a local level, right down to parcels post, etc. (see website).
The sector does not include the movement of passengers which is covered by GoSkills.
In the NE there are 1,881 workplaces. 62% of the workforce is in firms with 50 or more employees. (Regional Sector Overview)
The two largest SIC employment groupings within the NE are freight transport by road (11,300 people) and national post activities that employ 9,600 people. These groupings account for 66% of logistics SIC employment in the NE. In terms of occupations, the largest are handling and storage (13,700 people) and heavy goods vehicle drivers which is the occupation of a further 12,900 people.
Employees are predominantly male. The national proportion is slightly higher at 79% compared to 76% males in the NE. (Regional Fact Sheet 2005)
The proportion of the NE workforce with NVQ3+ or equivalent is 27% compared to 42% nationally. (NE Logistics Sector Regional Profile - Skills for Logistics 2005)
The age distribution of the workforce is skewed towards older age groups. At regional level a greater proportion of employees (45%) are aged 45 years + than nationally (40%) (Regional Fact Sheet 2005). Skills for Logistics representatives feel this understates the problem amongst drivers where an estimated 50% are aged 50 years and above.
The proportion of white employees (99%) at the regional level is higher than the national figure of 93%. (Regional Fact Sheet 2005)
Key issues facing the sector now and in the future
Skills for logistics research shows that the biggest problem for logistics both regionally and nationally is the shortage of LGV drivers.
The ageing workforce has been identified as a critical issue. This is especially significant for the North East where there is a larger proportion (45%) in the 45 years + age group than nationally (40%). Amongst drivers the situation is critical where 50% are aged 50 years and above.
The increased complexity of logistics and supply chain management and the need for compliance with environmental and safety legislation in a highly priced competitive market will place huge demands in the supervisory and management staff in the sector.
The European Training Directive will impact on the sector, coupled with the Working Time Directive which limits the number of hours a driver can work, there will be a need for new drivers to gain experience (driving hours) when they have passed their test. The introduction of the Certificate of Professional Competence which will mean that existing drivers in the workforce will have to refresh/renew the CPC every five years. (Smith 2005)
Employment Issues in the North East
Current and forecast recruitment demand (either for growth or replacement)
31,760 people are employed in the sector with growth forecasted at 5% between 2002 and 2014. Including occupations associated with the logistics sector; overall employment levels in the region can be rounded to 61,000. (Regional Fact Sheet 2005)
The sector is different to others in that takeovers and mergers in the sector do not result in job losses as in other sectors as fleets and drivers are not affected. (Smith 2005)
Skills for Logistics research shows that at a UK level, the forecast shortage will be 46,000 by the end of 2005/6. Poor replacement supply and an ageing workforce will exacerbate these shortages.
Recruitment difficulties and causes
Nationally, 18% of companies reported vacancies. (Regional Fact Sheet 2005 from NESS 2003)
Nationally, 8% of companies reported HTF vacancies. (Regional Fact Sheet 2005 from NESS 2003)
The main pre-requisite for a drivers job is the licence – cost implications can be a constraint for both individuals and employers alike.
Machine operatives who include LGV drivers are proportionately the occupational group hardest to fill. 85% of employers reported that this was the hardest group to recruit. (Regional Fact Sheet 2005)
Traditionally, smaller employers have recruited from a pool of employed, competent drivers already employed. The current difficulties are exacerbated by this practice, which can only be addressed if employers and partners adopt a more long-term strategy which takes into account the ongoing training needs of individuals. (Smith 2005)
The 2003 NESS reported the main reasons for having a HTF vacancy in the NE logistics sector was that not enough people applied with the required skills (96%) as well as not enough people being interested in this type of work (59%). (Regional Fact Sheet 2005)
Retention issues
Although the majority of workforces are loyal and unlikely to move between companies, retention has become more of an issue recently as employers may try to offer better hourly rates to entice drivers away from competitors.
Attracting people into the sector
The sector has had a traditional image and previously little attention was given to the complexity of logistics or the career opportunities on offer. The ‘Professional Development Stairway for Logistics’ clearly maps out 12 steps in Logistics. This helps potential recruits understand that there are a range of career routeways which can steer a person either laterally or vertically making the best use of their acquired skills and helping individuals and employers in the sector understand the skills that are necessary at each level. (Smith 2005)
Skill requirements of new recruits
Employers recognize that skill levels need to rise and career development routes need to be much better developed to attract high calibre recruits (see website).
The need for ever increasing efficiency in getting goods quickly from one place to another has led to increasing skills needs at courier and small goods handling levels. Skills for Logistics have developed NVQs in consultation with employers that better meet these needs.
Workforce Development in the North East
Skills shortages/gaps in existing workforce and latent skills issues
The growing impact of technology in the sector has highlighted the relatively low levels of basic and higher level skills in the workforce. Staff across the industry from warehouse staff to professional logisticians will all require skills at higher levels than are currently the norm (see website).
The main reason for internal skills gaps reported by employers in the 2003 NESS was that staff lacked experience or were new to the job (64% of employers with internal skills gaps cited this reason). (Regional Fact Sheet 2005 from NESS 2003)
Skills gaps tend to predominate in new and inexperienced staff, reflected in current industry interest in developing an induction programme to build essential skills and knowledge. (Regional Fact Sheet 2005)
Future skills demand
The increased complexity of logistics and supply chain management and the need for compliance with environmental and safety legislation in a highly priced competitive market will place huge demands in the supervisory and management staff in the sector.
Prioritisation of skills issues within the industries
Skills for Logistics has identified six key headlines in addition to the pressing issue of lack of LGV licensed drivers:
- Management and supervisory skills
- Basic skills – gaps are being revealed by recent mergers in the sector where new working operations and systems reveal deficiencies in this area (Skills for Logistics research)
- Sector image – the job is much more than simple driving and Skills for Logistics recognises this by supporting employers in much needed skill development areas such as, SAFED, Customer services through the development of appropriate NVQs
- Diversification, e.g. there are few women or non whites working in the sector, very little part time working opportunities, etc.
- Encouraging smaller companies to have a positive attitude towards training and skills investment
NB the importance of this sector in relation to the success of other sectors cannot be ignored.
Learning and Skills Infrastructure in the North East
In the 2003 NESS survey, the proportion of employers in the region (23%) who stated lack of suitable courses to be a barrier to training in their organisations was high compared to the national level (13%). The development of the CoVe for the NE has been of critical importance and work will continue towards developing a successful centre to meet the ongoing and changing needs of employers.
Relevance and quality of existing provision
A greater proportion of firms (18%) in the region reported a lack of suitable courses in the area than nationally (13%).
Barriers to employers accessing the skills provision they need
Nationally, 62% of firms provided funding for staff training within the previous 12 months. (Regional Fact Sheet 2005 from NESS 2003 data)
Best Practice
Work on the development of a Foundation Degree is advanced to the point where approval has been received from Foundation Forward. This is an important stepping-stone into HE, helping to raise the profile and image of the sector as professional and with opportunities for progression.
Skills for Logistics and partners have worked up core units with additional modules to meet regional employers needs, an example of this partnership employer led approach is the work that has been done on modules which meets the specific needs of the petro-chemical industry. Generally this approach has resulted in more transferability of skills between sub sectors and a more integrated and flexible approach to meet the requirements of both employers and individuals alike. The CoVE has aided in the development of Foundation Degrees and the delivery of basic skills courses while at the same time promoting routes and opportunities in the sector.
The NE Logistics Training Provider Network
A leading light in the sector has been the establishment of a very successful Network. Initially this was set up to consider apprenticeships for adults aged 25 years and above – issues surrounding the set up of a network made up of competitors have been successfully overcome and a robust well attended forum takes place each month between public and private sector training providers who collaborate to meet LSC/SSC approval and achieve efficiencies. The Network includes Team Train who has achieved the first successes in the UK in NVQ Carry & Deliver. The network has is meeting the challenges of working with a CoVE resulting in a genuine and committed partnership. (Smith 2005)
The Young Drivers Scheme
This is a popular scheme that gives a young person under the age of 21 years to obtain a LGV licence. It has been of particular benefit to family businesses where children were keen to enter the business and allows someone at age 18 to hold a category C licence. It has the additional benefits of attracting people into the industry and is a very thorough process that includes continual testing and an NVQ Level 2 qualification.
Any Other Employment and Skills Issues in the North East
BS Freight has new headquarters on Teesside. It is an independent freight forwarder based at DTV Airport handling air cargo, specialising in the clearance of ships spares and the export of dangerous goods. It also moves goods by sea, road and courier. The new space will prepare the company for expansion in line with the airports plans for major investment in its freight handling capability.
Teesport – plans are underway for an investment of up to £300m which would create 7000 jobs locally and open the port to new and larger ships which would have the capacity to carry more than 8000 containers. (www.icteesside.co.uk/pdports)
Northern Way brings £12m to enhance the North’s connectivity through small-scale investment in areas such as improving rail links to ports and by building the evidence base for greater government investment.
News from the sector
One NorthEast welcomes Teesport terminal approval
One NorthEast Chief Executive Alan Clarke today welcomed the news that the Government has given formal planning approval for Teesport’s Northern Gateway Container Terminal.
“I very much welcome this extremely positive news which is of major significance to the Tees Valley and wider North East economies,” he said.
“Together with partners, we have been working closely with port management over a long period of time to support its case.
“PD Ports’ commitment to invest £300m in building this deep sea container terminal on the Tees will generate wider economic benefits, including new jobs, in the Tees Valley and across the wider North East, further invigorating our already strong and resilient economy.
“I look forward to further private sector investment within the port in the wake of today’s announcement.”
Refrences
Smith 2005 - Alan Smith, Regional Manager, North East
