As driver shortages dominate the news, it is curious that few people have picked up one of the main reasons why these shortages have become a problem. While Remainers call for the restoration of freedom of movement, Brexiteers call for more UK drivers to be trained, both sides are missing the point.
In the 1970s, trucking was seen as a cool job – Driving a powerful vehicle on the open road, radio blasting, traversing the country, picking up and dropping off goods, until you head home. Paid by delivery, the crucial thing was just to avoid driving without a load.
But times have changed and long-distance trucking is no longer seen as an attractive profession. The Covid pandemic has created a boom in short-distance delivery driving, so enticing people back into long-distance haulage will not be easy. There are driver shortages everywhere (Poland has over 100,000 vacancies). Shortages are also not a new problem, but date back a decade.
So the question really is why are these shortages such a problem now? The answer is surprisingly simple.
Empty Lorries
Both the EU and the UK have over-regulated the haulage sector with ill-conceived policies that protect jobs from competition that clearly does not exist.
To be precise, they limit the number of ‘cabotage’ journeys a foreign business is allowed to make in their territories.
The consequence of this is that there are many more empty lorries on the roads now than before Brexit.
According to Michael Clover of Transport Intelligence, prior to Brexit an average of 30% lorries were empty for their return journey, but this has now doubled to 60%.
Driving with no load is not commercially attractive. As the driver shortage allows operators to pick and choose which jobs to do, cross-border journeys between the EU and UK have little appeal.
Why do Cabotage rules exist?
‘Cabotage’ refers to the transport of goods (or passengers) between two places in the same country by a foreign operator.
While you may occasionally hear spurious arguments about national security, the reason that cabotage restrictions exist is to protect domestic industry from foreign competition.
Cabotage laws date back to the 1650s when, under Cromwell, the English parliament passed a series of acts, collectively know as the Acts of Navigation and Transport that banned foreign vessels from transporting goods to England or its colonies. Only ships with an English owner, master and a majority English crew were permitted to engage in such trade. They also placed other restrictions on international trade, such as prohibiting British colonies from importing goods from outside the Empire.
Unsurprisingly, these restrictions were very much resented by the colonies themselves, notably North America, where it became a key factor for the ’Sons of Liberty’ movement that led to the American revolution. Somewhat ironically, the ‘Land of the Free’ adopted the policy wholesale after independence, and has retained it in one form another to this day (Jones Act), while the UK changed course.
In 1849, British parliament abolished the Acts of Navigation and Transport.
Mercantilism gave way to the golden era of free trade.
The reason for this was not just fear of a tit-for-tat ban on British vessels in other countries, but because they could see the benefits of free trade in lowering costs for consumers and inputs for business.
However, a century later this had changed. The Great Depression led to the decline of British industry and a resurgence of protectionism. Transport became seen as a public good rather than an industry. Debating amendments to transport legislation in 1947 the Lord Chancellor, Baron Jowitt, went so far as to claim that ‘carriers are in a sense public utility companies rather than industrial or commercial concerns.’
When the UK left the European Free Trade Association and signed the European Communities Act in 1972, it passed the Road Traffic (Foreign Vehicles) Act, regulating international haulage in line with European law.
This permits three cabotage operations for hauliers from other member states in another without being required to register their business in that state.
While Brexit has presented the UK with the opportunity to set its own policy and return to free market principles, this has not happened yet.
Under the terms of the UK-EU Trade and Cooperation Agreement of 24 December 2020, the EU restricted UK hauliers to only two cabotage jobs within the Single Market – and the UK responded by imposing the same conditions .
As a result, the number of empty lorry journeys has doubled. Aside from hurting businesses and consumers, this obviously increases carbon emissions.
Given the government’s commitment to net zero, they should ask themselves how they can reconcile protecting an industry that does not need protection with their environmental agenda. Perhaps Greta Thunberg can give them a push towards free trade?
Click here to subscribe to our daily briefing – the best pieces from CapX and across the web.
CapX depends on the generosity of its readers. If you value what we do, please consider making a donation.
