The intricate details of the Working Time Directive are enough to send most people to sleep. It is a dry and dull piece of legislation handed down from eurocrats in Brussels, yet its implications are likely to be far reaching.
The eight pages of densely packed legalese called Council Directive 93/104/EC, known as WTD, comes into force for drivers in March next year. Amongst other things it will introduce the 48-hour working week for drivers. The problem is that driving hours are currently restricted to 56 hours, says the Freight Transport Association, but it believes that drivers work 60 hours per week on average.
This combination of restricted truckers’ hours, coupled with distributors still having to deliver goods just as far afield as they ever did has the potential to drastically alter the nature of logistics in this country. The location, size and number of sheds that a distributor needs, as well as the cost of servicing, have all been called into question.
The EU has called the WTD one of the most important interventions to improve employment conditions. However, a straw poll of occupiers, developers and agents reveals that they have not yet woken up to all its implications. Most are aware of what the directive is and how it could potentially affect them, but they remain silent when asked about how they will implement it.
Issues such as labour shortages in the HGV industry, planning restrictions and availability of land all seem to be higher up distributors’ lists of priorities. In fairness, many issues cover problems which overlap with the WTD, but the question is what, if anything, is the distribution industry’s doing?
The problem is that this conversation is of the sort everyone stereotypically expects to have with a cardigan-wearing academic. As Kevin Storey, Cushman & Wakefield Healey & Baker’s head of industrial, explains: “Some of the occupiers might not even know what WTD is.”
But not all are as sceptical. Nigel Godfrey, development director at Gazeley, believes it is on occupiers’ minds, but raises similar questions about developers. “I think it is on the radar of more enlightened developers,” he says. “They are possibly more in tune, but it is tied up with the increasing importance of labour, and access to the national motorway network.”
Couple this with the decreasing availability of large plot sizes, adds Godfrey, and the uncertain likelihood of securing planning and shortening drivers’ hours becomes less significant.
This does not mean that WTD is of little consequence, believes Godfrey. “WTD will be a lot more significant than a lot of people think. It is certainly affecting site search criteria, and next year’s lead-in time for projects will see it implemented more fully.”
Seduced by the economies of scale, the distribution industry’s appetite for supersheds has continued. But with increased congestion on the country’s motorways, shortened driving hours and the increasing importance of “just-in-time” deliveries, will that 500,000 sq ft supershed in the Midlands continue to seem like a good idea?
Nigel Dolan, head of Birmingham industrial and development department at Jones Lang LaSalle, believes that the benefits of the national distribution centre will continue. “I think that the core logistics strategy will remain in place,” he says.
But Dolan warns: “There may be instances where areas cannot be served from within the core structure.”
Satellite warehouses might provide the answer. Dolan believes there is opportunity for smaller depot-style distribution centres in the 30,000 to 70,000 sq ft bracket, but admits there is not going to be a “huge shift”.
This is in line with other agents’ views. “I don’t think it will reshape the UK’s distribution,” says Jon Sleeman, a partner at King Sturge distribution research department.
“Picking locations is relatively straight forward,” he says. “It is a matter of course to put a shed in the Midlands, and you are not going to see a lot of industrial units in the highlands or north Wales.”
These satellite warehouses would be fairly low-tech sheds and might not even carry stock, explains Tim Johnson, partner at King Sturge’s industrial department in London.
“It could just be a shed designed with doors on either side. Nothing would need to be stored there – it could just be a transfer site,” he says. “These would be multi-user facilities, as it makes little sense for distributors to set up individual low-spec facilities throughout the country to service a relatively small percentage of the population.”
So how will these moves affect the face of distribution in the UK? Johnson explains that while there has been a move from the traditional Midlands heartlands, this is not purely a move to accommodate the WTD.
“People are trying to identify new areas where labour is close to a conurbation, but still does not restrict the operation of a building.” Doncaster and Skelmersdale, for example, have benefited as a result.
But this will not affect the Midlands’ position as number one distribution location. As King Sturge’s Sleeman explains: “You can reach a lot of population in four and a half hour’s drive time, given the speed of the motorway network.” The industry’s laissez-faire attitude may come back to haunt it, but for the moment distributors are concerned with more pressing issues.
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Labour continues to be a critical issue in the distribution industry. Jon Sleeman, partner at King Sturge, believes that there is currently a shortage of 50,000 HGV drivers. The working time directive (WTD) can only exacerbate this. “If you go around all the big distribution parks, there is always a board saying ‘drivers required, ring this number’,” says Sleeman. The problem is also an issue of perception. “There is low self image and a training issue, and also a lot of the older drivers are hanging up their driving shoes,” adds Sleeman. The Freight Transport Association has launched a campaign to tackle this. The association represents 212 members operating 2,500 large goods vehicles and 7,000 vans. In a survey published late last year, 83% of respondents reported they experienced difficulties or were finding it harder to recruit HGV drivers. In addition, over half said they had poached drivers from other companies. Many commentators believe that the labour issue will need to be addressed before distributors can truly turn their attention to the WTD. |
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The original 1993 Working Time Directive covered all sectors of activity except transport, activities at sea and doctors who are training. In April 2000, the directive was extended to cover transport workers. The Road Transport Directive will be implemented by 23 March 2005. The main points are: ● A maximum 48-hour working week averaged over a four-month period; ● A minimum daily rest period of 11 consecutive hours a day; ● A rest break where the day is longer than six hours; ● Night working must not exceed eight hours a night on average; ● A minimum of one day off a week; and ● A statutory right to annual paid holiday of four weeks |
