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Thu 13 Mar 2008 04:00 AM

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Driver shortage

The Middle East's status as a logistical superhub is reliant on the smooth transportation of products throughout the region. However, with a potential crisis in the supply of qualified drivers, how can fleet managers overcome the local skills shortage?

The Middle East's status as a logistical superhub is reliant on the smooth transportation of products throughout the region. However, with a potential crisis in the supply of qualified drivers, how can fleet managers overcome the local skills shortage?

With business in the Middle East escalating at an alarming rate, there are concerns that employment levels cannot keep up. Fears that growth has outpaced the current labour pool, pose a threat to the logistics industry.

Nationality of our drivers tends to be mixed. We employ people from India, Pakistan, Philippines, and we do have some Egyptian guys too.

In particular, there are concerns regarding the increasing shortage of fleet drivers, which if continued, has the potential to cause severe service disruptions and inflation of costs ultimately reducing the competitiveness of the industry.

A recent employment market survey published by Logistics Recruitment emphasises the rapid pace of growth in the region. 90.27% of Middle East respondents said that business activities and growth have increased in the last year, in comparison to an 82.23% overall growth worldwide.

As a result, staff levels have increased and predictions indicate there will be a 78.13% rise in the next twelve months, compared to a global rise of 57.14%.

This growth in the Middle East is placing an increasing amount of pressure on local resources, particularly employment. Dulsco, a Dubai-based labour supply company, has found the labour demand for logistics companies to have significantly risen in recent years.

Prakash Parab, manager of manpower services of Dulsco, articulates the growing problem for logistic companies. "With the market boom in the Middle East, there is a tremendous shortage of skilled workforce, especially drivers," illustrates Prakash.

The sheer scale of the construction boom could be one of the factors for a decline in drivers. There is a correlation between the two, as both industries attract a similar type of applicant, namely migrant workers.

Drivers, however, may find opportunities in the construction industry more desirable, and therefore logistic companies need to find a way to attract more transport drivers to avoid losing labour to the construction industry.

It is not just logistic companies that are at risk; drivers in general seem to be in short supply. The hire company Avis is finding it particularly difficult as the sheer range of vehicles it offers has resulted in a requirement for a high number of drivers.

Presently it employs a seemingly large volume of drivers, yet this is still not enough.

Regional powerhouse, National Trading and Developing Establishment (NTDE) is also heavily reliant on its drivers due to the fact it distributes products to an impressive 7500 customers.

The company's clients range from large hypermarkets, duty free operations, ship chandlers and commercial concerns to small grocery shops. While it currently has a sufficient number of transport van drivers, a shortage of heavy duty drivers has proved to be a problem.

Consequently, the director of the logistic division, Muhammed Hariz is increasingly aware of the rising number of vacancies and the potentially dwindling number of drivers.

In order to reverse this situation, Hariz is recycling his drivers by converting their existing licenses to heavy duty ones. However, for many companies it is not that easy, as some logistic managers are struggling to even employ drivers with a standard driving licence.

This is because the Road Transport Authority (RTA) has increased the requirements in applying for a UAE driving licence, which has caused the enrollment of drivers to be more problematic.

Avis also complains of the restrictions now in place. "The problem is that before you could transfer the GCC licence easily to a UAE licence, now it has been stopped," says Mohammed Youssef, fleet manager, Avis.

For companies like DHL, this can have catastrophic effects on its recruitment process.

"Compared to before where drivers would come in from other Middle Eastern countries, they would be carrying with them the right licence and it could easily be transferred to the UAE licence. This is not happening anymore", explains Butch Vargas, fleet manager of DHL.

Not only have the licence requirements changed, but so too has the labour force. DHL has begun looking further afield for drivers in order to keep up with the growing demand.

"Nationality of our drivers tends to be mixed. We employ people from India, Pakistan, Philippines, and we do have some Egyptian guys too," adds Vargas.

By employing drivers without the relevant UAE driving licence, overall employment procedures can be significantly prolonged.

Vargas has become frustrated with applying for UAE driving licences for his workforce, an issue he now faces on a daily basis. "It can take anywhere from two months to four or even five months. It is a very long process indeed," says Vargas.

The main grievance for fleet managers is that there is no exact date confirming when drivers will receive their licence, which makes it difficult for companies to mitigate the problem.

"Again the driving test is another story, as sometimes you have to wait up to one to two months to book a test," explains Vargas.

The complication in attaining the correct driving licence will no doubt affect the level of employment for companies, at least on a temporary basis. Another prevailing issue with recruiting overseas is receiving visa clearance.

"I think there is a standard two to three weeks, but it does not usually happen like that. It is usually between seven to forty five days," comments Vargas. "Companies therefore have to allow for delays in gaining both a licence and a visa for foreign workers."

Although the process in applying for a licence may be slow, the stringent requirements do benefit logistic companies in the long run. Al-Futtaim Logistics fully supports the more rigid requirements for drivers in the UAE.

"Enhanced safety and stricter controls on licencing is designed to reduce congestion and accidents, such strategies that are fully supported by Al-Futtaim Logistics," says Martin Palmer, transport manager of Al- Futtaim Logistics.

With these new laws in place, companies must learn to adapt by exercising diligent planning when recruiting drivers to combat a prospective shortage.

"Any business expansion plan or anticipated volume increases must have drivers included as a critical success factor earlier on in the planning cycle than was assumed in ‘quieter' times," explains Palmer.

Companies that have not planned for this increase look set to suffer, but Al-Futtaim Logistics believes it has prepared for the change in market conditions. "We have allowed sufficient time in our recruitment process to ensure sound contingencies," continues Palmer.

By putting effective recruitment strategies in place, any critical impact on logistic operations is likely to be reduced.

Al-Futtaim has recognised the growing demand for drivers and has formed a partnership with Dulsco in order to manage its fluctuating recruitment requirements, which has resulted in a decrease in their overheads.

Dulso's HR outsourcing division alleviates the headache of recruitment by handling all visa requirements, providing extensive training and helping companies to avoid long-term staff commitments.

However, not all logistics companies have the revenue to rely on recruitment specialists.

With little choices available to source drivers from, companies often fall back on advertising in local newspapers, and predominantly source new recruits operating in agencies out of India and Pakistan.

Recommendation is also a popular form of recruitment and many drivers receive incentives for recommending friends and family.

Although local recruitment companies in the UAE seem to be selective, this is not necessarily the main factor for possible driver shortages.

Providing companies ensure that their businesses have viable solutions in place, the recruitment of drivers does not have to be a major dilemma.

DHL is aggressively adopting invaluable contingency plans to avoid a major shortage of drivers. "We are processing applicants on a continuous basis based on forecasts in growth," says Vargas.

Because of the problems DHL has encountered with the application for driving licences, the logistics giant is in the process of negotiating with Emirates Driving School to provide a more intensive training scheme for its drivers, and is in many cases sending them drivers before they have actual vacancies.

By investing in drivers prematurely, it will lessen the impact on their business in the future. "They are really supportive, flexible and dynamic with our requirements," comments Vargas.

DHL also reduces the risk of driver deficiencies by providing incentives and on the job training. Consequently DHL boasts a high retention rate.

NTDE's logistics manager Hariz also recognises the importance of motivating staff through incentives, as he believes they gain more "respect" through recognition.

According to a study by the National Private Truck Council and Transportation Technical Institute, the higher the driver pay, the lower the turnover. This is not always a realistic option for companies; nor the most effective way to retain employees either.

Equipment condition and company reputation are equally important.

"We offer competitive remuneration packages; the strength and the trust of the Al-Futtaim name, a strong team ethic and prospects of a stable career, with good growth opportunities," says Palmer.

Rani Ghazzawi, general manager of Fleet Management Systems International (FMSi), has witnessed one too many cases where companies lose a large amount of money due to driver abuse towards their vehicle.

FMSi's tracking products help minimise this risk. "I am a big believer in the importance of drivers to a fleet, and would recommend to all logistic companies to ensure they hire responsible, qualified drivers and provide them with plenty of training," advises Ghazzawi.

By investing in efficient recruitment strategies, offering generous incentives and training, and by monitoring a fleet thoroughly, logistic companies in the Middle East should have a wealth of experienced drivers to support their phenomenal growth.

"Skilled and professional drivers are no doubt in high demand internationally, given the ongoing focus of HSE in transport as well as increased volume demand generically."

"In areas of particularly high growth, such as the UAE, this trend is likely to be more pronounced, and thus constantly requires adherence to the principles described above," concludes Palmer.

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