In the first quarter of 2024, the Polish TSL sector is forecast to see a slight reduction in employment, though no company is planning to get rid of its skilled staff. On the contrary, the employment of significant workers will be increasing. Throughout the year, companies will be mainly looking for warehouse workers and drivers, and a shortage of the latter will cause real nightmares in Polish and European transport. There is an increasing recognition that human capital in TSL is a strategic resource, and its role will increase in significance even more by the end of the decade.
The transport and warehouse economy sector in Poland, despite a decent end of the year, did not manage to finish the past year in a good mood. In December surveys by GUS, the general business sentiment was again rated below the neutral level (-4.9), and slightly worse than in November (-3.7) and October (-1.4). Only the largest companies, employing 250 and more workers, remained optimistic. This group of firms has been assessing the situation positively continuously since March 2023.
The less than stellar diagnosis of the overall economic situation in the sector, which has been maintained since December 2021, has had a clear impact on the Q1 2024 forecasts. Companies coolly assess the upcoming months in all areas examined by GUS, including employment. The current forecast for dismissal/recruitment balance for the current quarter is a negative 2.4, favoring job cuts. That the indicator would deteriorate at the beginning of the year was declared in December by 11.4% of directors of companies in the transport and warehousing sector, whereas 9% predicted an improvement. The remaining part, or nearly 80% of the 850 surveyed entities, does not plan any new hires or dismissals at the beginning of the year.
However, employment commitments differ significantly when it comes to assessing the importance and impact of employee competence on the company’s operations in the opening quarter of the year. Thus, the proportion of companies declaring a reduction in employment of relatively easy-to-replace workers has risen to 9.7%, while 5.9% declare an increase in recruitment of such staff. A balance at the level of negative 3.8 is therefore unfavorable for low-skilled individuals.
Quite the opposite situation will be observed in difficult-to-replace positions, as 9.2% of companies declare an increase in employment of staff with valuable skills. A reduction in Q1 is announced by 5.5% of firms, which still results in a positive employment level of +3.7.
The belated entry in the buzz around renewable energy leaves Polish TSL with a lot going on, and this year is proving to be pivotal. There’s a strong focus on ramping up jobs in warehousing and transport, especially with the shortage of drivers looming like a dark cloud.
According to the data quoted in last year’s report of the Transport and Logistics Poland (TLP) employers’ association, the TSL sector accounted for 7% of the Polish GDP and concentrated 6.5% of all employees in 2022. GUS data indicates that this is even 955,000 people. According to the analysis of the State Economic Institute (PIE), transport and warehouse economy workers are the third largest professional group in the services sector. Therefore, it is not surprising that the category Transport and Logistics, along with IT, engineering, and telecommunications, was at the top of job advertisements published on the Polish Internet last year.
Such a conclusion comes from the data available on the Job Market Insights platform, which monitors recruitment offers appearing on online services in 19 countries worldwide, including Poland. In the entire year 2023, a total of 321,730 unique job offers were published in our country in the Transport and Logistics category. It is also clearly visible that the dynamics of recruitment processes reflected the prevailing moods in the industry. The number of advertisements increased quite stably from the beginning of the year until May. In June it fell into stagnation and began to oscillate at a steady level of approximately 29 thousand offers per month. A clear drop below the level of 24 thousand occurred in November, whereas in December the number of offers plummeted down to 18 thousand, which is a considerably weaker result than in December 2022 when 20,051 recruitments were opened. That’s a decrease of 11.5% year on year.
Throughout the past year, warehouse workers and drivers were by far the most sought-after workers, which, considering the geographical parameters of the Polish transportation and warehousing sector, should not be surprising. Domestic companies provide over 20% of transport work performed in goods road transport in the European Union. We have also recently advanced to the narrow circle of European countries that can boast a modern industrial and warehouse area exceeding the level of 30 million square meters. It is therefore no surprise that the most recruitment offers concern warehouse workers and drivers and come from the vicinity of the largest cities where logistics parks and centers are located.
Job Market Insights analyzes also reflect the strong position of Polish TSL in terms of its potential for the labor market. Even in the weakest month of last year, i.e., in December, 17,986 advertisements were published in the Transport and Logistics category, which accounted for 9.8% of offers placed in all recruitment categories. Whereas the 4,705 TSL firms, which were looking for employees at that time, accounted for 15.4% of enterprises conducting recruitments at that time. The revitalization of the economy will probably raise these shares in the following months of 2024.
Although filling the clear recruitment pit from the end of 2023 will take some time, the dynamics of recruitment is certainly going to return in the second half of the year. It’s hard to imagine the smooth functioning of the economy, not only Polish but also global, without satisfying the recruitment needs of the TSL sector, as is evident in the case of the drivers’ market.
The calculations of S&P Global show that the direct contribution of road transport in building global GDP stands at 3%. That’s more than other transport models combined (rail accounts for 0.5%, air and sea transport for 0.8% each). Road transportation also has the majority share (56%) in the 4 trillion dollar revenues derived from global goods movement. The rest, i.e., 44%, belong jointly to the other models. At the same time, as stated by the International Road Transport Union (IRU), globally, over 50% of firms have serious or very serious problems with recruitments for driver positions. However, in Europe, as many as 62% of companies make such declarations. Only 17% signal minor problems or none at all, whereas 21% declare moderate difficulties.
According to the latest IRU survey, in 2023 7% of open driver positions in Europe remained unfilled. Simply put, no willing individuals were found, and the demand reached the level of 233,000 people.
For 57% of European companies, this means a lack of opportunities to deliver the appropriate load capacity, which in turn signifies the impossibility of business expansion. 60% of firms believe that market shortages result in less qualified workers, and 56% points out increased costs of maintaining employment. Alongside these factors, there are also lowered productivity (49%), declining revenues (39%), a decrease in competitiveness (30%), delivery delays (27%), more accidents (23%), and other negative consequences.
This year, the driver shortage index in Europe may reach 11%, meaning that as many as 0.5 million needed workers will be required. However, the ultimate demand will depend on the demand for transport services and the condition of the economy. The drop in unstaffed positions to 7% in reality last year did not result from a larger number of candidates but from a decrease in demand for transport, among others due to the economic slowdown, reduced consumption, high inflation, and slow wage growth, etc.
For example, in the UK, where in 2021 there was a shortage of close to 10%, which equaled gigantic gaps of even 80-100 thousand drivers, in 2023 the index dropped to 6%, which suddenly resulted in thousands of unstaffed vacancies. Theoretically, the problem resolved itself, whereas practically nothing changed because this is a structurally difficult issue, and this year it will certainly increase in strength.
Such will be the case mainly because the four-point growth in unstaffed vacancies in Europe (to 11%) will be driven by growing GDP. Better economic conditions will fuel the demand for transport services, and the matter of drivers will again come to light. Proof of this is, for instance, the growth of transport work performed in goods road transport in Europe predicted by Transport Intelligence, which is supposed to increase from 1.92 million tkm in 2023 to 1.94 million tkm in 2024.
According to IRU estimates, last year Poland was short of about 29,000 drivers, which represented 7% of vacant positions. The same high shortages were declared in Germany (7% | 31 thousand) and Spain (7% | 30 thousand). If it comes to the percentage share of unstaffed positions, the Finns (19%), the Slovaks (14%), and the Romanians (10%) have a bigger problem than Poland.
The increase in demand for drivers in our country is certain, for from every side forecasts about the accelerating economy are coming in. The World Bank predicts a 2.6% increase for Poland, the NBP approx. 3%. According to PIE, the Polish GDP will grow by 2.3% in 2024, with household consumption being the main growth engine, which is excellent news for the warehousing sector.
However, there will not be more drivers, also due to their age. Already, 33% of drivers in Europe are over 55 and will retire in 5-10 years. At the same time, the group of followers under the age of 25 represents only 5% of the labour market share. Just due to this reason, i.e., retirement, it is estimated that in the period of up to 10 years in Europe there can be a lack of even 1.2 million drivers. The relatively close forecast for 2028, which assumes a level of unstaffed positions at 17%, or 745 thousand vacancies in Europe, looks exceptionally pessimistic. In 4 years’ time, to serve the European economy, even 3.9 million drivers will be needed, but according to IRU, only about 3.2 million will be professionally active.
In this context, Poland has another problem, namely not only retirements but also resignations from the profession. From the Inelo survey conducted in 2023 on almost 2 thousand drivers, it turned out that as many as 76% thought about changing their job within the last 6 months.
The consequences for Poland will be the same as for other economies with shortages. The IRU points to an increase in transportation rates and inflation, a slowdown in GDP growth, and even a potential increase in CO2 emissions. In the longer term, also an acceleration in the area of autonomous vehicles.
The problem in this last issue is that large-scale and highly capital-intensive autonomization will not be possible everywhere, both for technical, infrastructural, and even legal reasons. Self-driving trucks are only in the early stages of development. There is a lack of not only design solutions ready for mass and cost-effective production and use but also of legal regulations and even road infrastructure, as most certainly these will be units powered by alternative fuels.
“Operators, transporters, and other entities active in the TSL market, who will not be able to implement appropriate strategies for acquiring and retaining talent, will limit not only their chances for development but also for maintaining competitiveness. The challenges will concern not only road transport but also the entire logistics ecosystem. For example, while in e-commerce it is almost entirely possible to automate the process of packing and shipment, it is much more difficult to organize returns handling, especially their verification and repairs, in such a way. This is all the more important as we already live in an era of sustainable business activities and responsible management of logistics cycles, to which the sector’s contractors are tuned. So there is little to suggest that human capital will cease to be the strategic resource of TSL companies. On the contrary, in the future, it will play an even greater role. This is visible in global talent shortage surveys, which report 75% of companies worldwide. Competencies related to logistics operations are currently in fourth place on the list of hardest to find skills among candidates,” says Małgorzata Hornig, HR Director at ID Logistics Polska.
