One of the leading themes in the national and global press in recent times has been the changes in the global transport markets. Disruptions and disruptions in global supply chains. Fast, on-time delivery of goods, formerly required by ‘just in time’ logistics, is increasingly being replaced by ‘inventory logistics and warehouse-to-warehouse’, with the geographical displacement of goods playing a particularly important role.[1] In fact, this has been one of the major negative outcomes of the pandemic epidemic caused by the coronavirus. I asked Éva Makai, head of freight forwarding and customs at ANY Security Printing House Plc, about the state of the freight forwarding process, the new changes that operators are facing and the possible changes in the labour market in this context.
Freight forwarding and transportation are often confused in everyday language. The two concepts have a close relationship with each other, but they are not interchangeable! To simplify, the freight forwarder performs the intellectual background work, while the carrier physically carries out the product’s transportation. During freight forwarding, planning processes take place to ensure that the product arrives at its destination as quickly and cost-effectively as possible. In this case, there is no handling of goods, this work process occurs during transportation, mainly during loading, on land, water, and air. When we say on land, we mean on roads and railways, same with on water, we mean river and sea transport, lastly, in the air, both in personal and cargo transport. Of course, combinations of these are also increasingly used, such as RO-LA transport, where trucks are put on trains at terminals and then transported further.
“When we talk about the type of freight forwarding, it is important to remember at the outset that from a labour law and HR point of view, when and whom interest should be upheld.”
As explained by the interviewee, there are several points of view in the field of freight forwarding. While the client’s interest is to have a certain shipment delivered as quickly, accurately, and cheaply as possible, the carrier’s interest is to make a profit, ensure that the transport is feasible, and ultimately, to have control over the fate of the goods in terms of safety and security.
After these points, government administration comes into play, for whom it is important to uphold its tax policy, in compliance with regulations and enforcement, and control aspects of the transportation industry, given their political and taxation system. As a result of this, the government aims to collect as much tax revenue as possible.
There is also a large group of people whose interests must be considered at all costs in transport, and who are gaining ground: the environmentalists. Their interests include reducing the ecological footprint and carbon dioxide emissions, as well as moving from paper to a digital basis. According to Ms. Makai, the production of paper products and their transport is placing a huge environmental burden on the planet, which is increasingly pushing for a switch to digital. This will require new technical developments – both in software and hardware.
According to the transportation and customs manager, for transportation and shipping to occur, conditions must be provided for the government, carriers, and customers that enable this to happen. As a first step, it is necessary to provide a public, online interface – network access that any “simple” driver can access. This is not, of course, in any way to demoralize the driving profession, but to acknowledge that many professions are in a state of complete transformation in terms of economic and technological developments.
Ms. Makai believes that when it comes to Europe it is primarily thanks to the dual education system, which works most effectively in Germany and Sweden. The essence of this transformation in human resources is that at present, regardless of the profession we choose to study, it is essential to have information technology awareness, or some IT knowledge. As a relevant example, she mentioned drivers.
“At the moment, the readiness of a driver extends from the preparation of the technical background to the driving ability, all the way to being able to speak a foreign language. Furthermore, they should recognize the operation of technical devices such as analog and digital tachographs[2], mobile phones, laptops, and tablets. If they do not recognize or cannot operate these, we deprive society of the opportunity to ever digitize these processes.”
In Hungary, too, there are now several enforcement measures to link invoices and similar documents to one-way electronic channels. For this reason, it has become important to implement state-supported priority developments such as e-CMR, e-waybill and e-consignment note. Today, these are already being developed by start-up companies on behalf of the state. However, the various large logistics giants (see Waberer’s[3] or Trans-Sped[4]) are not so open to this. He added that the reason for the problem is that while in the case of one of the giant companies the technical background for these IT developments is provided by a start-up, in the case of online cooperation it is a partnership with one of the large mobile operators (e.g., Vodafone). It is important to point out that the lack of transparency makes the situation worse.
“The most significant problem to highlight in today’s world in terms of transportation by land, sea, and air, especially after the emergence of COVID, is that nothing is where and when it should be, which immediately raises further tasks to be solved and organizational processes.”
Ms. Makai believes that no matter what form of transportation is considered, there are problems in the post-epidemic period. There are no drivers; trucks are empty, entire fleets are deployed in parking lots; transport vehicles and equipment, containers are not where they should be in the world’s maritime circulation, where the goods to be transported are (e.g. containers in Asia are the goods to be transported in Europe, or vice versa); there are no sailors and port stevedores, or even if there are, they are mostly untrained and unqualified, which is why large European monstrous ports are periodically standing, even if it is important to see that 60% of transport is by sea. Air transport, air routes and aircrafts need immediate restructuring to cope with increased cargo traffic, free space for passenger aircraft is also needed to be included in freight transport; thus, these problems arise in sea and air transport; to maintain air-sea transport price levels, even forced shutdowns are needed to increase profitability, for example by taking transport vehicles out of service and be put into forced parking (e.g. Lufthansa fleet shutdown).
With this, a new the concept of “AV” (Autonomous Vehicle) appeared, which applies not only to passenger transportation but also to the examination of freight transportation, encompassing electric trucks and everything related to self-driving cargo vehicles. It is important to note that the United States alone invested $200 billion in researching and purchasing such technology. Additionally, it is important to examine electric trucks and transportation equipment, which can present more complex situations for today’s drivers.
Why is it important to mention this? According to Ms. Makai, the problem lies precisely in these seemingly unrelated issues. Because if we say autonomous trucks, our first question may not be about employment policy or the future of professions.
According to Mrs. Makai, the focus of the profession will shift to AV technology experts, who could be seen as energy engineers, utilizing AV-focused training in the future. She means that the truck driver of the future will face tasks such as flexible battery storage, charging, energy management, and adaptive capability to the changing energy environment.
Digitalization and its importance can also be seen in the transport industry’s workforce (such as ship crew and truck drivers), as they not only need to drive but also possess a “high degree of IT background.” According to Makai’s prediction, the truck driver of the future will not sit in a vehicle but will be able to remotely control 10-20 trucks or machines from an office or room. Many people laugh at this as a futuristic dream, but it is not that. Currently, logistics operations are already functioning within serious pilot projects both domestically (Audi, Knorr-Bremse) and abroad (USA, Sweden, China).
“This system is also used by Bosch, for example, which means in short that these e-vehicles travel from warehouse to warehouse, relatively speaking only on a flat road. So, you load it up, drive out onto the motorway and then drop it off at the warehouse. So, it’s going between the factory and the logistics centres (…) I’d say that in three to five years it’s going to be here on a daily basis.”
Similarly, in the examination of electric car usage, such as taxi transportation, it is important to consider that companies will have increasingly high expectations towards their drivers in the future. It will no longer be enough to have only an elementary education, but rather a more focused knowledge with complex educational training and background will be necessary. A 2017 published study, which deals with job changes and their significant impact, agrees with this opinion. It emphasizes the importance of retraining and the need for the evolving economy to consider other job positions and development structures.[5]
“If we take a short-term goal, then yes, the goal is to recruit drivers to drive. Because the current driver workforce is aging, they are retiring, and finding replacements is very difficult. Young people don’t really want to work in these jobs, partly due to financial limitations, partly due to lack of training.”
It is also important to examine how the already high labour shortage will be addressed. Makai highlights that in the current system, obtaining a driver’s license is a significant financial burden for young people, and the work associated with a wandering lifestyle far from home does not make it easier to expand the workforce. Several major companies provide funded training, but the prevailing financial and legal regulations do not always favour this.
Additionally, it is important to see that the long-term goal would be for the trained drivers to also understand how to use new equipment. As Makai emphasizes, the time frame is limited, putting the transformation of the Hungarian situation in this direction between 3-5 years. Therefore, the question of driverless driving is likely to rearrange logistics with a domino effect, with unforeseeable consequences.
“In fact, fleets of so-called driverless Uber (or similar services focusing on transportation) will appear shortly!”
Another problem that arises with autonomous driving is the disappearance of job positions/professions, such as the taxi driver position. After all, why pay a driver when self-driving technology can do it by itself? Also, this could lead to a decrease in commuting time, harmful fuel emissions, and the establishment of safer conditions. A 1% reduction in the accident rate in the US, for example, would result in an $8 billion cost reduction. Makai notes that this is likely to be a longer process, perhaps no more than 30 years, but it is still a significant amount of time. In terms of environmental protection, the elimination and landscaping of parking lots also improves the environment. Looking to the future, Makai envisions a significant transformation, and she considers the complete elimination of private car use to be possible. Similarly, the logistics industry is also evolving and if greater energy is not invested in robotics, significant problems will arise. However, with the development of robotics and artificial intelligence, the burden focused on logistics can be more balanced. As we have already mentioned, with the easing of burdens, transparency and profitability also can increase. To achieve this, the education method, which trains the future transportation staff, must be updated and supplemented within a tight deadline.
[1] “Present and Future – Snapshot of Freight Transportation on Land, Water, and Air”
[2] A tachograph is a sensor that records the distance travelled, speed, and the times at which vehicles start and stop. The tachograph is an effective way of recording driving, other work, standby and rest time.
[3] https://autopro.hu/szolgaltatok/informatikai-fejlesztest-hajt-vegre-a-waberers/656069
[4]https://www.vg.hu/vilaggazdasag-magyar-gazdasag/2022/05/szoftver-ugyesiti-a-trans-sped-soforjeit
[5] Union of Concerned Scientists. Maximizing the Benefits of Self-Driving Vehicles: Principles for Public Policy. Union of Concerned Scientists, 2017. JSTOR, http://www.jstor.org/stable/resrep17299. Accessed 24 Apr. 2023.