Goran Aleksić: Global driver shortage drives us into the crisis

The lack of professional drivers is one of the biggest challenges for the transportation industry at the moment

We spoke with Goran Aleksic, general director of the road traffic business association „Srbijatransport“, about many challenges that harm industry and economy worldwide and reflected on Serbia.

Goran Aleksić, General Director of the Road Traffic Business Association Srbijatransport

What is the situation in road transportation in Serbia in brief?

The public road transport sector is the carrier of about 80% of the flow of goods in the physical and financial sense and in that sense has great importance for the economy, citizens and society as a whole, as users of services. Transport exists because of the users of the services and it is necessary to be economically and functionally efficient so that the users of the services have certain benefits, quality of business and quality of life.

The public road transport sector employs around 64,000 employees. Of which, 44,000 work in freight transport and around 20,000 in bus transport and achieve a total annual income of over 2,000,000,000 euros. They pay for customer service because the mobility of goods and passengers is vital. In this sense, the creating of a business environment that eliminates transport obstacles and creates conditions for efficient, functional, safe and economically sustainable operations of carriers is extremely important for the Republic of Serbia.

Serbian carriers in road transport have a number of problems that accumulate, and the state takes about 30% of the total income through various fees, excises, contributions and taxes. Gray economy, unfair competition, lack of drivers, detention at the borders and an unorganized business environment are the biggest problems for the quality of service and traffic safety. Serbia lacks a National Traffic and Transport Strategy that will define systemic and strategic solutions.

We saw the problems the UK faced after Brexit when they ran out of drivers. How pronounced is this problem in Serbia?

The shortage of professional drivers is one of the biggest challenges for the transportation industry at the moment, and will continue to affect transportation prices in the near future. The age structure of drivers is a concern as 34% of drivers are over 55 and young drivers under 30 represent less than 10%.

The technology of providing goods and passenger transport services in public road transport is not possible without professional drivers

Earnings of drivers in Serbia have increased significantly and are higher than in neighboring countries, working conditions have improved significantly, but we are far from being an attractive country for drivers from other countries. Serbia must solve its problem with very specific measures, by lowering the age limit for entering the profession in accordance with the solutions and good practice that, for example, applied in Germany, but also by better organization, efficiency and more rational use of transport resources and arrangement of the business environment, while lowering costs, taxes and levies for public road transport.

What is the real reason for the driver shortage?

For years, the production of new professional drivers in road transport has been decreasing. With the abolition of regular military service, the Serbian Army no longer trains drivers; since 2009, the age limit for entering the profession has been raised, so now in Serbia you can only take the bus driver test at the age of 24; the adoption of the law on the working hours of vehicle crews limited the engagement of drivers, so since then more drivers are needed to perform the same job; significant departure for better earnings of drivers to EU countries and finally, with the implementation of CPC (Professional Competence) for drivers, initial training is expensive and high costs of periodic training for professional drivers have been introduced every year. At the same time, there is an obvious demographic problem, the reduction of the working-age population, and not enough drivers are being trained through high schools, which are needed by the Serbian economy, and the problems are growing every day.

The fact is that the economic growth in Serbia is obvious, new production capacities are being opened, Serbia is being built, unemployment is decreasing and demands for transport are increasing significantly. Regional cooperation processes, the Open Balkans, as well as encouraging economic cooperation with the EU and other countries in the world, is a significant factor in encouraging the flow of goods and mobility of the population, and thus increasing the demand for transport services.

At the same time, we are witnessing various processes and circumstances in Europe and the world, in countries that have a higher standard of living and where the lack of qualified labor is a problem. This leads to significant processes of labor migration, including the departure of workers from Serbia. The earnings of employed professional drivers have increased significantly in previous years, even above the business opportunities of employers, but Serbia must certainly find other, own solutions that must provide this very important business resource for the functional sustainability of transport in the interest of its own economy and citizens as service users.

Does this problem affect traffic safety since due to lack of manpower we have professional bus and truck drivers who are now working and should have retired?

In Serbia, about 170.000 professional drivers are registered with the traffic safety agency, but a significant number of them do not work as drivers or have gone to work in EU countries, America or Canada. Estimates are that our economy lacks about 12.000 drivers, which is slightly less than 10% of drivers permanently engaged at work.

This is an extremely large amount for our economy, which has led to a significant drop in the supply of quality labor, intensive turnover of workers, lowering the quality of service, and which further cause an increase in the operating costs of carriers and greater risks for traffic safety. In order for employers to overcome, for them, a huge problem, they hire pensioners and tolerate the mistakes of employed drivers, increase wages and thus, now, for the relatively low quality of the workforce, high wages are paid, which are more than a significant number of highly educated educational and medical workers in Serbia.

The cost of transportation is evident and is paid by the consumer through the price of the product or service

The technology of providing goods and passenger transport services in public road transport is not possible without professional drivers, as an important and now irreplaceable resource of the transport economy. The Government of the Republic of Serbia must adopt urgent concrete plans, adopt strategic systemic measures and undertake activities in order to ensure more favorable conditions for access to the profession and education, thereby improving the quantity and quality of production and labor supply of professional drivers on the market.

How do you explain the situation that professional drivers today have a higher salary than university professors and doctors, and yet even that is not enough for them to stay in Serbia and go abroad?

Countries with developed economies have greater capacity to attract the missing labor force, especially professional drivers in road transport as a priority professional resource for society, so the borders are open and the selection criteria for professional labor needed by the economies of these countries are lowered. There are organized campaigns, young people are recommended to engage in these jobs, various incentive activities are undertaken, such as minimum wage limit measures. Thus, the Government of the Republic of Germany made a decision that from October 2022 the minimum wage for all professional drivers working in Germany is 12 euros and it applies to German companies but also to all foreign carriers who drive on the territory of Germany.

Bearing in mind that the EU countries have a significantly greater capacity to attract workers, our country must create and combine various solutions in its own interest, which mainly rely on regional connections, own resources and potentials, along with arrangements for a business environment that encourages economically sustainable public transport.

Given the rising inflation and the energy crisis, can we expect an increase in transport prices? How much does the price of passenger and goods transportation affect the growth of prices of goods and services?

The crisis and disruptions in the world economy have started since 2008. Since then, there have been successive events that deepen this kind of crisis (wars, droughts, pandemics, migrations…). We must not lose sight of the position of Serbia and what kind of processes the society and the economy went through for 2 decades before 2008 (hyperinflation, rations, restructuring, bombing, privatization…). At the same time, Serbia is in the constant center of attention and attempts to influence various countries and economies, but despite everything, in the last 10 years, the constant growth of the economy, the rise of social standards and the improvement of the quality of life of citizens have been evident.

The current inflation in Europe and the processes that have caused disruptions in the economies, including the lack of gas and energy products, have led to an increase in the prices of gas and Eurodiesel fuel in Europe and thus in Serbia. Rising energy prices and rising interest rates, on the one hand, the growth of industrial production and the construction industry, which boosts the volume of requests for transport services, on the other hand, along with the intensive growth of professional drivers’ wages, have led to disruptions in the structure of business costs, disruptions in cash flows and uncertain operations of carriers.

Transport has a large and multiple functional and economic impact on the price of products. The cost of transportation is evident and is paid by the consumer through the price of the product or service. European economies pay special attention to public transport through a defined lower level of excise duties and taxes for Eurodiesel, by suppressing the gray economy and unfair competition, by subsidizing the business of especially bus carriers and creating a competitive business environment in the interest of their economies and the roots of transport services.

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