What the UK fuel shortage signals about the British economy.

While the world is grappling with supply chain issues brought on by COVID-19, the situation in the UK is being compounded by the continued fallout from Brexit.

Currently, the UK is struggling to fill thousands of jobs that were previously held by citizens of the EU. In particular, Brexit has contributed to an already challenging shortage of truck drivers, which has resulted in items disappearing from menus and grocery store shelves going empty, among other problems.

But, it is the subsequent fuel shortage that is garnering international attention. While there is plenty of fuel at UK refineries and ports, without tanker drivers, it cannot get to the pump. This is worsened by a surge of panic buying by British citizens, and an image of a man pulling a knife on someone who cut him in the petrol line has become a viral symbol of the country’s struggles.

As a short-term remedy, the British government announced that it would issue 5,000 temporary work visas for foreign drivers, which would expire on Christmas Eve. British troops are also on standby to step in and make deliveries. However, as the UK is currently down about 100,000 drivers, this move is seen by many as merely a drop in the bucket.

Along with the small number of visas, there is skepticism over whether European drivers would be willing to take advantage of them, citing low pay and unpleasant working conditions in the country. Some also harbor resentment for Brexit.

Pressure is mounting for the British government to rectify this situation before the holiday season to ensure that retail isn’t the next pileup — not to mention British families. The administration has already issued another 5,500 temporary visas for poultry workers to try and stave off a shortage of holiday turkeys.

Unfortunately, when it comes to recruiting new drivers, that deadline is looking less and less possible. All big rigs require specialized training, and tankers even more. So, while Britain’s Department for Education has announced its readiness to spend $15 million to create skills boot camps for 3,000 new drivers, this training typically takes about twelve weeks. Meaning, if those workshops began today, the drivers would be ready to hit the road just in time for the new year.

Along with causing massive supply chain issues, this situation is highlighting vulnerabilities in the post-Brexit British economy — though, the change in consumer behavior during COVID-19 may have helped mask them until now.

But, trucking was certainly not the only industry to lose a significant percentage of its workforce to Brexit. Once the pandemic wanes, and shopping, dining, and travel behaviors return to normal, the tourism, construction, and automotive industries could face similar challenges.

The British government needs to act fast to right this ship, and avoid any others going off course.

Danilo Diazgranados is an independent investor in the global food and wine, financial services, real estate, and the hospitality sectors.

Investor in and lover of fine wine and restaurants.