Gas crisis, labor shortages and supply chain chaos: Post-Brexit Britain faces a difficult winter

Published

3 years ago

October 18, 2021

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Empty shelves that usually stock bottled water at Sainsbury’s supermarket, Greenwich Peninsular, on September 19, 2021 in London, England.

Chris J Ratcliffe | Getty Images

The U.K. has emerged from the Covid-19 pandemic to find itself faced with an onslaught of new economic crises that have left the country in “a precarious position,” experts have warned.

A perfect storm of labor shortages, skyrocketing natural gas prices and global supply chain constraints have put the country in prime position for a difficult winter. Rising demand as economies reopen has created similar problems all over the world, but economists argue that Brexit has exacerbated these issues for Britain.

Labor shortages

A lack of workers is affecting a slew of industries across the country.

Britain has an estimated shortage of 100,000 truck drivers, which haulage organizations have largely attributed to a post-Brexit exodus of EU nationals. The lack of truck drivers has disrupted deliveries, leading to empty store shelves, backlogs at ports and dry gas stations, which sparked a panic buying frenzy in September that lasted weeks.

Other sectors have also warned of deepening labor shortages that are expected to damage the availability and price of goods in the runup to Christmas.

Britain’s National Pig Association has warned that up to 120,000 pigs face being culled within weeks because of a lack of butchers and abattoir workers.

In a statement on Friday, the vice president of the U.K.’s National Union of Farmers said labor shortages across the food supply chain remained acute, while the CEO of the U.K. Warehousing Association said in September that industries including warehousing, engineering and transport were all experiencing severe worker shortages.

At the end of September, the Confederation of British Industry — which represents 190,000 businesses — said its latest data showed 70% of companies were planning pay rises in a bid to tackle labor shortages.

The U.K. government has issued thousands of temporary visas for truck drivers, butchers and agricultural workers, but some critics have argued that this is insufficient to lure foreign workers.

Risk to future growth

Riccardo Crescenzi, a professor of economic geography at the London School of Economics, expressed some skepticism about the solutions being offered by the government.

“Offering three-month [visas] might not work while the rest of the EU is booming because of the injection of resources allowed for its recovery plan,” he told CNBC in a phone call. “And there is not really an unemployment problem in the U.K., so I struggle to see where drivers would come from in the domestic economy.”

Crescenzi said it was hard to know if the issues were temporary. “Some of these shortages could become structural, and this is a problem that can seriously constrain future growth.”

Sam Roscoe, senior associate professor in operations and supply chain management at the University of Sussex, warned that shortages would persist in the U.K. unless there were fundamental changes to the country’s immigration system.

“Brexit was sold as a vote on immigration independence, the U.K. labor market and making sure that everybody in the U.K. had jobs to go to, but the issue is we have 5% unemployment,” he said via telephone. “We’ve lost access to 27 member countries and the labor pool that was once available there, especially in terms of so-called low-skilled labor. I think that definitely puts us in a precarious position.”

Roscoe said it would take years to get enough Brits trained and licensed to drive heavy goods vehicles. “In the meantime, the reality is we’re going to have labor shortages unless the visa rules change.”

Spending power threatened

In a note on Thursday, Credit Suisse economists warned that U.K. consumers “face headwinds in the next few months,” including elevated inflation, supply shortages and the tightening of monetary policy.

“We think real disposable incomes for the U.K. consumer can fall by about 1.5% in 2022, the biggest fall since 2011,” the note’s authors predicted.

Helen Dickinson, head of the British Retail Consortium, told ITV News Thursday that three in five CEOs said they would have to raise prices by the end of the year due to supply chain problems. Some 10% said they had already done so.

Charalambos Pissouros, head of research at JFD Group, said he believed panic buying and supply shortages in the U.K. might also impact spending power by damaging sterling’s value.

“I see the risk surrounding the future of the British pound as tilted to the downside,” he told CNBC. “How severe any further tumble may be depends on how long the situation stays unresolved. Quick responses like the involvement of the British military could restore economic performance sooner than thought and halt sterling’s fall, and this could also allow the Bank of England to proceed freely with its tightening plans.”

Government response to crises ‘alarming’

It comes as Britain also faces an energy crisis. Several U.K. energy suppliers have collapsed since September as wholesale gas prices climbed to record highs. While the problem has affected markets worldwide, the U.K. is particularly vulnerable because of its reliance on gas; more than 22 million households are connected to the British gas grid.

Meanwhile in Europe — which is also battling rising prices — the European Commission on Wednesday published a “toolbox” that member states could use “to address the immediate impact of current [gas] price increases, and further strengthen resilience against future shocks.”

Crescenzi told CNBC that the EU can count on the strength of its single market, “which means global shocks like the gas price crisis can be dealt with more effectively with significantly more room for manoeuvre.”

“Following Brexit, the U.K. could still coordinate its response to the crisis with its most important trade and investment partner to ensure the best possible protection for its firms and citizens,” he added. “However, measures put out by the U.K. government remain unclear, let alone a strategy to coordinate with external partners. This is alarming.”

EU-U.K. relations have been under strain in recent weeks amid disputes over the Northern Ireland protocol, a special trade deal introduced to avoid a hard border between Northern Ireland and the Republic of Ireland. Officials have publicly argued on Twitter over the proposals — dubbed the “biggest source of mistrust” between both sides by U.K. Brexit Minister David Frost — and met to discuss proposed changes in Brussels on Friday.

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VW ID.4 now costs less than $200/month to lease

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6 hours ago

January 6, 2025

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VW ID.4 now costs less than 0/month to lease

VW-Rivian-US — 2024 Volkswagen ID.4 (Source: VW)

Volkswagen is advertising its 2024 ID.4 Standard at $999 down, $149/month for 24 months. That’s an average monthly lease cost of just $184/month plus tax and license, making it the cheapest of all January EV lease offers we’ve found.

We haven’t seen a great lease deal like this on a five-passenger electric SUV since last April, when Toyota slashed the average lease cost of its bZ4X XLE down to $191/month for 2023 model and $227/month for a 2024 model. In-stock bZ4X inventories were depleted in a few weeks, and dealers subsequently started to hike their asking prices as they collected deposits for ordered and in-transit vehicles. It stands to reason that the same phenomena could occur with this incredible ID.4 lease offer, so act quickly if you’re intrigued by this deal.

Equipped with a 62kWh battery and a single motor that drives the rear wheels, the ID.4 in Standard trim (MSRP $41,160) can travel 206 miles on a full charge and achieve 60mph from standstill in 7.3 seconds. Consumers that require more range or performance can opt for an array of higher trim levels, ranging from the ID.4 Pro RWD (291 miles, 0-60mph in 6.1 seconds, MSRP $46,300) to the top-of-the-line fully-equipped ID.4. Pro S AWD (263 miles, 0-60mph in 4.6 seconds, MSRP $55,300).

For those that prefer to buy rather than lease, Volkswagen is running a $10,500 Retail Customer Bonus Cash incentive on the ID.4 which means that the ID.4 Standard can be bought for just $30,660.

As far as dealer offers, a quick survey of a few VW dealers shows that VW of Thousand Oaks in southern California, VW of West Islip in New York and King VW in Maryland have dealer discounts of about $2000 that should stack on top of manufacturer incentives to lower the monthly cost of a lease or reduce the final price on a purchase.

We can help you find a great deal on an in-stock Volkswagen ID.4. Also, check our Electric Vehicle Price Guide and Electric Vehicle Lease Guide over the next week or two as we find the best dealer offers on EVs in the US.

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350 new Mercedes-Benz eCitaro electric buses headed to Hamburg

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11 hours ago

January 5, 2025

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350 new Mercedes-Benz eCitaro electric buses headed to Hamburg

Hamburg orders 350 electric Daimler buses

Hamburger Hochbahn AG operates the city of Hamburg’s bus system, and they’ve just placed an order with Daimler Buses for 350 fully electric Mercedes-Benz eCitaro buses to be delivered to the northern German city for use as zero-emission public transport.

Hamburger Hochbahn AG becomes the latest bus operator to put in a major order with Daimler – as I type this, fully 95 examples of the Mercedes-Benz eCitaro electric buse have already been deployed on the streets of Hamburg through Vhh.mobility, with both Mercedes and Vhh.mobility calling the bus fleet’s arrival a major step towards CO2-neutral local transport.

“I am very pleased that, together with vhh.mobility, we can make a significant contribution to emission-free local transport in the Hamburg metropolitan region,” says Till Oberwörder, CEO of Daimler Buses. “Our battery-electric eCitaro city bus offers an excellent overall package: The modern, long-range electric drive ensures that passengers reach their destinations quietly and locally CO₂-neutrally. Advanced assistance systems also increase safety in all road traffic conditions.”

When discussing their order, Hamburger Hochbahn AG representatives said they were particularly impressed by the low total cost of ownership (TCO) and the ease of maintenance offered by the Mercedes eCitaro electric bus over its service life.

The Mercedes eCitaro buses ship with 98 kWh battery packs, configured in either 294, 392, 490, or 588 kWh specifications, depending on what’s needed by the bus operator. Hamburger Hochbahn AG plans to convert its entire fleet to emission-free drive systems by 2030, and the company goes to great efforts to ensure that 100% of the energy it uses to charge those vehicles comes from sustainable and truly “green” sources.

Electrek’s Take

Daimler-Benz and Vhh.mobility executives at delivery of the 95th electric bus.

Replacing diesels with electric vehicles in heavily populated areas has solid, observable, measurable benefits – not just in terms of cost, but in terms of reducing surface-level air pollution and improving overall quality of life. There’s absolutely no way to continue to justify the use of diesel in urban transit, and it’s great to see that Hamburg agrees.

SOURCE | IMAGES: Daimler Trucks, via Power Progress.

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XCMG shows electric heavy equipment with BYD battery swap tech ahead of CES

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12 hours ago

January 5, 2025

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XCMG shows electric heavy equipment with BYD battery swap tech ahead of CES

Scale up on Green and Smart Mining in China: An Open Pit Mine in Inner-Mongolia Will Reduce 149,000 Tons of Carbon Emission

Electric equipment from XCMG can now be ordered with interchangeable battery swap tech, enabling heavy trucks and construction equipment to swap out their BYD-developed, 400 kWh battery packs in just three minutes, and top-off as quickly as diesel.

Xuzhou Construction Machinery Group Co., Ltd. (XCMG, for short) may not be a household name here in the US, but the Chinese multinational is the third largest manufacturer of construction machinery in the world – and, with the launch of a full line of heavy equipment featuring battery-swap technology, they’re making a case for becoming the number 1 HDEV manufacturer sooner than later.

And we’re not just talking about off-highway and heavy equipment – the XCMG’s swappable BYD batteries are making their way to on-road trucks as well … but we’ll get to that.

XCMG ZNK95 electric autonomous haul truck

Xuzhou Construction Machinery Group Co., Ltd. — XCMG autonomous ZNK95 truck and XE1600H hybrid excavator; via International Mining.

XCMG showed off its latest electric equipment at last month’s Bauma China show, including an updated version of its of its 85-ton autonomous electric mining truck. Known as the ZNK95 (above), the truck features a fully cab-less design – meaning there isn’t even a place for an operator to sit, let alone operate. That’s too bad, too, because what operator wouldn’t want to experience a dedicated permanent magnet synchronous electric drive system capable of putting out 800 kW (1070 hp) and 22,000 Nm (16,200 lb-ft) of torque?

But autonomous solutions aren’t about hp and torque – they’re about keeping operators out of extreme and dangerouns environments. To that end, XCMG says its new HDEVs are fully capable of operating in high-altitude, extremely cold environments with temperatures as low as -40°C (a temp. that most diesels wouldn’t be able to start at, let alone run).

Even in those extreme climates, the XCMG gets the job done with an autonomous driving system that integrates a number of multiple cutting-edge technologies that combine environmental perception, decision-making and planning, vehicle control, and communication into a single dashboard that can be monitored by the fleet manager.

The system can even diagnose faults on individual vehicles and bring them back to service before they break down in the field – a huge potential problem if a truck or dozer gets caught underground!

The ZNK95 has already been deployed at a large, open-pit mine in Inner-Mongolia, China, that has adopted a comprehensive unmanned and electrified construction solution from XCMG Machinery for its latest “green” mining operation. The company says the mine will emit 149,000 fewer tons of harmful carbon emissions than it would with diesel haul trucks annually by the time its full order of ZNK95s is delivered in 2026.

But wait, there’s more …

If you needed a reminder that China is light-years ahead of the US when it comes to electrification tech (and, yes, I know light-years measure distance and not time – grow up), you should know that XCMG’s swappable battery tech, which features 400 kWh packs using BYD blade-style battery cells packed at a facility that’s run as a JV between XCMG and BYD, is such a non-event in a country that’s seen millions of swaps that it didn’t even merit a press release at Bauma.

The trucks were just shown, and even that was after more than 1500 of the battery-swap capable MDEVs (XCMG’s new XG2 EX630S cabovers) was already delivered to customers in China and put into service.

In fact, the only reason I know about it at all was because I follow Etrucks New Zealand, an XCMG dealer, on LinkedIn, and he was talking it up.

“XCMG are by far the dominant EV exhibitor at Bauma Shanghai. Here a truck crane solution to swap construction machine batteries,” said Ross Linton, owner and President of Etrucks New Zealand. “Here a truck crane solution to swap construction machine batteries.”

XCMG battery swap crane

XCMG battery-swap vehicle; via Etrucks New Zealand.

I’ll be at CES next week, where I’m sure Caterpillar will be playing up its 100th anniversary, John Deere will once again show off a new, updated remote/autonomous solution, and Volvo will reveal another new addition to its HDEV line-up. None of them are likely to show up with a practical battery-swap EV solution that’s ready to deploy, today.

Instead, they’re all playing catch up – if they’re aware of XCMG at all.

SOURCES | IMAGES: Etrucks New Zealand, International Mining, USS.

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