2005

The Road Transport Directive (RTD) will affect all European supply chain professionals from March 2005 onwards. We explain what you need to know and how to be prepared.

What is the RTD?

The legislation will apply to all mobile workers who participate in road transport activities covered by the EU drivers’ hours rules (regulation 3820/85/EEC) except self-employed drivers who will be covered from 2009. The main changes will be: Weekly ‘working time’ is restricted to an average 48 hour week There is no ‘opt-out’ for individuals wishing to work longer than an average 48 hour week Night workers are limited to 10 hours work in each 24 hour period provided there is a workforce agreement Breaks—workers must have a break after six hours All employers will be required to maintain records to demonstrate compliance. If an employer cannot demonstrate compliance, member countries are required to introduce penalties.

Drivers’ weekly salaries before and after the RTD

Before RTD	After RTD
Basic hourly pay rate £6.50 per hour	Basic hourly pay rate £6.50 per hour
Average hours worked (per week) 57 hours	Average hours worked (per week) 48 hours
Total payable hours (40 + 17 hours x 1.5 overtime) 65.5 hours	Total payable hours (40 + 8 hours x 1.5 overtime) 52 hours
Total weekly (gross) pay £425.75	Total weekly (gross) pay £338.00

Industry impact

Manufacturing costs will increase in three areas: delivery of raw materials to sites, collecting finished goods and delivery of the goods to retail multiples, supermarkets or end-users. After the RTD, drivers will receive an average net pay reduction of £87.75 per week: a 21 per cent drop in salary. Since there is already a shortage of 45,000 drivers within the industry, this reduction in salary is likely to exacerbate this everworsening driver shortage. A recent survey by the UK Department for Transport suggests that the cost will be split between employers/employees on a 60/40 basis. However, with operators’ slim profit margins, Crown Computing expects costs will have to be passed onto customers.

What to do? Start planning!

To help businesses become compliant by March 2005, workforce management software provider Crown Computing and road transport employee relations consultants Peak Fusion, are working together to offer practical solutions to companies by assessing the impact of this directive on their business and helping them implement quality recording, analysis, management and compliance solutions. Nicholas Kay is corporate solutions manager at leading Workforce Management solutions provider Crown Computing. He has worked in the software industry for over 20 years and his experience of workforce management is considerable, having acquired and managed accounts at companies such as Argos, Exel and Salvesen, 3M and JVC.

Planning Tips from Crown Computing and Peak Fusion:

• Understand the new directive—further information can be found on www.dft.gov.uk or your country’s government transport website.
• Consider your strategy from a five-year planning context with priority on: safety legislation, customer sales, operational excellence (profits) and human resources.
• Become an ‘employer of choice’ by implementing the following initiatives: invest in driver training, ensure salaries are above the minimum wage, update the cab fleet and introduce incentive bonus systems and flexible working patterns.
• Increase and enhance your scheduling capability of lorries, routes and warehousing including managing seasonality through an extended reference period and annualised hours.
• Analyse and integrate your IT systems and eliminate ‘data islands’. Many businesses are administratively burdened with multiple systems, e.g., payroll, scheduling, absence, time and attendance, manufacturing and warehousing systems that do not share vital data.
• Analyse and update your records-keeping system to ensure adherence to the new directive—systems will need to include details on how your employees are complying with the 48-hour working week, tracking night hours, break times and new training requirements. To reduce the administrative burden, consider Crown Computing’s ‘Open Options - Workforce Management’ software.
• Lastly, consider the cost of inaction—either way your cost-base will increase, therefore planning is necessary to keep ahead of your competitors and avoid legislative penalties.

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