This week:
Truck driver shortage in Europe and US, and what opportunity the nerds would love to back with a great founder team
Freight rates dropped 80-85% since peak 2022, and what it means for logistics and ops-heavy founder teams in construction and the built world
Bricklaying, shortage of skilled blue-collar bricklayers, and how robotics is about to solve it in Europe and some US markets
Why construction (and ConTech) is NOT a cyclical asset class, while PropTech actually is cyclical
Secondary-buying strategies of some top-tier multi-stage funds, and why it signals that we're at the bottom of the venture market correction
Severe trucker shortage
Truck driver shortage in Europe is 460,000 today and expected to rise to 1.5 million by 2030, severely impacting construction and infrastructure. The shortage is already 10% in the UK, with 40% of truck driving jobs unfilled across the EU. The average age of drivers is close to 50, with 25% above 55, meaning a significant part of the workforce will retire in the next decade. This constrains material transport for construction projects. As Patric says, "By 2030, we're missing 1.5 million truck drivers."
Plummeting freight rates
Ocean freight rates have fallen 80-85% in last 10 months, presenting challenges for logistics companies and opportunities to rebuild cross-border supply chains. The dramatic decrease impacts anyone moving goods globally, essentially shrinking revenues for companies shipping the same volume of containers. However, the decline signals we may be at the bottom of the economic cycle, presenting opportunities for rebuilding more resilient cross-border supply chain models. As Shubhankar notes, "If you are a business involved in moving 100 containers back in April 2022, and you're still moving 100 containers...you have basically shrunk 85%."
Bricklayer shortage
Bricklayer shortage in the UK is 15,000 out of 75,000 needed, limiting home construction; average bricklayer age is around 50. The UK requires 150 million bricks laid per year for homes and commercial buildings. But with 36% of bricklaying jobs unfilled and 2000 new bricklayers annually, not enough homes can be built to meet demand. An aging workforce exacerbates the problem. Patric explains, "That's a lot of homes you can't build because you're short 15,000 people, just in the UK."
Acquisitions at cycle bottom
Secondary buyers are acquiring venture-backed construction tech companies at 30-40% discounts, suggesting we may be at the bottom of the cycle. Established macro funds making these deals implies sophisticated investors see opportunities at a market bottom. Founders of strong construction tech firms could see this demand as validation, while less promising companies may face reevaluation. As Patric says, "I take the secondary bias behavior as a data point that we're in the middle of the bottom and that the cycle has ended."
Skilling over robotics
For construction tech opportunities involving emerging market labor, skilling should take priority over robotics in these markets to improve productivity. Surplus low-skilled labor leads to poor specialization and execution. Targeted training programs to create a smaller, highly skilled workforce could boost capabilities beyond just adding more workers. Shubhankar explains, "I think because there's such a large labor surplus in markets like India...the way you improve your ability to earn is you don't present yourself just as a bricklayer."
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Keywords: truck driver shortage, construction logistics, infrastructure projects, EU trucking, ocean freight rates, supply chain disruption, global logistics, economic cycles, construction tech acquisitions, venture capital, secondary buyers, construction labor shortage, bricklayer shortage, UK construction, housing demand, construction skills training, emerging markets, workforce development, construction technology