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The philanthropist urges world leaders to increase spending to improve preparedness for health threats

A team of international experts ranging from epidemiologists to computer modellers should be created to quickly identify global health threats and improve co-ordination between countries, Bill Gates has said, warning that greater investment is needed to avoid another pandemic.

The Microsoft founder and philanthropist, who in 2015 first cautioned publicly that the world was not ready for the inevitable next pandemic, said his proposed Global Epidemic Response and Mobilization initiative should be managed by the World Health Organization.

As the war in Ukraine dominates the international agenda, Gates urged global leaders not to lose sight of the health crisis. He called for greater investment to prevent future pandemics. “It seems wild to me that we could fail to look at this tragedy and not, on behalf of the citizens of the world, make these investments,” Gates told the Financial Times.

More than 6.2mn worldwide are estimated to have died from Covid-19 since late January 2020, shortly before the WHO declared the outbreak a Public Health Emergency of International Concern.

He acknowledged there were questions over whether an international consensus could be reached to increase funding for WHO, which he believed was the only body that could build and manage the “top-notch” GERM team for which the running costs, he estimated, would be around $1bn a year.

“The amount of money involved is very small compared to the benefit and it will be a test: can global institutions take on new responsibilities in an excellent way, even in a time period where US-China [relations are] tough, US-Russia is extremely tough?” said Gates


Bill Gates © POOL/AFP via Getty Images
The WHO had “less than 10 full-time people” working on outbreak preparedness, said Gates, adding that “even those people are distracted with many other activities”.

“The current WHO funding is not at all serious about pandemics,” he said.

Gates, who argued that there was an urgent need for longer-lasting vaccines that blocked infection, stressed that the current pandemic still posed a threat.

“We’re still at risk of this pandemic generating a variant that would be even more transmissive and even more fatal,” he said. “It’s not likely, I don’t want to be a voice of doom and gloom, but it’s way above a 5 per cent risk that this pandemic, we haven’t even seen the worst of it.”

Gates, whose book How to Prevent the Next Pandemic is published on Tuesday, expressed his hope that the UK would not further reduce its contribution to foreign aid funding, suggesting this could lead to other nations engaging in their own retrenchment which could jeopardise key global public health programmes.

The UK’s decision last year to reduce its annual aid budget from 0.7 per cent, to 0.5 per cent, of gross national income was “a disappointment”. It meant areas such as polio and reproductive health had been cut.

“We’re down to the bare minimum, and if the UK cuts more, then others will do as well,” said Gates. “That would be tragic because . . . all that money saves lives for less than $1,000 per life saved.”

He said the UK remained a big donor to the vaccine alliance Gavi and the Global Fund to Fight AIDS, Tuberculosis and Malaria.

Workers are back on the road but the industry is suffering from a lack of trailers and trucks

Haulage companies that spent last year battling to hire drivers now have a new problem: a shortage of trucks.

On both sides of the Atlantic, rising wages have helped lure workers back on the road after a lack of drivers strained the industry to breaking point, leaving shipping containers stranded at ports on the US west coast and petrol pumps running dry on British forecourts.

But a longstanding shortfall of equipment — due originally to coronavirus restrictions and chip shortages — is becoming more severe as Russia’s invasion of Ukraine shuts down the supply of key components and Chinese lockdowns threaten further turmoil in global supply chains.

“The driver has been the biggest constraint of the last two years . . . The bigger supply constraint now is the truck, and to some extent the trailer,” said Tim Denoyer, analyst at Indiana-based ACT Research.

Rico Luman, an economist at ING, said some European truckmakers were taking no more orders because their backlogs were already long, while others could not quote a price because they were unsure of the cost of raw materials for vehicles that might be delivered “far into” next year.

“Trucks one to two-years-old are almost the same price as new ones at the moment: there is no option B to get spare capacity,” Luman said.

We are struggling to keep the UK fleet on the road,” said Kieran Smith, chief executive of the recruitment agency Driver Require, who said vehicle availability at the operators with which he works had dropped noticeably because of a lack of spare parts.

Higher pay — wages across the industry rose about 25-30 per cent over the past year, according to Denoyer — and the easing of the Omicron coronavirus wave has alleviated worker shortages in the US.

The wave of new workers, meanwhile, has helped cap costs for companies transporting their goods by truck. US dry-van spot rates, excluding fuel, fell abruptly in March and are down more than a third since the start of the year.

The picture is similar in the UK, where industry associations say driver shortages have eased as pay has improved, testing for HGV licences resumed and large-scale government-backed training schemes got under way.

“A year ago we were bleeding drivers all over as a result of Covid,” said Rod McKenzie, head of policy at the Road Haulage Association. “Now things are really easing.” McKenzie estimated a shortfall of 100,000 drivers had dropped to about 65,000.

Luis Gomez, president of XPO Logistics Europe, said vacancies in the company’s UK business had fallen and wages had stabilised across the industry, with job applicants giving priority to shift patterns that offered a better work-life balance over large pay packets.

Paul Day, chief executive of Turners Soham, a Cambridgeshire based trucking and warehousing company, said the UK market was “close to equilibrium” between the number of drivers and the amount of work, with wages in his own business up about 15-20 per cent year on year.

But he and others believe the haulage industry is able to cope chiefly because rising prices for goods, combined with bottlenecks in manufacturing, have taken the edge off demand.

“We’ve avoided the worst because ironically the economy slowed down,” said Day, who said the volume of goods moved by supermarkets had tailed off, although demand in construction was still solid.

Ken Hoexter, an analyst at Bank of America, said shippers in the US were also reporting weaker demand as fuel prices soared and manufacturers had less work to do on rebuilding their inventories, which dropped to low levels during the pandemic.

However, the industry remains fragile. Although hauliers generally pass on changes in fuel prices, they face cost pressures for other raw materials. The price of Ad Blue, an anti-pollutant used in diesel engines, has quadrupled because its key ingredient is sourced from Russia, said Day. Small operators caught in drawn-out negotiations with customers could swiftly run into cash flow difficulties.

Though the driver shortage is less acute, the industry has not solved endemic problems with recruitment and retention of an ageing workforce.

“We’re in the slower part of [the] year . . . and we’re operating close to the edge,” Smith said, adding that conditions could worsen as demand picked up during the traditionally busier summer months. “It will be really tight . . . We’re not far away from another shortage.”

Russia’s war in Ukraine has led several European countries such as France, Germany, and Sweden to reassess their defense budgets. War on their doorstep has proved to be a wake-up call for public spending in areas that have fallen down the priority list.

While the geopolitical outlook remains uncertain, defense and aerospace companies like Thales (ticker: HO.France) could see a revenue boost. Shares have risen about 65% this year to a recent price of 123.30 euros ($132.40), but there’s room for more gains, according to several analysts who recently reaffirmed or launched bullish ratings on the French company.

“The stars continue to be well aligned for Thales, with all divisions showing upside from the current levels” and defense stocks set to outperform for years, says Christophe Menard, a Deutsche Bank analyst. Menard on April 12 raised his price target on Thales to €137 from €110 while maintaining a Buy rating.

The acceleration of the French defense budget will be the main short-term catalyst for Thales, according to Jefferies analyst Chloe Lemarie, who has a Buy rating on the stock with a €133 price target. Emmanuel Macron, who on April 24 defeated far-right rival Marine Le Pen to be re-elected president of France, has pledged to increase military spending to €50 billion from €41 billion by 2025.

On top of military spending, Lemarie sees an array of potential upside for Thales. These include exports of its Dassault Rafale jet fighter to the United Arab Emirates and an additional six for Greece. Thales should also benefit from an announced contract with Canadian satellite operator Telesat to manufacture 298 satellites for a broadband network in low-Earth orbit.

Thales, which is 25% owned by the French state and 24% by defense group Dassault, is Europe’s largest defense electronics company, valued at €26 billion. Its systems range from radar to rail, and biometric sensors to satellites.

Thales came under pressure at the start of the pandemic in April 2020, cutting its dividend and suspending profit guidance. At the time, the group predicted a progressive recovery in most businesses, and that appears to have happened. Operating profit for 2021 rose to €1.649 billion on sales of €16.2 billion, up 5.3%. New orders rose 18% in 2021 to €19.9 billion, outpacing sales. Thales expects this to be repeated in 2022.

Thales stock has risen 44.67% over the past year. The company fetches 17.5 times this year’s expected earnings, compared with rival Raytheon Technologies (RTX), which trades at 20.98 times, and Boeing (BA), at 62.66 times.

Investors have stayed away from defense companies in recent years, instead choosing stocks with stronger environmental, social, and governance, or ESG, profiles. But the threat of war in Europe has made some investors reconsider the social value of defense companies, giving them surprising ESG credentials.

Sweden’s SEB Investment Management recently reversed its year-old policy of banning defense stocks, saying that beginning in April, it would allow six of its more than 100 funds to invest in companies that generate more than 5% of their revenue from defense.

Still, some analysts see risks. Thales’ organic growth plans might disappoint, and Citi analysts say the group could get distracted by plans to hunt for acquisitions. CEO Patrice Caine last month said Thales is interested in making bolt-on acquisitions of companies with an enterprise value of up to €500 million across its three core areas of aerospace, defense and security, and digital identity and security.

If Thales sticks to these parameters to find profitable growth opportunities, investors could be in for further gains.