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Ireland cost pressures ‘unsustainable’ says FTAI report

[ December 1, 2021   //   ]

The average pay for commercial vehicle drivers increased by 13.4% in the first half of 2021 as a result of supply and demand pressures for skilled workers during the Covid-19 pandemic, according to The Manager’s Guide to Distribution Costs 2021.

The report, produced by FTA Ireland (FTAI) in partnership with Analytiqa, Harris Group, Enprova, and BWG Group, and supported by the Department of Transport, Tourism & Sport, provides detailed insight into how the costs of staffing, operating vehicles, and haulage rates have changed in the past year.  

FTAI chief executive Aidan Flynn, comments: “The report shows that employers are taking exceptional action to retain and attract drivers within their workforce but businesses must ensure that these pay increases are sustainable and are supported by changes in income models to compensate for the significant additional expense. With logistics businesses operating on such narrow margins (typically between 3% and 5%) rises of this type are unsustainable in the long term, without the additional cost being passed on to the customer.

“Despite uncertainty and a lack of clarity on the future fuel choices for HGVs, the report has revealed that more than 55% of respondents (up from 29.4% in last year’s report) are considering electrification as an option and 33% are considering either LNG (liquid natural gas) or CNG (compressed natural gas).”

For the first time, the report identified that users of alternatively fuelled vehicles are seeing on average a 5.1% cost saving over their traditionally fuelled vehicles. Business overhead costs increased by 2.5% on average, and average annual transport costs increased by 3.6%, with over 27% of respondents seeing more than 5% increase.

To download the report – which is free for FTAI members and non-members – visit https://www.ftai.ie/cost-of-distribution

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