Automotive logistics reeling from soaring costs
ECG, the Association of European Vehicle Logistics, has pointed out that the finished vehicle logistics (FVL) industry continues to face an unprecedented crisis with rising costs and dwindling capacities and volumes. In the maritime sector for instance, the time charter rates for pure car & truck carriers (PCTCs) have tripled in little over a year.
ECG recently surveyed its members to understand how capacity and costs have changed during the past two years. Specifically, the survey covered 2020 and 2021. According to the findings, more than half of the members, operating across all modes of transport (road, shipping, barge and rail), reported that capacity decreased during the past two years.
Furthermore, 91% of the respondents indicate that the main reason for these reductions is linked to material shortages (especially microchips) and the consequent volume reductions in the automotive sector rather than Covid and lockdowns. The weighted average reduction of capacity for the trucking companies that responded is 21%.
In addition, for shipping and barge companies, fuel costs went up by 60%. Wages, especially for drivers, have increased hugely in many regions with some operators awarding two or even three pay rises in a year in an attempt to retain staff. The picture depicted by the survey reinforces the need to adopt the five point action plan published by ECG in October 2021. (sh)