News

NOVEMBER 2021

Driven to Distractions

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During the past twelve months, any business that has a need for making, moving and delivering product has been constantly amazed at how many obstacles, risks and challenges have arisen out of nowhere or been slipped across as a “business issue” by our current government!

Now Logistics is an industry that loves a challenge, but it is also an industry that operates on tight margins so the ability to absorb what for the most part are straightforward cost increases are increasingly limited, despite excellent management teams that are constantly searching for service and cost improvement.

For our team here at ACS&T, we work primarily in cold storage (both warehousing and transport), and it is quite startling when you list the various impacts of the last few months plus the others that are becoming due in the near future:-

Already with us

1.       Driver shortage. Everyone has seen this in the news, and it remains a daily challenge as Businesses compete for the same pool of drivers for the foreseeable future. What does this mean? Well with drivers wages accounts for around 25% of vehicle operating costs then the common @30% increase in LGV1 wages has added 7.5% to typical transport costs

2.       Diesel costs.   Again, very topical with record high prices at the fuel pumps. In the last 12 months the price of diesel has risen by more than 16%, and this has added another 5.5% to typical transport costs

3.       Electricity. A much more recent challenge for any business with a heavy power consumption – and cold stores consume a significant amount of electricity! It is difficult to determine the impact at present, but some electricity tariffs are increasing by more than 30%


And still to come…

1.       Trailer refrigeration units. The legislation to ban the use of red diesel in trailer refrigeration from April 2022 in the short and medium term will require using the more expensive white diesel bearing in mind the life of a trailer fridge is around ten years. This typically will add around £5,000 per annum of operating cost to every temperature control trailer until new electric technology can be deployed

2.       Minimum Wage. The recently announced increase to the government minimum wage to £9.50 will have varying impact on Businesses, but at worst will increase labour costs by 6.6%

3.       Inflation. Widely forecast to reach somewhere around 4% by the end of 2021, which will add further pressure to wage reviews in 2022.


Here at ACS&T, we are not immune to these significant increases in costs as they affect all Logistics Businesses across the UK. However, in a year that has already been restricted by Covid 19, and labour shortages in a whole myriad of sectors ranging from butchers to fruit processors and  bus drivers to the NHS then it is quite possible that you are being driven to distraction in managing your own logistics costs and service to your essential customer base.

If that is the case then it is worth exploring how we can help through our shared user cold storage warehousing linked to our in-house transport operation that operates a small order groupage service that ensures customer small orders can be consolidated together and efficiently delivered on a single fully utilized vehicle. This way of working is hugely effective at minimizing the impact of all the above cost increases, and when linked to our full suite of added value services, provides a full and comprehensive one stop solution for all your cold storage and logistics needs.

If you are looking for a logistics partner that is large enough to deliver but small enough to care, then do contact Rebecca Stanewell on 07860 360200 and let us take away the distraction to allow you to focus on your customers.

Enquiries

Discuss your requirements with ACS&T

Call:
+ 44 (0) 1472 358207

Email:
info@acst.co.uk

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