Road Transport overheads continue to increase for logistics businesses – FTAI Report

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Details from the fourth annual Freight Transport Association Ireland’s (FTAI) Manager’s Guide to Distribution Costs (MGDC) demonstrate the effects of the current economic crisis on industry, with transport overhead costs reported to have increased, on average, by 17.7% in the last year.

Published on 29 November 2022, the comprehensive report, launched by Minister of State at the Department of Transport, Hildegarde Naughton, at Bushwells Hotel, Dublin examines the impact of post-Brexit changing supply chain patterns, the financial consequences of the Covid-19 pandemic, and the impact of the war in Ukraine.

Commenting on the findings Aidan Flynn, CEO of FTA Ireland, said: “We are delighted to once again be publishing our Manager’s Guide to Distribution Costs, which is now in its fourth year. The report has established itself as the definitive guide for all those involved in the management, procurement, or ownership of freight transport services and is designed to provide logistics businesses with the data needed to build resilience.”

“Figures from this report demonstrate the true effects of external global factors on industry. Rising fuel costs continue to place an unsustainable financial burden on the sector, with fuel now accounting for 41% of total operating costs. Logistics businesses typically operate on narrow profit margins and the combination of these rising costs – along with maintenance costs which have, on average, increased by 11.9% – are cause for concern. The FTAI will continue to work collaboratively with stakeholders, members and Government to deliver solutions during these challenging times.”

Minister Naughton, stated during her address to the attendees: “The Government is acutely aware of the cost pressures experienced by the freight sector since the outbreak of the conflict in Ukraine. The Government has taken action to alleviate these pressures with several measures targeting increased energy costs – a reduction in excise on petrol and diesel introduced in March was recently extended out to end February 2023; over €15.5million was provided to more than 3,000 licensed haulage operators this year to support the liquidity of those businesses, the NORA levy will be reduced to offset a planned increase in the carbon tax in 2023 and two major business support schemes have been established – €200 million for the Ukraine Enterprise Crisis Scheme for businesses in manufacturing and internationally traded services and €1.25 billion for the Temporary Business Energy Support Scheme for businesses chargeable to tax under Case I trade or Case II profession. The Manager’s Guide to Distribution Costs is a vital reference document for all in the freight and logistics sector to benchmark costs and to plan for the future.”

On behalf on of the sponsors Owen Clifford, Head of Retail Sector, Bank of Ireland, added: “Bank of Ireland recognises the importance of this latest report issued by the FTAI.  In providing topical insights for the distribution and logistics sectors, it supports the growth and sustainability of these pivotal elements of the wider Irish business eco-system.”

To view a copy of this report, published in conjunction with Bank of Ireland, BWG, ENPROVA and specialist research agency Analytiqa, please visit: LR-FTAI-Managers-Guide-to-Distribution-Costs-Report-2022.pdf