Last reviewed 13 May 2022
According to a new survey, 71% of UK logistics companies reported an escalation in the cost of transporting goods during the first quarter (Q1) of 2022 compared to the same period a year ago.
Amid sharp increases in the cost of fuel and other global supply chain pressures, 40% of respondents to the Logistics UK survey said that costs had climbed by 25% or more. All 241 respondents reported a rise in fuel costs.
Sarah Watkins, Deputy Director of Policy Information at Logistics UK, said: “The cost to transport goods is surging at an unprecedented rate amid significant increases in the cost of fuel. The sheer numbers of logistics companies reporting increases in both freight rates and the costs to move goods suggests rising prices are deeply embedded and are unlikely to subside in the coming weeks.”
Logistics UK has warned that these costs are feeding through to freight rates — the price charged to move goods — particularly cargo transported by air and road to outside the UK.
More than 60% of respondents to the survey said both air and international road freight rates had increased substantially, while at least half said the same applied to freight rates for transporting goods by sea, domestic roads and rail.
Bulk diesel prices, which constitute about 30% of the cost to operate a vehicle, have risen by 35.7% to average 129.03 pence per litre in Q1 2022 when compared with Q1 2021 (price excluding VAT).
The sector is particularly reliant on diesel, Ms Watkins pointed out, the cost of which is likely to remain elevated even as the cost of other fuels subside.
She concluded, “Activity in the logistics sector is a reliable leading indicator for the broader economy and [this] survey reveals worrying signs. More than a third of our respondents say orders are declining, likely as a result of both rising freight costs and as consumers cut back amid a broader cost of living squeeze.”