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 a report released by FTA Ireland (FTAI). Produced in partnership with Analytiqa, Harris Group, Enprova, and BWG Group, and supported by the Department of Transport, Tourism & Sport, The Manager’s Guide to Distribution Costs 2021 provides detailed insight into how the costs of staffing, operating vehicles, and haulage rates have changed in the past year.

Aidan Flynn, CEO of Logistics UK comments, “from adjusting to post-Brexit trading conditions and struggling to recruit the logistics workers they need, to having to account for rising fuel costs, businesses working within the freight distribution and logistics sector are operating in a challenging and uncertain environment. To stay resilient and profitable, businesses must have a comprehensive understanding of their day-to-day operational costs; this is critical to aid strategic thinking and planning processes. By surveying a vast array of managers working in logistics operations, road haulage, manufacturing and retailing, The Manager’s Guide to Distribution Costs 2021 provides a clear overview of average costs.”

Mr Flynn continues, “the report shows that employers are taking exceptional action to retain and attract drivers within their workforce – the average pay for commercial vehicle drivers increased by 13.4% in the first half of 2021 – 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.

Mr Flynn concludes, “businesses that seek to understand their costs, prioritise profit over turnover, and support good welfare practices and terms and conditions for their employees are more prepared for shocks to the environment in which they work. I encourage all managers working within the logistics and freight distribution sector to study the report’s findings to future-proof their operations for 2022 and beyond.”

The report was launched via a virtual briefing, which included a presentation by Hildegarde Naughton TD, the Minister of State in the Department of Transport. To download the report – which is free for FTAI members and non-members alike – please visit https://www.ftai.ie/cost-of-distribution

FTA Ireland is a not-for-profit membership trade association for the Irish freight, passenger and logistics industries. We are wholly owned and governed by our members, and act solely in advancing their best interests. FTA Ireland covers all aspects of private and public freight transport, passenger transport and logistics supply chain, including road, rail, sea and air. FTAI represents some of the largest freight and passenger operators in Ireland, with more than 25,000 employees and 10,000 vehicles operating between them.

Source: FTA Ireland