Vehicle delivery and collection charges face 20% price hike
Prices for vehicle delivery and collections could increase by up to 20% as a result of the driver shortage and the semiconductor supply crunch.
That’s according to Birmingham-based national vehicle movement and inspection firm DMN Logistics, which says lead times are also likely to increase.
Its latest data suggests that average journey mileage to purchase stock has increased by 12% between Q1 to Q3 as buyers look for new ways to buy stock and maximise driver efficiency.
And the stock shortages are also leading to higher incidences of empty running or reduced volume capacity on multi-deck transporters, as well as additional drops by multi-deck transporters to fill the load capacity, and increased use of public transport and runner vehicles by trade plate companies to reposition the workforce.
Nick Chadaway, managing director of DMN Logistics, said: “The logistics market price point will need to shift to support the measures that the industry must implement if it is to sustain the volume requirements of the sector. Our view is that a price re-alignment of anywhere between 10-20% is likely to ensure continuity and the quality of service levels.
“We believe some of the pressure points affecting the sector will continue past the first quarter of 2022 and will not start to ease until we see the return to normal levels of new car and van availability. This should start to rebalance market volumes across all sectors, but not overnight and this may take all of 2022 to achieve.”
Chadaway added that 2022 will bring a new set of challenges when vehicle supply issues are resolved as the pressure will shift from lack of volume to capacity issues.
“There will continue to be a shortage of available resources and skills to support the increase in volumes, especially in the larger, heavy vehicle space. We estimate there is currently a 10-15% resource gap, and this will grow exponentially as volumes start to return.
“As a result of the cumulative impact, some providers will review their market position or pull out of the sector completely,” he warned.