Vehicle delivery and collection charges face 20% rise
The cost of collecting and delivering vehicles could increase by up to 20% across the sector says Birmingham-based national vehicle movement and inspection firm DMN Logistics
Compounding the prospect of cost rises, the driver shortage and lack of stock is also likely to increase lead times, severely affecting SLA performance targets and continuing to have a major impact on the vehicle logistics and the wider automotive sector into Quarter 4 and Q1 2022.
Latest DMN Logistics data also 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.
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.”
Stock volume shortages are resulting in higher incidences of empty running or reduced volume capacity on multi-deck transporters, 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.
Demand for car and van drivers in the home delivery sector with offers of regular hours, local work as well as the well-documented shortage of HGV drivers will continue to hamper the movement of new and used vehicles.
Nick adds: “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.”