In the first quarter of 2018, prices in the transport and logistics sector rose sharply. As staff and fuel costs also rose, entrepreneurs barely recorded more profits.
Less activity
This is according to the TLN Business Survey. The industry association speaks of a 'notable drop in activity'. The number of entrepreneurs reporting higher activity fell from 62 per cent in the last quarter of 2017 to 52 per cent in the first quarter of 2018. 12 per cent of entrepreneurs reported lower activity, down from 8 per cent in the last quarter of 2017. "Now, the first quarter of a year is always somewhat less busy than the last, but still, this can be called a notable drop," TLN states.
Increase in logistics price level
Entrepreneurs charged a higher amount for their services in the first quarter. Almost 70 per cent reported an increase in prices, while a scant 30 per cent said prices remained the same. Almost 1 per cent reported a decrease in prices. A similar increase in price levels did not occur for nine years, the industry association reported.
Read also: Logistics turnover growth lags behind SME average
Profits continue to lag behind
In that respect, the rise in profits is a setback. Entrepreneurs barely recorded higher profits in the first quarter of 2018. A scant 40 per cent reported that profits were higher than the last quarter of 2017. But a good 40 per cent reported that profits were flat and 20 per cent even reported a decline in profit levels. Yet this does not mean that entrepreneurs are now running at a loss. 72 per cent of entrepreneurs say they ended the quarter with a profit.
Higher wages and diesel price
The reason for lagging profits can be found in higher wages and the rising price of diesel. Since January 2018, new wages have applied in the transport and logistics sector. Average wage costs in 2018 would be 5.7 per cent higher than in 2017.
Diesel prices were also on the rise. This rise started back in 2017. The average price of a litre of diesel fell 2.5 per cent higher in the first quarter of 2018 than the year before. For the medium term, TLN advocates a switch to electrically powered vehicles and biofuels. Until then, entrepreneurs would do well to save on diesel.
