Calais crisis: freight costs could rise 'significantly'

16 August 2015

Unless the ongoing crisis at Calais is resolved, freight prices could rise significantly in the next few weeks according to Rhenus Logistics UK.

The company said the operational impact that French strikers and migrant incursions at the port were having on the UK's import and export trade was concerning.

Managing director David Williams said drivers were resigning from the route due to the stress of getting through the port, and the risk of fines because of stowaways.

“The decision by drivers to step away from this route has already seen a number of freight businesses introducing surcharges of between 1-2 per cent,” he said. “The rise in costs, due to increased fuel bills, man hours and required rest break, is now becoming a very serious issue for the logistics industry.”

Rhenus said it had so far resisted passing on extra costs to customers but said it could not continue to soak up additional operating costs for much longer.

“Without a rapid and practical conclusion to this situation, unavoidable freight prices will rise across the board,” Williams said.

Separately, global supply chain consultancy Crimson & Co warned that the continuing disruption at Calais highlighted the need for UK businesses to review their risk strategies.

The firm said exporters and importers across the UK were reporting losses and were being forced to either find alternative but more expensive routes or stop deliveries altogether.

Nick Miller, head of FMCG at Crimson & Co said that the chaos at Calais was making businesses “wake up to the realities” of modern freight transportation and the necessity of implementing a thorough risk strategy.

“It seems that a lot of UK exporters and importers have ignored this vital management practice likely due to the associated costs this incorporates,” Miller said. “However, when you consider this in context of recent events and the disruption to your supply chain, then time and time again it proves to be money well spent.”

Comparing the situation to recent port disruption on the West Coast of the US caused by industrial action, Miller said: “US based importers and exporters have been forced to adopt a multi-channel delivery strategy, using a variety of ports to ease congestion during any disturbances. While this strategy is undoubtedly more expensive, it dramatically reduces a company’s risk. UK businesses ought to take heed."

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