Road haulage bosses warn buckling supply chains will trigger soaring prices
The “perfect storm” of problems scuppering UK supply chains will increase prices sharply for households across the country, road haulage and food bosses have warned.
A paucity of HGV drivers, soaring shipping costs, delays in deliveries from Asia and ongoing Covid related problems have compounded to produce severe shortages of products.
Soaring demand as economies across the world emerge from Covid restrictions has put intense pressure on suppliers to ramp up production in a short space of time, prompting them to increase prices.
A lack of lorry drivers caused by high levels of EU nationals leaving the UK since Brexit and the onset of Covid has left the retail and health sectors short of stock.
Firms are hiking pay for HGV drivers in a bid to attract candidates, increasing the likelihood of businesses passing costs on to consumers to protect their margins.
Commodity and fuel prices have also surged, driven by global demand strengthening amid a receding pandemic.
Haulage bosses have described the issues as a “perfect storm” of events leading to supply chains to snarl up.
Richard Harrow, CEO of the British Frozen Food Federation, said: “All the factors are going in the wrong direction for consumers – commodity costs, labour costs…and then we have the unknown of what the Brexit costs will be.”
Alex Veitch, general manager for public policy at Logistics UK, said on Thursday: “I’ve never seen anything like it.”
“We’ve had a shortage of drivers in the UK, a chronic shortage, for many years, but now [this is] an acute shortage.”
According to the Office for National Statistics, consumer price inflation in the UK is currently running at two per cent annually, bang on the Bank of England’s target.
However, the Old Lady expects the rate of price rises to jump to four per cent by the end of the year.
Latest data from IHS Markit shows services and manufacturing businesses are already passing on higher costs to consumers. But, sales have been largely unaffected due to historically strong demand.