The evolution of costs of companies Logistics It is key information for all industries, since any variation is transferred to the entire production chain in which transportation is an essential input. Furthermore, its behavior is a sounding board for what is happening with the macroeconomy.
Specifically, the Transportation Cost Index (ICT) prepared by the Argentine Federation of Freight Motor Transport Business Entities (FADEEAC) and audited by the Faculty of Economic Sciences of the University of Buenos Aires (UBA), registered an increase of 8.05% in February. Thus, it accumulates an increase of 30.4% in the first two months of 2024 and 290% in the last 12 months.
Although the figures are still very high for any normal economy, the truth is that this 8.05% is well below the 20.64% that occurred in January of this year. And even further of the 28.23% that was registered in December 2023which was the monthly cost variation highest in the last 30 years.
“Last December we had the highest monthly increase in the last 30 years and 2023 closed with a record increase of almost 248%. Although it is true that a significant slowdown in costs was recorded in February, it is essential to understand that the sector suffers today a drop in activity of around 40%. And, added to that, the payment chain has been deferred up to 60 daysso a trip that we make today, in many cases, will be charged in April,” explained Roberto Guarnieri, President of FADEEAC.
The businessman also warned about the risk that the recession affecting the sector will deepen the crisis that a large part of the trucking industry is going through, an activity that is responsible for the movement of more than 90% of Argentina’s economy.
Freight transportation costs: impact by industry category
The Index measures 11 items that directly impact the activity of the sector throughout the country, and is reference largely for setting or adjusting rates.
According to the survey, in February six items showed increases (Fuel, Tires, Repairs, Personnel, Insurance and General Expenses), three did not suffer changes compared to January (Lubricants, Patents and fees, and Toll), and two registered decreases (Rolling stock due to the strong monthly decrease in alternative dollars-, and Financial cost -linked to the decrease in interest rates).
The two items of greater gravity in the operating costs of the sector are Fuel and Personnel. And both continued with an upward trend.
In the case of Fuels They had an increase of 5.52% in February (Because it is the February index, the new increase that was applied at the beginning of March was not included in the report). Although the increase occurred in both the retail and wholesale diesel segments, the figure was well below the increases in December (63.3%) and January (22.6%). While, in the Personal category, the planned increase for Driving was realized (16.8%).
National logistics cost index
The slowdown in the rise in costs was also detected by the survey of the National Logistics Cost Index prepared by the National Technological University (UTN) through its Technology Center for Transportation, Transit and Road Safety (C3T), prepared for the Business Chamber of Logistics Operators (CEDOL), which reported 8.14% in the month of February 2024.
During this period, the impact of the second tranche of the joint agreement for the month of December 2023 (21% on December salaries) took place, as well as increases in fuel (5.52%), repairs (6.66%), insurance ( 25.93%) and general expenses (33.56%).
In storage operations, the sharp increase in the cost of electrical energy (119.3%) stood out, with increases also in rent (8.36%), pallets (15.80%) and stretch film (5.64 %). There were also increases in the Internal Wholesale Price Index, IPIM (18%) and in telecommunications (25.1%).
Logistics costs: how March is coming
The increase in fuel in the first days of March, of around 7.25%, as well as the salary increase signed for this month (25% over February values), motivated the preparation of an impact projection for the current month by the CEDOL Technical Department.
In this way, the projected values for the month of March 2024 They are 8.34% for the index with transportation costs, and 18.24% for the indicator without transportation costs.
The report also clarifies that “there are a series of Hidden costswhich, due to their difficulty in measuring to integrate the index, are not reflected, but without a doubt also affect Logistics costs (values of units between official and real price, the difficulty of imported spare parts, the same with tire and maintenance values, among others).
The objective of these indicators is to reflect on a monthly basis the variations of all logistics costs, with the exception -precisely- of the unproductiveness that is usually generated by causes external to the logistics operators.
Source: Ambito
