All types of businesses are facing new challenges to their operational costs in this post Covid-19 landscape and this is in part due to supply and demand, a lot has changed over the past 24 months and it’s having an impact on all of us.
No matter what type of business you operate in, you will have probably experienced recent price hikes due to manufacturing and distribution costs increasing. These relate specifically to raw materials and fuel and labour cost pressures, with our recent UK fuel crisis and empty supermarket shelves demonstrating just how the shortage of HGV drivers can impact the way we run our lives.
Having taken the past for granted, the convenience factor is now hanging in the balance and making us all have to really think about how we plan each day, which begs the question whether there is a reset currently taking place.
We know there is a shortage of nearly 100,000 qualified HGV drivers in the UK, and it’s not just the UK experiencing these problems, it’s a global issue https://www.bbc.co.uk/news/57810729 . Concern about the pressure this poses to our supply chain is only increasing in the run up to Christmas this year and although the Government have implemented steps to address this; a perfect storm of Brexit, Tax Legislation and Conditions alongside a Covid backlog in the process is a mountain that may not be submittable in time. Supply and demand has a very special resonance for the HGV drivers that we do have working in the UK, it is reported that with salaries being low for qualified drivers for nearly 30 years, wages have increased so much that companies are now having to meet the expectations of drivers or lose them from their established workforce. https://www.thisismoney.co.uk/money/experts/article-10046133/How-HGV-driver-Training-costs-salary-expectations.html. https://www.bbc.co.uk/news/uk-england-coventry-warwickshire-58409277
We also know that currently Britain is in the mist of a cost-of-living crisis and that will fuel inflation and may hamper economic recovery, we are right now experiencing the highest gas prices in history https://www.bbc.co.uk/news/business-58090533. This increase is affecting the whole energy sector and the only way that companies will be able to trade through this, is to pass their increased costs on to customers with higher prices.
Henry Farmer, Head of Commercial at Albus explains, “In our sector, we saw the Polypropylene (PP) price start to increase in February and it didn’t go down as expected, which impacts all of our plastic consumables such as bags, sharps bins and sealed units. These have reached an all-time high price point this month and the trend is not showing any sign of decline. With all of these challenges that we are facing in business, our success comes from looking after our customers and what our clients can rely on, is our continuity and consistency of service due to the investment in our people”.
The energy squeeze is most definitely becoming visible and the cost of waste disposal has increased at a rate above inflation and the only way to counter this is for organisations to become proactive and to focus on waste minimisation; so, recycling, tighter supply management and getting rid of rubbish responsibly, is going to be key for the future. Research shows that over the next 15 years there’ll be a big change in the make-up of our waste stream, there’ll be less materials like cardboard, paper and food waste because new regulations mean more of those will be recycled and composted.
In further measures to tackle single-use plastic, the Government have introduced a new ‘plastic tax’ that will come into effect next April 2022. This new legislation will give businesses an economic incentive to use recycled material in the production of plastic packaging, which will create greater demand for this material and in turn stimulate increased levels of recycling and collection of plastic waste, diverting it away from landfill or incineration. This is a new tax that applies to plastic packaging produced in, or imported into the UK that does not contain at least 30% recycled plastic.
Here you can find an open-source report on the prices of a few plastic commodities: https://www.theplasticsexchange.com/. You can simply register and see most of the reports.