New survey lays bare the true cost of 'COVID' overheads for logistics firms

6/3/2020

France's leading logistics association, TLF, has surveyed its members and put a figure on the overheads they are incurring in protecting staff, company premises and equipment from COVID-19, underlining that the industry cannot shoulder the financial burden alone.

“In a sector, where more than 50% of global business costs are accounted for by wages, ensuring the protection of employees represents a significant outlay, which today is threatening the economic stability of firms,” claimed TLF.

The survey revealed that the average cost of providing individual protective equipment - such as single-use masks, gloves, hand gel, wipes, soap, and towels - works out at €2.50 per employee per day.

Overheads stemming from the implementation of measures to keep premises and equipment as safe as possible from the spread of the virus - including disinfection, altering the lay-out of work areas, and more regular cleaning of changing and rest rooms – is estimated by TLF at €0.15 for every square metre of warehouse space.

Companies are also suffering a 15% loss in productivity due to increased absenteeism because of illness, child-minding duties and vulnerability to the virus, and as they adapt processes for social distancing, modified working hours, staggered rest breaks and temporary suspensions of activities to disinfect premises.

TLF  noted that these overheads are in addition to the losses already incurred as a result of “the brutal shock of the crisis,” notably a severe drop in volumes, empty return journeys of trucks and increased overtime payments to drivers due to an extension in working hours which, under  the current exceptional circumstances, allows them to take to the road on Sundays and on public holidays.

“The consequences on global activity, particularly in terms of handling and transport costs, will be felt  in the medium and long-term,” it warned.

TLF president, Eric Hémar, who also heads one of France's fastest-growing independent logistics groups, ID Logistics, commented:

"Before even talking about recovery, the short-term priority is to safeguard the transport and logistics sector to limit the social consequences and the impact on jobs.”

He added: “Clearly, solutions must be found to manage the additional costs generated by this unprecedented crisis. We call on the government and all the players depend on the sector to help us cushion the shock. This is vital if we want to keep the supply chain on its feet .”