HDA: Rising energy costs an 'unknown threat' to wholesalers
The rising cost of energy represents a “big unknown threat” to wholesalers, although they might have not felt the effects of increasing fuel and electricity costs yet, Healthcare Distribution Association (HDA) executive director Martin Sawer has said.
If these costs do not decrease, they will present a “challenge” to wholesalers, with businesses using automated warehouses expecting to take “a big hit”, Mr Sawer told C+D yesterday (April 21).
All wholesalers are "concerned about the rising cost base”, Mr Sawer said, “whether it's cost of staff or cost of energy and transport”.
Although having to take these costs into consideration “is not unusual to our sector”, manufacturers, wholesalers, and pharmacists “can't pass the costs on to the NHS”, he explained.
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“The government could always [step in to] help”, Mr Sawer caveated, “so I'm not suggesting that we would hit the doomsday scenario”.
This aid could take the form of “employment initiatives, fuel subsidies for certain types of healthcare businesses”, or relaxing certain taxes, he suggested.
Nevertheless, wholesalers could soon begin looking for solutions to mitigate the impact of rising overheads so they can “maintain a profitable business”, he said.
For instance, some are “looking at trying to electrify van fleets” or identifying how they can "reconfigure their operations in some way”, Mr Sawer said.
Some wholesalers could stop maintaining their own transport fleets or some smaller wholesalers could start "outsourcing their transport to some of the big wholesalers”, he added.
Staff retention still a challenge
Despite these rising worries, “things [have] pretty much settled down to business as usual” for wholesalers since the end of March, Mr Sawer said.
Staffing issues due to COVID-19 have plagued the sector over the past two years, leading many wholesaling companies to maintain “extra staff to make sure that they could cover staff absences”, according to Mr Sawer.
Workforce levels have been “better” this month, as the latest COVID-19 wave "seems to have […] receded a bit”, he continued.
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But while there are “more people applying for jobs now than they were before Christmas [...] we still have a challenge with retention of staff”, he noted.
To combat this, wholesalers “need to have robust relationships in place” with “reliable agenc[ies]”, to “supply extra drivers” or “warehouse staff”, he stressed.
