Poland: How much do farmer protests cost?

Blocking roads can be effective, but it is also very expensive.


The March farmers' protests resulted in road blockades in over 500 locations in various parts of the country. DSV - Global Transport and Logistics experts point to the related losses of the logistics industry. They were caused by delays, unfulfilled deliveries and the need to renew them, as well as handling stockpiles accumulated due to the accumulation of inventory. According to DSV estimates, the events of March 19 hindered the movement of 30% of heavy goods vehicles moving on Polish roads that day. In their opinion, the delays were most noticeable in domestic transport, primarily due to the short contractual delivery times compared to international transport services.

With an average delay of a means of transport estimated at three hours and current transport rates, the losses can be estimated at PLN 450 per vehicle. Assuming that 1.3 million trucks move on Polish roads every day, 30% of which experienced difficulties, the experts obtained a sky-high amount of PLN 175 million per day. - In a situation of paralysis of a larger number of roads, a particular problem in the organization of transport is deliveries to the so-called time windows. If a given distribution vehicle is scheduled to deliver to 5-6 points in one day and only completes it in two, the rest of the goods must return to the warehouse. Then the delivery is made again on the following days. Of course, this increases the demand for means of transport and drivers on those days. In such situations, it is necessary to use vehicles from outside the company's own contract fleet on a much larger scale, which affects the quality of the services provided, but also increases the costs of handling deliveries - explains Marta Kućmińska-Mróz, Director of the Key Accounts Department at DSV.

Polish zloty of different value next to each other
Beeld: ©A.Murawska

Eliminating the effects of one day of nationwide blockades takes from two days to even a week. Of course, optimal management of this situation costs - and this cost usually remains solely on the side of the logistics operator. - adds Kućmińska-Mróz.

Knowing the date and place of organization of short-term protests or other events disrupting car traffic allows to minimize their impact on the punctuality of deliveries to a certain extent. The logistics operator can then replan routes accordingly and, in consultation with customers, adjust the delivery schedule. The situation changes dramatically when the announced protests become long-term.

- Then the range of options available to the logistics operator, necessary for effective management, shrinks significantly, and the costs, which include additional expenses for fuel, the work of drivers and warehouse workers and possible contractual penalties for delayed or unfulfilled deliveries, grow exponentially - explains Marta Kućmińska-Mróz. In the medium term, protests and the road blockades caused by them may lead to an increase in the costs of transport services - operators will have to pass on the increase in costs to customers. They may also affect the fluidity of deliveries and supplies of trade and production, and as a result, for example, the need to increase inventories for entities from the production, trade and distribution market.

Source: Puls Biznesu