Finnish transport firms leave jobs undone as diesel prices surge

Some Finnish transport companies have left agreed jobs undone because diesel costs have made them unprofitable, Yle reports. The industry’s advocacy group SKAL says the rise in fuel prices is severely weakening companies’ profitability.

Diesel has risen to more than 2.50 euros per litre, according to SKAL’s accounts. Prices have increased by about 60 cents since the beginning of July, and diesel is now more expensive in Finland than anywhere else in the European Union.

“Companies have to consider whether their business is profitable,” SKAL chief executive Anssi Kujala said. In a survey conducted in the spring, 10 per cent of respondents said they were considering suspending driving if it became loss-making.

For Antti Nousiainen, an entrepreneur at the Loimaa-based transport company E. Nousiainen, the increase could add hundreds of thousands of euros to annual costs. The family-owned company employs about 30 people and specialises in transporting timber.

Fuel accounts for about 2.5 million euros, or 30 per cent, of the company’s revenue. “It feels really bad. The industry cannot withstand this price level,” Nousiainen said.

E. Nousiainen is better protected than many other companies because its contracts include clauses covering fuel price increases. About half of transport companies have comprehensive fuel clauses in their contracts, while roughly a quarter have them in some contracts and a quarter have none, Kujala said.

The clauses became more common after Russia’s war of aggression caused a sharp rise in fuel prices. However, the review periods are often too long for rapid price increases. A three-month review period offers little help if a company’s fuel bill rises by thousands of euros in a single month, Kujala said.

Janne Ohvo, chief executive of Vantaa-based Power Logistics, which specialises in air freight, said his company also has fuel price risks covered in its contracts. However, he said many colleagues have had to absorb the increases in their own margins.

“Even if there are clauses, it is not that simple when the price is 2.30 euros per litre today and 2.55 euros tomorrow,” Ohvo said. “The changes are so rapid that it is difficult to keep up.”

E. Nousiainen operates 12 timber trucks and five gravel trucks. The company bought its first biogas-powered timber truck 18 months ago and plans to add two more next year.

Biogas is considerably cheaper than diesel, but the vehicles cost about a quarter more to purchase. Nousiainen said strong demand and a more positive outlook for the Finnish economy were making it easier to invest.

“We have plenty of work and there is a positive momentum. Faith in the future is better than it has been for a long time,” he said.