Rising diesel prices deepen transport firms’ bankruptcy threat

Rising diesel prices could push more Finnish transport companies into bankruptcy, Yle reports. In a survey last spring, about 18 percent of companies said bankruptcy threatened their business, according to the Finnish Transport and Logistics SKAL, an industry association.

SKAL chief executive Anssi Kujala said transport company bankruptcies have been above average this year. If diesel prices remain high, he expects the number to rise further before the end of the year.

Last year, 121 transport companies with operating licences and their own vehicles went bankrupt. By the end of August this year, before the sharp rise in fuel prices, the figure was 83. Around 9,000 transport companies operate in Finland, and 250 to 300 voluntarily close each year.

The industry’s costs have risen 12.7 percent over the past year, adding nearly one billion euros, Kujala said. He expects the high cost of diesel to eventually be passed on to consumers and industry, including through higher food prices.

Companies are better prepared for fuel price changes than they were during the previous sudden rise four years ago, Kujala said. About half have contracts that allow them to raise rates when fuel prices increase, while roughly a quarter have no such clause. For many companies with a clause, rates are reviewed only every six months.

Koneurakointi & Kuljetus Hirvikoski, a transport company in Heinola with 15 vehicles, carries energy wood and recycled materials. Owner Pasi Hirvikoski said higher fuel costs directly reduce the company’s profits. The company replaced two vehicles with more fuel-efficient models this year, but may not replace any next year if prices keep rising.