10 March 2022

Market Adjustment Factor

It will not have escaped your notice that a lot of things are going on in Europe at the moment and that developments follow in rapid succession. The ongoing crisis in Ukraine and other issues, have far-reaching consequences for the transport sector. In this newsletter we would like to explain these consequences to you and introduce the necessary, but temporary, Market Adjustment Factor.

The drama unfolding in Ukraine has a direct impact on the availability of trucks for international transport. Ukrainian and Belarusian drivers are returning to their countries. Men aged 18-60 cannot leave the territory of Ukraine and are not employable for the time being due to conscription. A significant proportion of drivers employed by Polish firms (30-40%) are from Ukraine. This results in a negative impact on available capacity. In addition, the capacity is further limited by the 'Return-Home-Vehicle' principle, resulting from the Mobility Package.

Due to the various developments in and around Ukraine and Russia, fuel prices have risen by more than 30% over the past 14 days. Unfortunately, the analyses of fuel market analysts point to further increases in the coming period, possibly even by another 25-30%. 

Carriers are doing their best to make as much capacity available as possible, but deliveries of new trucks are taking place with increasingly long delays. As a result, we are forced to keep obsolete vehicles running for longer periods at significantly higher maintenance costs and with higher costs for tires and spare parts. 

Mainfreight, our partners and suppliers obviously could not have predicted these shortages. The rates and fuel clause agreed with you do not provide for this unprecedented and extreme situation, and initially Mainfreight absorbed some of the costs internally. Now, however, we are forced to pass on some of the aforementioned cost developments to our customers as well. We do this by means of the Market Adjustment Factor. We will adjust the amount of the factor, if necessary, on a weekly basis and share it with you. 

Naturally, Mainfreight will do everything possible to minimize the effect.
We will follow the developments closely and continue to inform you about possible changes. 

The continuing uncertainty and highly fluctuating circumstances may also lead to longer lead times. We ask for your understanding in this matter as well as your cooperation in order to achieve an optimal planning.

Incidentally, the expected impact of the Mobility Package is becoming increasingly visible. We would like to emphasize, however, that these cost consequences are not included in the calculations of the Market Adjustment Factor.

We and our team will continue to make every effort to get shipments delivered as scheduled. We hope for your understanding and if your shipment is very urgent we request you to contact your contact person or our customer service department (customerservice@nl.mainfreight.com / +31 (0)314 671 111). We are happy to discuss our options with you.