Logistics accounts for up to 33% of bread cost due to rising fuel prices – opinion

Logistics costs currently account for up to a third of the cost of bread due to the need for daily delivery to dozens of retail outlets and rising fuel prices, said Yuriy Duchenko, President of the All-Ukrainian Association of Bakers (AUB) and Director of Strategic Communications at Alviva Group (Kyivkhlib).

"Flour was once a key component, accounting for 60% of production costs. Today, it's only 35%. The industry is responding to rising costs by optimizing routes, introducing new logistics models, and using modern electric transport for transportation," he wrote on LinkedIn.

According to the association's head, manufacturers are currently studying the effectiveness of switching to electric vans from European manufacturers, which cost EUR 50,000-75,000 on the Ukrainian market.

During a discussion about the feasibility of upgrading the company's technology fleet, Dmytro Tsykhanovsky, Marketing Director of UB.UA, recommended considering certain Chinese electric vehicle models with a range of 350-500 km. He believes such solutions could offer an alternative in times of resource shortages.

Olena Bobrova, Head of Sales at ABILE, commented on the publication that, with fuel prices rising, energy efficiency is becoming a matter of industry survival. She added that electric transport is "the future that is already here," but it requires new service solutions and management flexibility.

Enzym Group Commercial Director Ruslan Dihalenko opined that the logistics issue should be addressed by small local businesses, but today, among micro-producers, "only romantic craft brewers remain," as large players have long dominated this segment.

As earlier reported, bread producers have repeatedly cited logistics and labor shortages as key factors that most impact the final price of their products for consumers.