Associated Cold Stores & Transport (ACS&T) saw revenues grow last year, but the driver shortage and its subsequent reliance on agency labour significantly hit its profits.
The temperature controlled storage and distribution firm reported a 4% increase in turnover for the year ending 1 January 2022, to almost £22m.
However, pre-tax profit plummeted to £31,000, from £601,000 the year before.
In a review of the trading period, the Grimsby-based business said conditions had been challenging due to the effects of the pandemic.
But its hybrid solution of home and office working proved so successful it said it was likely it would continue to rely on this strategy in the future.
“On a local level, the effect of the driver shortage starting in the summer months, highly impacted the company,” it said.
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“We initially lost over 25% of the driver workforce as they left the business for more competitive salaries elsewhere.
“As a result, this reduced our ability to meet demand and forced us to increase the proportion of very expensive agency labour and subcontract transport simply to meet customer needs.”
ACS&T said that in order to align driver pay with the wider market its transport labour rates increased by 37% and it said the instability and uncertainty during this period, as well as the difficulties it had passing on these increased costs “materially impacted profitability”.
Total loads transported increased by 13% over the period and it said that by the end of 2021 the company was in a strong financial position.
“In 2022 the company aims to benefit from the growth of new client strategic partnerships started towards the end of 2021 and 2022 to date.
“Although the company has seen the loss of a key customer during the latter half of 2022, it will see growth in the northern transport hub during quarter four to minimise the impact.”