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Formula 1

Freight costs and budget cap increase under the microscope at F1 meeting

A meeting of the Formula 1 Commission on Tuesday is set to examine the possibility of an increase to the budget cap in light of spiralling transport and freight costs.

Verstappen start 2022 Imola
To news overview © Red Bull Content Pool / Getty Images

The F1 Commission, comprising teams, F1 and the FIA, will meet in London on Tuesday for round-table discussions about a number of issues, with inflation and rising freight costs going under the microscope amid the tight budget cap.

Teams are restricted to a financial cap of $140 million dollars in 2022, a shrinking of $5 million from the 2021 limit – the inaugural year of financial restrictions.

While the travel of F1 personnel does not fall under the FIA Financial Regulations, the transport of freight is included under the cap and, in light of skyrocketing inflation around the world, a bigger chunk of the $140 million dollar limit is being eaten up by unforeseen costs - such as electricity and raw materials - than was predicted when the budget cap rules were first drawn up.

Brawn: Inflation has become unpredictable

Ross Brawn, Managing Director of F1, spoke at Imola about the potential for there to be some tweaking to the budget cap.

"I think the inflationary increase needs to be reviewed because, when these rules were developed, inflation was relatively low and predictable. Now it's high and unpredictable," he told media, including RacingNews365.com.

"If you look at the inflation rates that apply to industrial enterprises like a Formula 1 team, you've got power, you've got raw materials, you've got all the things which are proving to be quite expensive at the moment, so I think there's a solution coming on that."

Horner: A sensible allowance needs to be found

Red Bull team boss Christian Horner also weighed in on the issue recently, as he spoke about the cost of freight transport during the Australian Grand Prix weekend.

"We have a very complicated calendar and there are very tight timescales, and with some of the triple-headers and double-headers coming up late in the year, obviously losing freight for a period of time could wreak havoc," he said.

"So that's one issue that we're working, obviously, very closely with the logistic guys and F1 with, but then, of course, there's the cost element, and I think freight is close to doubling this year – we see that in all the cost of living, we see inflation throughout the world.

"I think that's… again, when you consider that freight is something that is currently within the cap, we need to find a sensible allowance that takes into account these inflationary costs, because it has a one-on-one effect on parts and people at the end of the day, that your only compensatory place to offset that so… Formula 1 are acutely aware of that, the FIA are acutely aware.

"I think the teams by and large are looking to find a workable solution, but it is a concern. It's something that we need to address sooner rather than later."

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