As Petrol Prices Soar, Transport Companies Suffer
Where Do You Live?
Being forced to heavily reevaluate their business models is something that UK and American companies are accustomed to, after the price of petrol shot up last year. Transport-based companies were hit hardest for obvious reasons and lots had no choice but to cut pay and cut vehicle numbers.
It was avouched this month that many businesses could be in for a second pounding as petrol prices are set to take another upward spike. What is frustrating many business owners about this situation is the lack of information it gives them to predict profit margins. “Each time we plan out our business for that quarter, petrol prices are put up and our costings go out of the window” says Barry Hemstone, MD of RDA Foods. Many business experts have predicted that 2009 will see similar levels of transport-based companies shut down as witnessed last year, which was around 15%.
Many people and businesses are on their last legs right now and the last thing they need is an increase in their overheads. “We are being crippled” argues Fiona Potter, who runs a small furniture chain in the UK. Our customers expect their furniture to be delivered to them, which is something that is becoming financially unviable for us now. Lots of businesses like this found some salvation in van leasing in an attempt to cut their costs. This is because van leasing enables businesses to not buy their vans outright and so this is a useful option if cash-flow is poor. An interesting point to note is that Citroen van leasing has come out on top this year in terms of popularity, largely due to the high miles per gallon figures they offer. LDV van leasing is also up their with the most popular choices as their reliability is well respected in many industries.
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