With fuel prices rising am I likely to be billed more heavily by my logistics-provider for all transport? If so, is there anything I can do to mitigate this?
Philip Bracken, Director, Professional Services TNT Fashion:
The rapid and substantial increase in fuel costs is one more factor in the mix of economic pressures on retailers. Today’s price is more than quadruple what it was in January 2000 and the scale of the rise is such that logistics providers simply must reflect this in their charges. This is of course unwelcome, as it squeezes retailers from their cost base whilst simultaneously rising prices at the forecourts has a dampening effect on consumer spending.
You should ensure that your logistics service provider firstly has the courtesy to advise you of any increase, how much it will be and how it will be calculated. Any mechanism to address this issue should be transparent and directly linked to the actual fuel prices over time.
If you have an ‘item’ rate for distribution (as opposed to the weight-based tariffs used by most express carriers), then consider your current outbound pack-factors. This will suit some merchandise lines more than others, but if you can increase your pack factor without crushing the contents, you will be surprised at some of the savings you can achieve.