Businesses Forced To Reduce Their Van Fleets Again After Another Petrol Price Increase
It was only last year that many companies in the US and UK were forced to take drastic action when petrol prices took a sharp rise. Those companies that had transport operations felt the pressure more than most and it was common to see vehicle fleets reduced by more than half.
Fleets may need to be reduced even further now and companies pushed even closer towards breaking point as the government announces predicted further cost increases in the coming months. What is frustrating many business owners about this situation is the lack of information it gives them to predict profit margins. “We get a set of forcasts drawn up and then they mean nothing when petrol goes up so much” argues Jerry Henley, Managing Director of JHG Foods. Around 25% of all companies in the US that were heavily reliant on transport, went into administration last year, which is a figure many predict will be replicated this year as well.
For companies that rely so heavy on petrol prices to turn over a profit, the news of another rise has not been well received. “We cannot survive much longer” claims Judith Grey, MD of UK-based company Grey Kitchens. Our customers expect their furniture to be delivered to them, which is something that is becoming financially unviable for us now. A number of similar companies are turning to cheap 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 been the most popular choice as on average these vans offer the best MPG. LDV van leasing has also been a strong choice as their reliability is thought to save companies large amounts of money in reduced maintenance costs.
