Petrol Prices Reduce Van Fleets
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.
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. The worst part of it, according to many transport companies is that they are increasingly unable to formulate accurate profit projections. “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. Some companies such as the one mentioned above have taken up van leasing to try an reduce their outgoings. Because they are not buying the vehicles outright, they can afford to spend more on petrol whilst maintaining their margins. 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. Ford van leasing has also been a strong choice as their reliability is thought to save companies large amounts of money in reduced maintenance costs.
