It’s been creeping up and up over the years, but the current Ukraine crisis has made a sudden and material difference to the price of fuel in the past month or so. This is the one thing that hits consumers and suppliers in the pocket, often multiple times as it bites at the pump and at the supermarket when increased transport costs are passed on through the price of groceries and other goods and services.
We’ve looked at 5 ways in which this thorny issue will be putting extra pressure on fleet managers and retailers who rely on road transport to run their businesses.
1. staying focused on the bigger picture
As a fleet owner or manager, increases in fuel costs are a headache and something which threatens to obscure the longer-term aim to reduce CO2 footprints. Although the two things are combined, such dramatic increases as we are seeing today brings the industry into the spotlight and raises calls for visible action which can cause momentum on solving the longer-term issues to slow.
There is a great deal going on behind the scenes when it comes to improving and minimising fuel costs, vehicle range and CO2 emissions. However, this is sadly obscured when all the end customer can see is rising prices and is demanding a solution.
2. Stuck between a rock and a hard place
If that rock and hard place are the fuel pump and the bottom line, this will feel like a very uncomfortable position for most business in the freight industry. It soon becomes a tense situation for fleets managers as their fuel surcharge increases and they grapple with maintaining prices for their own customers.
3. The inevitable ripple effect
Increased fuel costs has so many knock-on effects, but one we may not have foreseen was reported on by The Guardian recently. It relates to the risk of further disruption from a threatened strike at Fawley oil refinery, the site which provides around a fifth of the UK’s road fuel. Added to recent driver shortages caused by Covid and Brexit, and the industry is feeling somewhat battered and bruised. As with any nationwide, high-profile agenda, the issues don’t go away but instead become more complex to resolve as ever more challenges are placed in the way.
4. More fuel to the fire
What makes the current situation extreme is that prices were on the rise anyway. The TEG Road Transport Price Index, which measures the monthly cost per mile of UK haulage and courier vehicles reported the cost of road haulage was up 15% in January 2022, in comparison to the same month last year. It’s not hard to forecast how that might be looking now, with the Russia/Ukraine crisis pushing the cost of Brent Crude to an all-time high.
5. Disruption drives demand. Demand means delivery.
The knock-on effect of such a disruptive world has impacted the freight and distribution world in many other ways, all of which come back to the core issue of supply and demand. Technology has also advanced dramatically in the wake of the Covid pandemic. Although this may assist with carbon footprint solutions, it also places an extra squeeze on the UK haulage industry as it enables the on-demand economy to scale more quickly. By this, we mean those innovative ultra-fast, hyper-local grocery delivery services which are on the rise. Such services, which have become far more popular since lockdown, place yet more pressure on the transport and logistics sector to respond with ever-faster delivery to meet higher demand. When time and speed increases fuel consumption and therefore drives costs even higher this is yet more tension in an already pressurised industry.
The only thing that is certain, is that our industry will face more change. Resilience and agility are now key skills in running a successful business that can not only survive but thrive. Providing you are in possession of good data regarding the performance of your fleet and utilising every opportunity to maximise range and minimise fuel consumption and carbon footprint, you are on the path to improvements and better profit margins, both of which will cushion the pressures we’ve outlined here.
Working with Aerodyne will provide that and more. We’re seeing vehicle lifetime savings delivered by our aerodynamic kit improving significantly. IN some instances, our customers’ return on investment has reduced from 18 months to just 12. Fuel saving is a higher priority than it was even a few months ago, but the good news is, the rewards are higher too. Can you afford not to invest?
For help and advice on truck and trailer aerodynamics and fuel consumption calculations, get in touch with us. firstname.lastname@example.org or 01778 422000.