Oil costs passed to buyers

16 January 2008
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16 January 2008

Buyers should assess their fleet and delivery policies after the price of oil reached more than $100 a barrel, according to industry experts.

Logistics providers are being forced to monitor the price of their services in line with fluctuating fuel spend and the Freight Transport Association (FTA) believes extra costs will almost certainly be passed on to customers.

Geoff Dossetter, director of external affairs at the FTA, said: "The transport industry can't swallow the increases and prices are passed on to the customers.

"Virtually everything we use or consume every day is the product of a lorry journey, so the increased price of diesel impacts on everyone in the UK."

He stressed high fuel costs mean transporters will have to make every journey count to maximise efficiency, but conceded: "It's impossible to have full vehicles on the road all the time."

Fleet management firm Alphabet has urged companies to "fundamentally review" their operations to ensure they are able to cope. "Even though oil prices will almost certainly fall back into double digits for a while, the trend for 2008 will be for much more costly oil. Although this will drive up business costs across the board, fleet will be the key area where firms can directly mitigate the impact on the bottom line," said commercial director Mark Sinclair.

But rising fuel prices should not affect the demand for new cars in 2008, with the strong sales of 2007 set to continue. Paul Everitt, chief executive of the Society of Motor Manufacturers and Traders, said: "There is little sign that rising fuel prices have affected demand and we foresee only limited changes through 2008."

* There will be a fleet supplement with the 14 February issue of SM.

SMjan2008

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