{"id":233488,"date":"2022-08-05T19:37:10","date_gmt":"2022-08-05T17:37:10","guid":{"rendered":"https:\/\/mypr.co.za\/?p=119447"},"modified":"2022-08-05T19:37:10","modified_gmt":"2022-08-05T17:37:10","slug":"drop-in-fuel-price-welcomed-but-transport-businesses-struggle-with-uncertainty","status":"publish","type":"post","link":"https:\/\/www.myza.co.za\/press\/drop-in-fuel-price-welcomed-but-transport-businesses-struggle-with-uncertainty\/","title":{"rendered":"Drop in fuel price welcomed \u2013 but transport businesses struggle with uncertainty"},"content":{"rendered":"<aside class=\"scaip scaip-1 \">\n<aside id=\"republication_tracker_tool-2\" class=\"republication_tracker_tool clearfix\">\n<h5 class=\"adtitle\">Republish for Free<\/h5>\n<div class=\"license\">\n<p><button name=\"Republish This Story\" id=\"cc-btn\" class=\"republication-tracker-tool-button\">Republish This Story<\/button><\/p>\n<p><a class=\"license\" rel=\"noreferrer license noopener\" target=\"_blank\" href=\"http:\/\/creativecommons.org\/licenses\/by-nd\/4.0\/\"><img decoding=\"async\" alt=\"Creative Commons License\" class=\"lazyload\" src=\"http:\/\/www.myza.co.za\/press\/wp-content\/uploads\/2022\/08\/drop-in-fuel-price-welcomed-but-transport-businesses-struggle-with-uncertainty.png\"><\/a><\/p>\n<p><img decoding=\"async\" alt=\"Creative Commons License\" src=\"http:\/\/www.myza.co.za\/press\/wp-content\/uploads\/2022\/08\/drop-in-fuel-price-welcomed-but-transport-businesses-struggle-with-uncertainty.png\"><\/div>\n<div class=\"message\">\n<p>Republish our articles for free, online or in print, under a Creative Commons license.<\/p>\n<\/div>\n<\/aside>\n<\/aside>\n<figure id=\"attachment_119448\" aria-describedby=\"caption-attachment-119448\" class=\"wp-caption alignleft\"><a href=\"https:\/\/mypr.co.za\/?attachment_id=119448\"><img loading=\"lazy\" decoding=\"async\" alt width=\"300\" height=\"235\" class=\"wp-image-119448 size-thumbnail lazyload\" src=\"http:\/\/www.myza.co.za\/press\/wp-content\/uploads\/2022\/08\/drop-in-fuel-price-welcomed-but-transport-businesses-struggle-with-uncertainty.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-119448 size-thumbnail\" src=\"http:\/\/www.myza.co.za\/press\/wp-content\/uploads\/2022\/08\/drop-in-fuel-price-welcomed-but-transport-businesses-struggle-with-uncertainty.jpg\" alt width=\"300\" height=\"235\"><\/a><figcaption id=\"caption-attachment-119448\" class=\"wp-caption-text\">Drop in fuel price welcomed \u2013 but transport businesses struggle with uncertainty<\/figcaption><\/figure>\n<p>\u201cSo many people are already struggling to live above the breadline; the implications are really serious\u201d<\/p>\n<p>With the courier and delivery industry being one of the fastest growing in South Africa, thanks to boosts in demand arising out of the COVID-19 pandemic and the proliferation of ecommerce platforms, it has been deeply impacted by the steep increases in fuel prices in recent months, with businesses being compelled to pass increased costs on to others in the supply chain.<\/p>\n<p>While August\u2019s drop in fuel price has been welcomed from many corners of society and business, the only constant for the transport industry is the uncertainty of roller-coasting fuel prices that force them to find a precarious balance between nurturing their client relationships and maintaining sustainable businesses.<\/p>\n<p>That\u2019s according to Jason Lombard, CEO of DPD Laser, a South African courier company with 25 branches and around a thousand drivers and vehicle owners across the country.<\/p>\n<p>\u201cWhile the slight fall in the August fuel price is good news for businesses and consumers, fuel is a fundamental component of a distribution business\u2019s costs, and when there are sustained fuel price increases as there have been during 2022, our underlying cost base shifts significantly,\u201d Lombard explains. \u201cEven with some reprieve now in August, our costs are still significantly higher than they were just six months ago. We now have to engage with clients through the supply chain again, to navigate the price changes, investing time and resources that could be used elsewhere in the business far more efficiently.\u201d<\/p>\n<p>This follows a 57% increase in the price of diesel between April 2021 and now, with more than one-third of that between January and June 2022. Those are increases that impact between 30 to 40% of a courier and delivery business\u2019s operating costs \u2013 particularly when it comes to larger trucks.<\/p>\n<p>Lombard points out that very few delivery businesses operate on double-digit profit margins, adding that the recent fuel price increases could be enough to break and close down a business that had been moderately successful before the recent run of increases \u2013 if they don\u2019t pass those costs on to their clients.<\/p>\n<p>\u201cThis is where it becomes truly difficult, with price increases having a snowball effect on consumers and the economy,\u201d he adds. \u201cConsumers are already bearing the brunt of the fuel price increase in their transport costs, but it will soon start to cause the cost of even the most basic of foodstuffs to increase. In a country where so many people are already struggling to live above the breadline, the implications are really serious.\u201d<\/p>\n<p>\u201cThe multiple pressure points of businesses being under the whip to recover the costs of doing business, and consumers buckling under the weight of the cost of living, creates a massively combative environment between the transport (logistics) sector and its customers, whether they\u2019re supermarkets, online shoppers, or everyday commuters,\u201d he says.<\/p>\n<p>DPD Laser has navigated a way around the soaring fuel prices by offering contractual rates to regular clients, with an overlying fuel surcharge that\u2019s updated when the petrol price increases.<\/p>\n<p>\u201cLevying a surcharge in this way means that if and when the fuel price comes down, our customers will benefit from the lowered costs too \u2013 and they will hopefully pass that benefit on to their clients as well,\u201d he says.<\/p>\n<p>The South African delivery market is considerably different from its counterparts in Europe, where one delivery driver and their vehicle could easily make 30 \u2013 40 deliveries within one city block, all within a couple of hours \u2013 and then do so using an electric vehicle that\u2019s not held hostage by soaring fuel prices.<\/p>\n<p>In South Africa, nearly half of business-to-consumer deliveries are to rural addresses, with drivers having to travel far distances over longer periods to make just one delivery. This geographic spread further exacerbates the cost impacts of continuous fuel prices.<\/p>\n<p>While electric vehicles are on the horizon, they\u2019re still too expensive to buy for business use because of misplaced luxury goods import taxes, along with range anxiety created by a dearth of charging stations. What\u2019s more, electricity is scarce, unreliable, and costly in South Africa, and running a fleet of electric vehicles sustainably is still a long way off.<\/p>\n<p>\u201cFuel price increases at this rate and pace are only just short of force majeure for all types of transport businesses, and they\u2019ve happened at such a pace and in such a sustained manner that efficiency initiatives run behind the curve,\u201d Lombard explains. \u201cMany clients see the cost of fuel as a supplier-related issue that shouldn\u2019t impact them, but increases of this nature simply cannot be borne by one party in the chain.\u201d<\/p>\n<p>\u201cWe need to work together to manage the costs throughout the supply chain and keep one another and end-consumers informed at every point of their journey so that we can all take steps to cushion the blow of the increased costs, as we\u2019re surely not far away from an R30 per litre fuel price.\u201d<\/p>\n<p><a href=\"http:\/\/mypr.co.za\/contact\/featured\/\">CLICK HERE to submit your press release to MyPR.co.za<\/a>.<\/p>\n<p> <span class=\"post-views-icon dashicons dashicons-chart-bar\"><\/span> <span class=\"post-views-label\">Press Release Views since 1 July 2022:<\/span> <span class=\"post-views-count\">60<\/span> <\/p>\n<div class=\"entry-pagination pagination\">Pages: <span class=\"post-page-numbers current\"><span class=\"screen-reader-text\">Page <\/span>1<\/span> <a href=\"https:\/\/mypr.co.za\/drop-in-fuel-price-welcomed-but-transport-businesses-struggle-with-uncertainty\/2\/\" class=\"post-page-numbers\"><span class=\"screen-reader-text\">Page <\/span>2<\/a><\/div>\n<p><a href=\"https:\/\/mypr.co.za\">Source: MyPR.co.za<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Republish for Free Republish This Story Republish our articles for free, online or in print, under a Creative Commons license. Drop in fuel price welcomed \u2013 but transport businesses struggle with uncertainty \u201cSo many people are already struggling to live above the breadline; the implications are really serious\u201d With the courier and delivery industry being [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":233489,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","ngg_post_thumbnail":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[9021,1],"tags":[3257],"class_list":{"0":"post-233488","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-mypr","8":"category-south-africa","9":"tag-mypr","10":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/www.myza.co.za\/press\/wp-content\/uploads\/2022\/08\/drop-in-fuel-price-welcomed-but-transport-businesses-struggle-with-uncertainty.png","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/233488","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/comments?post=233488"}],"version-history":[{"count":0,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/233488\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/media\/233489"}],"wp:attachment":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/media?parent=233488"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/categories?post=233488"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/tags?post=233488"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}