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There is no doubt that the world is currently experiencing rising fuel prices. While this is good for some, for many companies, big and small, it is causing serious problems. One area, in particular, is commercial vehicle management and the expenses that go along with it.
Let us take a closer look, then, at how ever-climbing petrol costs are impacting commercial vehicle management and trade expenses.
Car leasing companies
With many companies now maintaining working from home after the pandemic, leasing companies have found less demand, together with rising fuel prices.
This double problem can make running a leasing company hard and is why some companies are shedding vehicles to manage smaller fleets.
It can also cause issues with outstanding debt and credit issues, especially as it can be challenging to try to obtain car finance with bad credit.
However, some companies are starting to embrace this uncertainty and develop new coping strategies.
For example, some leasing companies are changing their fleet to all-electric to meet the growing demands of people and businesses that want to move to greener alternatives.
They are also developing better ways to collect data about their fleet vehicles to make it easier for fleet managers.
Fleet logistics are also changing because cars and employees are doing more work at home. Arranging an MOT in Thurrock from a trustworthy independent garage may help to build in more flexibility for customers.
Passing on costs to consumers
Although no company wants to pass on operational increases to its customers, it is sometimes necessary.
A business can only absorb price increases for so long before it has to raise its prices to compensate.
Unfortunately, this can lead to a decrease in sales and fewer leads, so a delicate balancing act is needed.
Competition between companies can sometimes be decided on small changes to costs and expenses. This can lead to businesses failing because they are trying to stay competitive.
Being open and honest with customers is often the best way to deal with any increase in prices. Customers are likely to see the same rising costs in their own lives, so they will understand the reasons behind it.
Outsourcing and negotiating with suppliers
Some companies may find that their current level of the contract with suppliers is not sustainable. They may also feel that some tasks can be outsourced to other companies to save money.
Using commercial security systems instead of in-house security staff is often one way in which companies try to be more cost-effective in their operations.
Another area that is often outsourced is cleaning and maintenance contracts. Outsourcing can often be cheaper for the company, and may be a better option than asking one of the existing employees to take over the role.
Switching transport routes and vehicles
Some companies will see the rising fuel prices as a good time to look at their logistics. Road transport has usually been easier and cheaper than the alternatives such as rail. However, the pressure of climbing petrol prices could soon make rail transport a more attractive option.
It may also lead to businesses using fewer vehicles to transport larger amounts, or having longer transport routes for each vehicle.
This will place additional strain on drivers and may increase the expectation from management that drivers will accept longer days or more hours.
New ways of working
Since the onset of the COVID-19 crisis, companies have had to make changes to the ways they conduct their business and interact with their staff.
During the lockdowns, staff often attended video meetings and virtual working groups to help keep up productivity. These new ways of working have proved so successful, that some are considering continuing with them and having staff work from home part-time or full-time.
For fleet managers, this means finding new ways to interact with their vehicles so they can access the same data and arrange servicing. It also means keeping in contact with fleet car owners to ensure they are completing safety checks.
New technology and software have allowed fleet managers to collect all of this information remotely and still have control over the fleet of vehicles.
Forward planning
An essential takeaway from this situation is the need to plan ahead for any eventuality. Companies and their commercial fleets need to become more flexible and able to change with whatever may happen in the future.
Conclusion
So, how is the rising price of petrol impacting commercial vehicle management and trade expenses? It is all about how companies can adapt to the price increases and limit the amount they have to pass on to their customers – and as outlined above, there are various ways in which firms have been doing exactly that.
You may also like: 4 Tips to Save Money on Your Business Vehicle
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