Inflation puts further pressure on couriers

Yesterday’s announcement that the UK Consumer Prices Index (CPI) annual inflation rate rose to 4% in January, might wash over many people’s heads. But for couriers it’s a significant concern, especially as experts, including the Bank of England governor Mervyn King, are already predicting another rise to as much a 5%.

According to the AA the average cost of petrol in January increased at the highest ever rate – from 122.1p to 128.3p per litre. Diesel is within 1p of its highest ever price at 132.8p per litre. This is due in part to the fuel tax and VAT increases which came into effect at the beginning of January.

Adding insult to injury a further fuel duty tax increase is due in April, putting fuel costs up by another 1p per litre. FairFuelUk campaigners – who included TV presenter Quentin ­Willson – pulled a seven-ton truck to Whitehall earlier this week, in a protest to scrap the fuel duty.

Insurance is also a big issue for couriers, premiums are soaring due to inflation, which in turn is causing more people to drive uninsured, creating a vicious circle of increasing costs.  The AA found that the average price for comprehensive cover in 2010 was £962.18, an increase of 30% from 2009.

At a time when consumers are keeping a tight hold of the purse strings themselves couriers are finding it increasingly difficult to put a competitive price on jobs. Many independent couriers are relying on websites such as Delivery Quote Compare to fill back loads to ensure that costs are not squandered.

What many will be pleased to hear though is that it isn’t just courier owner drivers and small firms that are struggling.  Reports from across the pond suggest courier giant Fed Ex has been forced to lower its third quarter earning guidance due to the poor weather and rocketing fuel prices. The company is said to be feeling the effects of “higher-than-expected fuel prices” in both its domestic and international markets.

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