INSOLVENCY RATES RISE WITH THE COST OF FUEL
Irrefutable evidence that rising fuel prices are directly linked to company failures are shown in new analysis from one of the UK's leading insolvency firms. More than three out of four instructions currently received by SFP for businesses within the transport sector cite fuel as one of the biggest contributors to their company's downfall. And the problem will only get worse according to Simon Plant, a Partner at SFP: "Businesses in the transport and haulage sectors are taking a huge hit from rising fuel costs,” he says. "With petrol now over £1.35 a litre (on average), those businesses with narrow profit margins are being squeezed harder than ever, and some to the point of insolvency.
"A transporter or haulier simply cannot avoid being affected, unless perhaps they have managed to stockpile large quantities of fuel which had been purchased when rates were low,” he adds. Recent failures include:
• Yellow Star Travel – Suffolk-based bus and coach company
• FG Foster Haulage – Staffordshire road haulage company
• Antrac Ltd – a skip hire company with a £2million turnover
• All Transport Ltd – Ashford skip hire company, also with £2million turnover
Simon's comments come soon after the publication of a Risk Bulletin from credit insurer Euler Hermes UK that showed an 18 percent increase in overdue payment incident reports in the fuel sector comparing Q4 2010 to Q1 2011.
"While cutting costs and possibly orders will alleviate some pressure for a transport and haulage business, they may need to take more drastic measures to keep their heads above water, and pass on the costs to the customer,” Simon continues. "It is important not to be scared of passing on the increase or at least part of the increase to a company's customers.
"Whilst it is unlikely that such news would be welcomed, if clearly communicated and explained more often than not loyal customers will understand and continue to support the company.”
-ends-
twitter
facebook
linkedin
ADD YOUR OWN COMMENTS BELOW THIS POST. THEY ARE VERY WELCOME
[ posted by james, August 05, 2011 11:24 ]
this is insane! are the government just blind to this? they say our economy is on the brink of crisis but they seem to be causing most of the problems!
[ posted by David Britten, August 05, 2011 11:31 ]
In response the request to badger our MPs, I sent this letter to Jeremy Hunt.
Dear Jeremy.
As my constituency MP, please may I ask you to bring to the attention of the Chancellor the terrible impact that the outrageously high price of fuel is having on the economy, as he appears not to have noticed.
On the other hand, if this is, as I have suggested previously, this government's attempt to force people out of their cars in order to meet EU emission targets, please ask him to be honest about this and tell us so. I realise that this would be an uncomfortable thing for any politician to do, but at least then we could focus our attention on the necessity for government to provide alternatives to private transport. Why must we Brits always be beaten with a stick rather than be offered a carrot?
If this is the policy, I realise that the government will be vulnerable to accusations of retreating into a past in which only the very rich can afford to use a car, but that's too bad. You will just have to bear the brunt of public anger and kiss goodbye to your re-election hopes. The way things are going, this looks very likely anyway, but you might at least try to convince Osbourne that what he is doing is disastrous. You might also make him aware that his ridiculous assertions that things are getting better are greeted with laughter and contempt. He keeps on about the number of new jobs that have been created, but fails to mention what we all know, that these jobs are mostly part-time, low paid and filled by immigrants.
He really must wake up and smell what he is shovelling, and I can only ask that you ring the alarm until he does.
Best regards,
David Britten.
[ posted by Cliff, August 05, 2011 15:14 ]
What is being over-looked is that when successive governments put money into the service sector it is immediately soaked up (or re-couped if your cynical) by fuel costs. Fire engines, police cars, ambulances, etc, etc all require very expensive fuel to run. The man in the street has no chance.
[ posted by scott nicolson, August 06, 2011 20:12 ]
i'd love to be paying £1.35 a litre for the petrol that goes into my car but unfortunately i live in the shetland islands and petrol is £1.50 a litre!
[ posted by james oshea, August 06, 2011 20:24 ]
can we stop paying r taxes an national insurance as we work hard us men an women i think we should as we work 4 are money an it just goes nowhere same as are cars..also will stop alot off the crimes going on like drive out all the time see where i`m coming from...
[ posted by Karl Barlow, August 06, 2011 20:34 ]
It doesn't take a lot to predict how extortionate prices for fuel and energy will have disastrous effects on UK businesses of all sizes. I fear this government expects us maybe to go back to employing horse drawn canal barges as the main form of bulk transport?
[ posted by kelly congdon, August 06, 2011 20:38 ]
loving david brittens letter :)
[ posted by nigel robinson, August 06, 2011 20:44 ]
if the prices got this bad in france they would bring the country to a standstil ,so why dont we iff the price goes up mutch more no one will be able to aford to go to work
[ posted by Wayne Hall, August 06, 2011 20:56 ]
So what the hell is anybody doing about this?
Your average "man in the street" like myself is really feeling the pinch & to see oil companies publishing vast profits leaves a very bitter taste in my mouth.
We used to be a proud nation filled with people that would die for this country & would stand together as a people to for what's right & fair. These days I can honestly say that being proud to be British is a thing of the past for me.
Large corporates are running our country now & the working/middle classes are here to create huge wealth for just a few.
It's time we rekindled that unstoppable British spirit before it's lost.
[ posted by Jim, August 06, 2011 20:58 ]
I've been driving for a top Pizza delivery company (Franchise) where we get 70p per delivery on top of our minimum wage. The deliveries are in a 4 mile radius of the store meaning the delivery bonus doesn't cover the fuel cost let alone wear and tear on our vehicles. This taken into account means we are having to put extra fuel in for the deliveries from our wages which means we are not actually receiving the minimum wage .(Just wondering if this is legal?)
[ posted by deborah edwards, August 06, 2011 22:51 ]
don't agree with price for fuel .... one good thing.. we need to shop, closer to home, grow food for the shops, and supply more local.. manufacture more local, think posotive but still campaign. Cuts neeed to be made but money needs to stay in country so start local..
[ posted by Russ, August 13, 2011 9:37 ]
Like everyone else my business is struggling to keep its head above water. We now turn down even quoting opportunities for business further afield because we know we cant be competitive purely due to the cost of fuel. I even paid the huge cost to have my vehicle converted to LPG at a time when gas was 57p/ltr, however even that was negated when the cost was increased to 79p/ltr a massive increase. Is there no winning in this country. If I was french I could drive my vehicle over on my French tank of fuel and work in the south east and be more competitive. Where will it end, will we all end up on the scrap heap of society. Just give as a fair chance by allowing us to be able to afford to travel within this island.