As operating margins continue to be squeezed it is imperative that all
costs are rigorously monitored. It is an incontrovertible truth that the
overhead monster is getting hungrier by the day.
Every commercial sector is seeing the impact. A prime example is the area
of transportation. Wherever possible exporters are moving business from air to
slower and less expensive forms of transport.
Manufacturers of electronics and mobile phones are now shipping cargo by
sea because competition was eating into their profit margins meaning they
needed to cut delivery costs.
Exporters of perishable goods such as fruit, vegetables and flowers have
little choice and as such face a diminishing return.
Non-perishable goods will continue to be shipped on water as the cost of moving
by air is very energy-intensive and the high cost of jet fuel makes air freight
prohibitive.
Facing marked resistance from consumers to price increases and a greater
level of competition those companies who are unable to exert a firm control
over their costs face a difficult future.
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