With
operating margins being continually squeezed it is imperative that costs are
rigorously monitored.
Every
sector is seeing the impact e.g. FedEx the world's second largest package
Delivery Company have seen their customers moving business from air to slower
and less expensive routes.
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.
Take the example of
mobile phones each 20 foot container can hold 13,000 smart phones with a
transportation cost from China to Europe of 7 pence per unit and a transit time
of approximately 25 days.
Traffic
will continue to moving onto the water because moving goods by air is very
energy-intensive and the high cost of jet fuel makes air freight too pricey.
Facing
marked resistance from consumers to price increases and a greater level of
competition those companies who are unable to control costs have an uncertain
future.
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