As operating margins continue to be squeezed it is
imperative that all costs are rigorously monitored. Left unchecked escalating
operating costs have been the death knell of many businesses.
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 despite the recent
falls in jet fuel, the costs of air freight remain high.
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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