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Record petrol prices to drive up freight charges in 2010

Microscope contributor

Distributors are warning of an increase in freight costs after petrol prices hit a record high this week, with the prospect of further surges in the coming months.

The cost of a litre of fuel surpassed £1.20 this week and is predicted to climb another 25% by the summer leaving distributors little option but to pass on that increase to resellers.

Andy Gass, managing director at Computer 2000, said it was "reviewing the situation each month as we go forward".

"There is likely to be some impact, we haven't seen it yet but our policy is to cover freight output costs, if the cost goes up we would have to pass them out to customers," he said.

The channel has long talked of charging more for its logistical prowess, and nearly two years ago Ingram Micro took the brave step of charging for freight on all orders to recoup the rapidly rising cost of fuel, a move it later admitted had hit sales.

Sukh Rayat, EMEA vice president of sales at Avnet Technology Solutions, told MicroScope there was no room to absorb increased costs in the supply chain. "Our freight costs are going up and we clearly have to pass these onto our customers."

Alex Tatham, sales and marketing director at Westcoast, said it had adopted a "watching brief" but agreed it was "inevitable" that rising transportation costs would be pushed down the channel.

"Products do not get from A to B on a bike, any price rises will be passed on," he told MicroScope.

Joe Fagan, CMS Peripherals group product marketing manager, argued the channel could get smarter about the way it delivered kit.

"We have to continue to get slicker from a logistics perspective, perhaps consolidating shipments or opting for two to three day delivery times as opposed to next day," he said.


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