Thursday 29 January 2015

The Big Disconnect - Crude Oil, Jet Fuel and Air Freight Fuel Surcharges...


Good evening All

We’re all aware of the collapse in the price of crude oil, which has recently fallen below USD 50 a barrel, a fall of 57% since its peak in Jun-14 - and the consequential fall in the cost of petrol and diesel at the pumps - a welcome relief to hard pressed hauliers and motorists.

The government have made it very plain that they will be watching the oil companies extremely closely to ensure that these savings are passed on to motorists / hauliers to benefit the wider economy but it seems we have some sort of disconnect when it comes to international logistics.
We manage the freight and logistics models for customers of various sizes and deal with several forwarders so feel that we have a pretty good perspective.

And here’s my point - with air freight in particular - how it is that we’re not seeing reductions in air freight fuel surcharges. We’ve done some analysis and have come to a rather disconcerting conclusion. It seems the price of jet fuel and crude are closely linked, and that jet fuel costs have fallen by 45% between Jul-14 and Jan-15 however fuel surcharges have hardly moved. On five major airlines flying across the North Atlantic, we found that fuel surcharges were an average of USD 1.07 per kilo last April, and many had been at that level for at least a year. And today, the average fuel surcharge for those same 5 airlines is, would you believe it, USD 1.06 per kilo!


http://www.iata.org/publications/economics/fuel-monitor/Pages/price-development.aspx

Given that on many trade lanes, FSC is a significant part of the air freight cost, and sometimes as much or even more than the core airport-airport rate, then surely the airlines have a duty to pass on these large falls in their costs via forwarders to UK importers and exporters just as the oil companies have with petrol and diesel at the pumps.

Andy Cliff
Director
Straightforward Consultancy Ltd - logistics simplified



Straightforward Consultancy Ltd
4, Beckett Drive
Winwick Park
Warrington
Cheshire
WA2 8XJ

Tel : 07934 443492
Email : andy@straightforwardconsultancy.co.uk
Web :
www.straightforwardconsultancy.co.uk

Blog : http://straightforwardconsultancy.blogspot.co.uk/
Twitter: @AndyCliffSCL
Linkedin:
http://uk.linkedin.com/pub/andy-cliff/1a/43/72
Skype:
andy.cliff1@skype.com

Friday 23 January 2015

2014 Review and Why Customers Always Come First

Good evening All

As my co-director has just reminded me, I haven't updated our blog for quite a while now for which I apologise! Thing is, 2014 was our best year to date, surpassing even our record year in 2013 which meant a heavy focus on our customers.

When it comes to a toss up between spending time on existing customers and their challenges and time on sales, existing customers always win, hands down - why? Because our customers remember the challenges and that we were right there alongside them and actively resolving a situation or influencing the outcome - and that's probably why they stay with us year on year (our first customer from 2010 is still on board today).


Also, when we carry out one of our Freight Reviews for a brand new client, we are completely refreshing their logistics model - cost - service levels - Customs compliance (a time consuming but worthwhile process) and it's really important to us that not only do we achieve or exceed the results we promised in our proposal, but that we monitor the traffic closely until it's completely bedded in and as  a result of that we neglected our blog, Logistics Simplified.

Having said that, we did remain very active on other platforms such as LinkedIn and Twitter and I should also mention that we launched our new website in Sep-14, something we spent around 4-5 months on. My wife and co-director Diane Cliff was the lead on this, and working alongside a graphic designer and the web design company, she delivered a superb result in that we retained the simple and straightforward feel of the site but refreshed our strap line to Logistics Simplified and also more clearly defined the 4 services we offer today - Freight Reviews, Freight Management, Customs Compliance and Consultancy, something the old site didn't convey that well.

Now I've made a start and revived our blog I will keep it going and share our continuing journey with you!

Kind Regards



Andy Cliff
Director
Straightforward Consultancy LtdEmail : andy@straightforwardconsultancy.co.uk
Web :
www.straightforwardconsultancy.co.uk

Blog : http://straightforwardconsultancy.blogspot.co.uk/
Twitter: @AndyCliffSCL
Linkedin:
http://uk.linkedin.com/pub/andy-cliff/1a/43/72
Skype:
andy.cliff1@skype.com