Cost savings – Credit Crunch Support Guide

Specialist help from FTA

Freight operators are facing huge pressure on costs as a result of the sharp fall in business activity and consumer demand in the UK and the rapid tightening of credit. This has been exacerbated by intense price volatility in key inputs such as fuel. As a result business plans are having to be reconsidered and recast. This guide sets out the range of information services and products FTA can provide to help during the current economic crisis.

Falling levels of business

Avoiding unnecessary cost

• maintain a core fleet resource which is commensurate with business levels
• regularly review vehicle schedules and deployment to accommodate falling volumes
• capitalise on improved journey time predictability due to falling traffic levels
• utilise flexible employment practices

Manage down cost base for core fleets

• review individual cost components having prioritised where effort can be most effectively focused
• capitalise on weak trading conditions in negotiations with suppliers
• remember to also plan for the upturn!

Cost unpredictability and cost recovery

• look at medium term oil price forecasts when making strategic fuel purchase decisions
• rebase contracts on new rate infl ation mechanism
• review contractual relationships with customers to allow input costs to be passed on directly

Keeping focused on your O licence obligations and ensuring that your operation is compliant should still remain an essential part of your business despite the current economic climate. Investment in ways to improve your compliance will enhance management control on key cost centres such as drivers and vehicle condition related maintenance.

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