Low petrol prices fuel Target carriage price slash

May 14:

Distributor Target Components has slashed some of its carriage charges for resellers after securing a better deal from its courier partner DPD.

Talking to CRN, Target managing director Paul Cubbage said the move – which sees Target slash charges on web and phone next-day deliveries from £6.95 to £4.95 – reflects the distributor's role of driving down cost in the channel.

The average price of a litre of unleaded petrol stood at £1.14 in April, slightly higher than January (£1.08) but well below April 2014 (£1.30), April 2013 (£1.37) and April 2012 (£1.42).

But Cubbage said not all distributors have moved to squeeze savings from their courier partners.

"Everybody was pretty quick to put up prices when fuel prices were going up, but they've been pretty low for a while and we've managed to get some savings from DPD that we can pass on to our customers," he said.

"I'm not aware of any [other distributors] looking to cut their carriage prices. If we can drive costs down in the channel, that's what we're here for. Yes, we have to get the right products at the right prices but where we fit is being able to move this stuff around at great prices and then helping our customers sell the stuff."

Cubbage (pictured) said Castleford-based Target had also negotiated a better rate for Saturday deliveries, with charges now standing at £9.75 or £14.75 pre-noon.

Alex Tatham, managing director at Westcoast, said: "It's very rare that we put our prices up for carriage and we haven't changed them at all [in recent years] and are still lower than anyone else. Our standard carriage charge is £6.50."

Cubbage questioned more generally whether or not the channel has done enough to pass on the cost savings that accompany any fall in oil prices.

"The price of oil impacts on all sorts of things," he said. "The cost of plastic goes up when oil goes up so there's got to be some cost savings there as well. The price of electrical has gone down five or six per cent but I don't think IT is going the same way – prices certainly haven't responded in proportion to oil prices."

Source: http://www.channelweb.co.uk/crn-uk/news/2408577/low-petrol-prices-fuel-target-carriage-price-slash#