News

Rising fuel prices increase cost of IT

Karl Flinders

IT departments are facing higher costs following a decision by the world's largest IT distributor to pass on the cost of rising fuel prices.

Ingram Micro has said it will charge its reseller partners for freight - an extra cost that willl inevitably be passed on to end users.

"Past practice has seen Ingram Micro absorb significant annual freight costs for shipping the products it distributes to resellers. Rapidly rising fuel costs mean that this practice can no longer be continued. Accordingly, Ingram Micro will from now on recover the full cost of freight by means of a freight charge on all [reseller] orders," the company said.

The cost of a barrel of oil is rising, pushing up transportation prices. Crude oil is over $145 a barrel on world markets, compared to $90 in January, according to the AA fuel report for that month.

Doss Etter, director of external affairs at the Freight Transport Association, said there has been a 40% increase in the price of diesel over the past year as a result of increasing oil costs.

"It is inevitable that the extra costs will be captured by an increased price," added Etter. He said transport costs probably make up 1% to 2% of the overall cost of high-value goods such as computers.

Stephen Alambritis, head of public affairs at the Federation of Small Businesses (FSB) said the extra costs of transportation of products and services is already being passed on to businesses.

"They are feeling the pinch and are being charged more for receiving products," said Alambritis.

He said in a recent poll of FSB members, 90% said the rise in fuel costs were impacting their business enough for them to predict no business growth over the next 12 months. A total of 40% said if the fuel costs continued to increase they would have to lay off staff.

The FSB has called on the government to cancel the proposed 2p rise in fuel duty.





Email Alerts

Register now to receive ComputerWeekly.com IT-related news, guides and more, delivered to your inbox.
By submitting you agree to receive email from TechTarget and its partners. If you reside outside of the United States, you consent to having your personal data transferred to and processed in the United States. Privacy
 

COMMENTS powered by Disqus  //  Commenting policy