"Fuel prices are denting profits," says transport entrepreneur

by Kate Pritchard - Monday, 7th July 2008 -

Petrol prices look set to hit £6 a gallon. Industry experts predict oil will top $150 a barrel. And the government is still muttering about increasing fuel duty by 2p. No wonder courier entrepreneur Kate Lester is fuming.

“Fuel now constitutes 40 per cent of most firms’ vehicle operating costs,” says Lester, who founded Guildford-based courier company Diamond in 1992.

“There are 3,500 courier companies in this country. Competition is tough so we can’t put prices up. Instead, we have to squeeze our profit margins.

“We’re lucky. We saw it coming,” she says. “We’ve diversified into other areas – such as storage and passport services – and we always try to ‘co-load’. If we’ve got a one-way delivery to Manchester, we’ll hook up with another courier to arrange return work.”

Lester says that her £1.2m turnover will remain “static” in the next financial year.

“That’s pretty good,” she says. “Rising fuel prices have blown a lot of smaller players out of the water.”

Other transport entrepreneurs have waded into the debate, hitting out at the government's proposed 2p hike in fuel duty. Read their comments here.

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