Couriers experiencing rising costs and more competition

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#Alternative Fuels, #Industry News
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People moving boxes into a van

Right Fuel Card recently surveyed businesses within their SME customer base to find out how optimistic they feel about the future and identify any pain points they’re currently experiencing.

This survey revealed that most businesses feel more confident than last year. However, couriers are the least optimistic industry and 94% had no plans to switch from petrol and diesel vehicles in the next 12 months.

Rising costs and a competitive marketplace for couriers

Around 70% of couriers surveyed felt optimistic about the upcoming year - a much more positive outlook than last year when 60% of couriers were feeling pessimistic about the future. This was at a time of extreme fuel prices which may explain the previously high negative sentiment.

Although this shows progress, businesses are still facing various challenges, including the current cost-of-living crisis and an increasingly competitive market.

graph showing confidence of couriers

Rising costs have negatively impacted all industries over the last few years, however as many couriers are self-employed or on zero-hour contracts, income can be less consistent. As a result, over 50% of those surveyed had expressed concern about their personal finances.

Graph showing living crisis impact on mental health

As well as rising costs, couriers are facing more competition than ever before, making it harder for businesses to stand out. Customers expect fast, efficient, and trackable deliveries which can be challenging for smaller businesses with limited budgets. With costs increasing and larger companies like Royal Mail and DHL dominating the market, it’s understandable that courier firms have concerns about the future.  

Growing concerns over the quality and security of UK service stations

Aside from rising costs, one of the key concerns that couriers expressed in this survey, was the quality and safety of service stations in the UK with 75% stating that this has negatively impacted drivers.

Graph showing key pain points

Some courier firms require their drivers to travel across the country, so it’s important that service stations have enough quality facilities and a high level of security to prevent thefts. This has been a contested topic recently as drivers across all industries are criticising the standard of UK service stations.

Service stations are often a crucial component of a driver’s working environment, so poor facilities and a lack of security can negatively impact their mental health, profits, and outlook on the future.

Driving range of alternative fuels deterring couriers

As part of this survey, we asked businesses in the courier industry if they plan to move to alternative fuels in the next 12 months and 94% said no and only 3% have already made the switch.

Graph showing plan to move to alternate fuels

Couriers tend to use cars and vans for their business, so it’s somewhat surprising that only a limited number are willing to consider using alternative fuels, as it’s these types of vehicles which have been the focus of EV technology. Although the number of available models, barriers to alternative fuels remain. The primary concerns that couriers have are the limited driving range and cost of these vehicles.

graph showing the barriers of alternative fuels

  • Vehicle range – There are many concerns that the limited driving range of EVs means they’ll be incapable of handling the needs of businesses. whereas Some electric cars can now travel up to 395 miles before needing to recharge, the capability of electric vans is more limited, with a driving range of up to 250 miles. As couriers are constantly on the move and need to make deliveries efficiently, it’s impractical to stop and recharge on a regular basis.
  • Cost – Vehicles that use alternative fuels are currently considerably more expensive than their traditional ICE counterparts. Although they can save drivers money in the long run as their maintenance and insurance are often cheaper, the initial purchase cost is off-putting for businesses.
  • Access to infrastructure – For couriers that work in more remote locations, alternative fuels would not yet be practical as the infrastructure has primarily been developed around large cities. Over 6.6 million households in the UK do not have access to off-street parking so there’s a reliance on public charging points which can be unreliable and an inconvenient option for couriers.
  • Slow charging time – Although the charging infrastructure is improving, it still takes far longer to recharge an EV than it does to refuel a conventional vehicle. This can affect the efficiency of courier services, especially for long-distance deliveries or time-sensitive trips. Refuelling a hydrogen vehicle is much faster, however, these are not yet accessible enough to be used by couriers.

Some couriers in this survey also raised concerns about whether the impact of creating and disposing of EV batteries would be detrimental to the environment. The lack of trust in alternative fuels has therefore deterred them from making the switch. Nevertheless, with the upcoming ban on the sale of new petrol and diesel vehicles, businesses will need to start considering greener options soon.

As most businesses are planning to use petrol and diesel vehicles for the foreseeable future, we’re committed to helping them save time and money on their fuel expenditure. Discover our range of fuel cards or call our team at 0113 202 5110 to discuss your options further.

We plan to introduce a wider range of fuel cards which can be used by a variety of vehicles, so we’ve introduced an EV alternative to help ease the transition for couriers. You can apply for a BP Fuel and Charge or Shell Fuel and EV card online.

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Matt Dodds
Head of Strategic Sales and Partnerships

With over 14 years of experience across two of the leading fuel card companies in the UK, Matt Dodds joined RFC Edenred to help lead the development of products to support our customer's move to EV and other alternative fuels, a transition he feels passionately about.