With unprecedented UK and Ireland fuel prices continuing to rise and even breaking the 2022 records, Andrew Tavener at Descartes explains how escalating geopolitical tensions are accelerating fuel price volatility, what this means for fleet operators in the short term, and how logistics businesses can respond to protect margins.
Andrew Tavener, Head of Fleet Marketing EMEA, Descartes, says the latest developments in the Middle East are reinforcing just how exposed fuel supply chains remain to geopolitical risk.
“With growing concern around potential disruption to the Strait of Hormuz, we’ve already seen upward pressure on wholesale prices and UK and Ireland forecourts. The knock-on effect of this has seen higher operating costs for fleet operators, especially those running large last-mile delivery networks where fuel remains one of the biggest expenses,” explained Andrew.
“What has taken us all by surprise is the speed at which these external shocks are translating into real operational costs. So, for fleet operators operating with razor thin profit margins, there’s very little buffer when it comes to pricing changes. Yet with customer expectations and delivery commitments remaining fixed, operators are undoubtedly finding themselves between a rock and a hard place.”
He added: “The immediate challenge for logistics teams now is to maintain profitable service levels without letting delivery costs spiral. The solution to managing this cost increase is to invest in route optimisation technology. This technology will help fleet operators plan more efficient routes, increasing delivery density and reducing unnecessary mileage. Ultimately, this means fleets can significantly limit the impact of fuel price volatility. Even small reductions in miles driven across hundreds of daily deliveries can translate into substantial cost savings.
“This isn’t just about planning better routes once a day. Operators need the ability to continuously adjust and re-optimise routes as conditions change, responding to delays, traffic, or last-minute order changes in real time. This level of agility is what will allow fleets to stay in control when fuel costs are moving unpredictably over the coming months.”
