The low fuel prices which have remained at such levels consistently for quite a while have an inevitable effect on the transportation services. For the European logistics network, whose member companies provide daily freight forwarding services to all European countries, these low fuel prices have a positive effect, in respect to: lower fuel costs and the possibility for offering more forwarding destinations have increased. The use of lower priced fuel is beneficial for the customers of the freight forwarders too.
Types of transport used by freight forwarders Europe
- road
- railroad
- water air
The use of a specific transport type depends on the route. The combination of several types of transport which is done to achieve lower prices contributes for more favourable forwarding prices for the customers.
The affect that low fuel prices has on road transport
With the lower fuel prices for forwarding provided by freight forwarders Europe, there are lower costs for fuel loading. This means that the international freight forwarders can support a larger number of regular lines to the main destinations in different European countries. The customers can take advantage of the road transport offered more often, which is more convenient because it offers easy reach to highway transport.
Also, the lower road transport costs which until recently were relatively higher than water or rail transport allows for more customers to choose it for the forwarding of their goods and cargo. This allows for an increase of the revenues from this type of forwarding for the list of logistics companies.
Last but not least, in order to meet the growing demand of road transport, the network of freight forwarders can now use their less economical road transport vehicles for the forwarding services. This also contributes to the growing volumes of the forwarding services offered.
Railroad transport and lower fuel prices
As we already mentioned, the cheaper fuel and the increased offering of road groupage services has led to the redirection of customers towards road transport. Rail transport is cheaper than road transport but the member companies of IFA are taking advantage of the lower prices for road based transport which is slightly more expensive but is much faster. This allows them to provide their customers with more road transport offers.
Water transport and the lower fuel prices
Water transport has two advantages, namely: it is the cheapest of all and it allows for the forwarding of large quantities of goods and cargo at once. Before the tendency of the low fuel costs started, the forwarders throughout Europe used only larger ships and vessels for water transport. Now, with the lower fuel costs, they can hire smaller ships which allows for more frequent forwarding of goods and cargo.
Air transport and the lower fuel prices
Air transport is the fastest means for freight forwarding, but it is the most expensive one too. It is indispensable for express forwarding services, and now with the lower fuel prices is becoming more affordable. About 40% of the costs for this type of transport are for fuel. Given the lowered fuel prices, the European network for transportation can provide air transport forwarding services to its customers more often and at lower prices. The lowered prices allow for the use of less economical airplanes for freight forwarding, just like in the road transport forwarding. This allows for IFA customers to take advantage of the faster air freight forwarding services more often. The increase of freight forwarding services is beneficial for the companies offering international freight forwarding too.