managing transport costs and inflation impacts with truck finance
The surging inflation is narrowing the profit margin of Australian businesses; and truck finance might be a way to minimise the impact.
The Russian invasion of Ukraine isn’t only detrimental to those directly involved. It is also causing adverse effects around the globe. One noticeable contribution of the turmoil is the steep rise in fuel prices which has directly resulted in an inflation surge. Australians are definitely feeling the pinch as the cost-of-living rises. The increase in energy cost will likely shake household budgets and smash business profitability. And in some cases, leave certain people out of business, particularly those involved in the transport, trucking, or freight industries. This is where truck finance or auto financing can potentially help operators stay afloat amidst the surge.
Wheels will keep turning but at a cost
Australia is heavily reliant on the trucking and transport industry for delivering goods around the country. The shift towards online retail shopping brought on by the pandemic has also upped the demand for road transport operators but increased diesel price has given them a different hurdle to overcome.
According to the Transport Workers Union (TWU), the rise in fuel prices is having a devastating impact on the small profit margins of delivery and truck drivers across Australia. Needing to increase their prices and adjust rates to reflect the fuel market doesn’t help situations either. Hence, the federal government has allocated a short-term cut to the fuel excise (so prices no longer exceed the $2 per litre mark over the next six months), it’s just a temporary solution. If fuel prices keep reducing and return to the way they were, the blow will lessen. However, at this point, it remains uncertain whether oil prices would move down naturally from their current elevated state. Though the situation may seem dire at the moment, especially for trucking and freight companies, there are methods to managing transport costs during this time.
truck finance is an option
A remedy for the freight demand during this unsettling time is truck finance (which falls under Equipment Finance/Asset Finance) or auto financing/vehicle finance. These subsets of business finance will help keep a healthy cash flow going or upgrade your truck or vehicle to manage growth. They’ll help you avoid dipping into your savings and sacrificing your business’ security.
Asset Finance, also known as Equipment Finance, is a type of business loan used for acquiring equipment and assets that are needed for growth. This funding solution allows companies to split the full cost into monthly payments over an agreed period of time. Therefore, giving you flexibility minus the stress of having to pay for items upfront. Read more about Thornmoney’s Asset Finance Suite. After understanding your individual situation and goals, Thornmoney will come up with a tailored loan that will suit you best.
For those who are wary about the risk of taking out this kind of loan, many businesses believe it prepares them for the future. Additionally, they trust that the returns will make up for the initial investments as well.
Disclaimer: This information is for general information purposes only. Therefore, the information contained herein does not constitute financial or professional advice or a recommendation. Ultimately, it has not been prepared with reference to your financial circumstances or business and should not be relied on as such. You should seek your own independent financial, legal and taxation advice as to whether or not this information is appropriate for you.
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