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SINGAPORE: Courier company boss Wilson Gomas found himself in a bind this week — before he could even decide if higher petrol and Electronic Road Pricing (ERP) costs could be passed on to customers without a drastic drop in business, three of his 14 dispatch riders threatened to quit if he didn’t increase their transport allowance.
The $15 they each get daily was no longer enough to pay for trips in and out of the Central Business District, and the riders were asking for a $5 increase.
Yet, with the courier business so “competitive”, Mr Gomas, the managing director of Wilson Courier Services, fears the backlash from clients if he raises delivery fees by $2 — $1 for higher petrol prices and $1 for ERP gantry charges.
Like Mr Gomas, players in the logistics and sales industry told Today they have been hit hard by the spike in transport costs — diesel and petrol prices have climbed steadily over the past year and more ERP gantries have been installed and charges revised.
While some are mulling over the option of increasing their employees’ transport allowance, others are trying to cut costs in creative ways.
A furniture retailer said he would probably increase his sales staff’s monthly transport allowance by $100, from the current $500.
“The staff need to go around to see clients and take measurements onsite, and some of them are now taking a bus instead of a cab when they can,” said the retailer, who declined to be named.
He currently imposes a $25 delivery charge for purchases below $100, and said the minimum purchase sum may be raised to avoid a dive in profits. But increasing delivery charges is out of question for now, as the furniture retail market is “price-sensitive”.
Moving company Shalom Movers has seen a 30 per cent hike in transport bills, but instead of passing on costs to customers, “we just have to expand faster and innovate”, said its sales manager Gideon Lam. For instance, the company is integrating operations by manufacturing its own packaging.
To help employees save money, Shalom allows its 20 sales and 80 delivery staff to drive company vehicles home. Delivery drivers and assistants living in the same area are also paired as a team and car pool to work, said Mr Lam.
Over at companies with sizeable sales forces, “a handful” have adjusted their travel allowances, according to human resource firm The GMP Group.
The increase is “small”, typically about $100 a month, said its corporate services senior manager Josh Goh. This is because employers “do not want to stretch themselves in the current uncertain business climate”.
Sales staff also appear hesitant to ask for an increase. Household appliances salesman Desmond Gui, 41, said he has been using his sales commission and meal allowance to foot higher transport costs.
“Companies are also facing higher costs, so we haven’t asked for an increase. ERP used to be something that’s good to have, but now it doesn’t make sense anymore,” he said.
Meanwhile, Mr Gomas started distributing flyers to customers yesterday, explaining why a price hike was necessary. According to him, many courier companies are increasing their charges by $1 to $2 per trip. This is because courier firms generally do not have the financial muscle to absorb higher costs — and with many dispatch riders already earning less than $1,500 a month, begrudging them an increase in allowance is hard, said Mr Gomas.
“I told the three staff not to quit first and to give me until Friday — that’s when I will see the customers’ reaction. Hopefully, the loyal ones will stay with me,” he said. - TODAY/sh
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