Like all Menzies Distribution’s customers Piush Patel (Leaders, Deptford, SE London) got a letter telling him his weekly carriage charges were going up - in his case to £37.12. The letter said in part: “Our industry has been affected this year by volatile fuel pricing and continued falling sales in the print media sector. While the first of these has made headlines, its effect on our supply chain is outweighed by the second.”
One assumes from this that, although fuel prices have dropped, fewer sales of news and magazines has resulted in less profit and the one didn’t make up for the other.
Well, Piush isn’t buying it. He says: “Petrol’s gone through the floor and they’re expecting us to pay for their falling sales.”
He did some rough sums on the phone, saying: “Ball park figure: 30 drops, one driver at say an average of £25 per customer. That’s £750 a week or £40K a year for one man and a van. They think we’re stupid.”
I put this to Menzies and got the following response: “Bringing news and magazine supplies to retailers is a major logistical undertaking, which requires a substantial network of depots, vehicles and drivers. The Menzies network is supported both by revenue from sales and by Carriage Service Charges (CSC).
“That CSC is designed to recover costs associated with delivering newstrade products to our customers and collecting unsold products. It is based not simply on fuel costs, but the cost of wages associated with delivery collection work, vehicle leasing and ancillary elements including insurance and vehicle maintenance. Menzies Distribution recovers only part of these costs.
“When revenues decline as they have, but we continue to drive the same miles, with the same vans and drivers, we must take steps to bridge the gap; first by controlling costs within our business, and second by reviewing our CSC recovery. Menzies Distribution has made consistent efficiencies over the past decade, but these savings alone have not been enough to outpace falling sales. While we understand that no cost is welcome in business, CSC is a necessary component in supporting the supply chain which makes it possible for our customers to put products on their counter every morning.”