Rising freight costs to be passed on to retailers

More distributors end free freight

Avnet and Tech Data have joined the likes of Ingram Micro and instituted new fees to counter rising freight costs as the price of fuel soars.

Distributor Tech Data has added a $2 handling fee on all its orders, following a similar move by rival Ingram Micro in early August. Avnet has started a similar policy, and Synnex is currently considering whether or not to institute the fees.

The rising cost of fuel, coupled with a drop in hardware prices has forced the move as companies seek to save shrinking margins.

“IT distribution had evolved to offer free freight while the vast majority of other businesses made you pay,” said Tech Data CEO, Bob Dutkowsky. “That made sense when gas was 50 cents a gallon, but now gas is $4 a gallon.

“In the grand scheme of things $2 is not tremendous and its still does not cover our costs. This is not a profit initiative by Tech Data. Our goal is to defray some of the costs of shipping and freight.”

In a move against such changes, UK distributor Target Components has abolished carriage charges for orders over £500.

Link: Channel Insider

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