Diesel surges past S$4 a litre: Singapore businesses caught between rising costs and reluctant customers

But the remaining customers have rejected requests for higher charges. “We have no choice but to absorb the cost,” said Mr Lee, who is also hoping the government will step in to assist local logistics companies.

Last-mile delivery service provider Channel Management Systems has seen a 50 per cent increase in diesel costs since January. Its boss, Mr Henry Ong, said the company is unable to pass on higher expenses due to fixed contract rates, though he expects to eventually have to do so.

SingPost told CNA it is closely monitoring global energy prices and their impact on postal and logistics costs.

“At present, we have no immediate plans to introduce a fuel surcharge, but we are keeping a close watch on the situation should current market conditions persist,” a spokesperson said.

LOOKING AT ALTERNATIVES

The companies CNA spoke to are taking steps to manage the higher costs.

Westpoint Transit is in active discussions with fuel suppliers and expects prices to hover around current elevated levels over the next six to eight weeks, given that fuel costs are largely driven by conditions in the Middle East, said Mr Lee.

The company is working with diesel suppliers, fleet drivers and customers to optimise bus capacity relative to ridership, and is ramping up the use of electric buses within its fleet.

Singapore Logistics Association’s Mr Ng said companies are managing through operational adjustments such as route optimisation and tighter cost controls. Over the longer term, some are exploring alternative energy options including electric vehicles.

Not all operators can easily make the switch, however. SB Express Logistics’ Mr Lee said: “At present, there is nothing we can do.” 

The company anticipates fuel prices will remain volatile given ongoing geopolitical uncertainties, and is preparing by maintaining flexible pricing mechanisms and working with customers on sustainable price adjustments.

Singapore Cab Booking is similarly constrained. Electric vehicles are not a viable option for now, said Mr Khan.

“We are commercial vehicles, mostly using diesel. We cannot buy (electric vehicles) overnight.”