A fleet of bakery trucks owned by Innscor Africa. Image credit innscorafrica.com

A fleet of bakery trucks owned by Innscor Africa. Image credit innscorafrica.com

ZIMSEC O Level Commerce Notes: Transport: Advantages and Disadvantages of a trader owning their fleet of vehicles

Advantages to a trader of operating own fleet of vehicles.

  • Goods can be collected and delivered at any time.
  • Goods in transit are safe from theft and damage
  • Minimises the delays of goods which are ready to be ferried.
  • There is personal contact with customers
  • The delivery persons:
  • Can deal with queries from customers.
  • Have good knowledge in handling the firm’s products
  • Conduct transaction en route e.g. sell more goods, collect payments, collect crates for example a bakery vehicle.
  • Return loads are possible e.g. empties and crates.
  • Can advertise on the sides of vehicles.
  • There are special vehicles for special cargo.
  • Vehicles can be hired out to earn extra income for the trader.
  • The status symbol of running their own fleet of vehicles.
  • It is cheap and cost effective if the vehicles are adequately utilised.
  • Can be used to ferry workers to and from work.
  • Independent of public transport strikes and delays.

 

Disadvantages of a trader owning and operating their own fleet of vehicles.

  • The initial capital cost of buying the vehicles is high
  • High maintenance and servicing costs.
  • The vehicles depreciate in value.
  • High insurance costs for the vehicles.
  • The vehicles may be underutilized especially if the fleet owner is a small business with infrequent deliveries to make.
  • The vehicles may be misused.

To access more topics go to the Commerce Notes page.


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