2005 is witnessing many challenges for the logistics and transportation industry. Natural catastrophes coming one after another, and continued increases in oil prices have greatly impacted logistics and transportation enterprises. How can these enterprises manage where competition is fierce?

The oil price increase is causing unbearable cost increases. Facing this pressure, Hercules Transportation has had to shrink its profit margin to an extent acceptable. To ensure quality service and eliminate the pressure on drivers, Hercules Transportation continues to provide drivers allowances and has not asked for additional fares from its clients. This measure strengthens drivers' confidence that the company is capable of overcoming the obstacles caused by these unexpected factors, like the oil price increases.

To decrease pressure on transportation enterprises, the Shenzhen Trailer Association announced on August 23 that enterprises are encouraged to add extra fees for oil, at a rate of RMB0.5 per kilometer. But, is it feasible to require clients to pay more? What is the solution that will completely solve these problems?

Thinking over the questions and learning from this event, Hercules Transportation will attach more importance to implementing scientific management, optimizing operational procedures, decreasing comprehensive costs, and strengthening customer relationships. All of these will improve the enterprise's capabilities to fight such risks and keep its leading position in the land transportation industry.