As if the transportation world has not been crazy enough these past few years, we are currently seeing record-high diesel prices. If you are not sure where to check current prices, go to the U.S. Energy Information Administration website to find them (Gasoline and Diesel Fuel Update – U.S. Energy Information Administration (EIA)). You may be asking yourself, “As a shipper, do rising fuel costs even affect me?” The short answer: Absolutely. Diesel is a top three input cost for carriers, normally being their top expense. How can you look to manage this current environment so your bottom line feels minimal impact?
The best way to manage any supply chain disruption is to be transparent and turn to your partners in order to collaborate on a solution. It is important to make yourself aware of how your carriers are managing these headwinds. Trucking companies will deploy a multitude of solutions, however there are three main ones they can consider:
- Eliminating empty miles: This can be a big drag on carrier’s bottom line during all times. If they can reduce this, they will be saving on fuel since it’s not “out-of-pocket.”
- Planning optimal routes: This has to do with load times, transport times, and highway miles. They will always look to load during off-traffic hours, minimize transport times, and avoid congested roadways or stop/starts.
- Reducing idle times: The U.S. Department of Energy has said that idling burns a significant amount of fuel. The longer they are waiting at your facility, the more fuel they will burn.
You can use these headwinds and turn them into a positive for you as a shipper. Become a shipper of choice! Address these through unique solutions that will set you apart from your competitors. Look at some possible solutions below and make sure to involve your partners when drafting your own.
- Plan ideal routing times: If you are scheduling appointments right during rush hour, this can really make an impact on their fuel efficiency. Critique your load hours so carriers can avoid heavy congestion.
- Practice efficient loading: A study from the University of Stanford shows that fuel efficiency was tremendously impacted when a load was mispositioned. This could mean stacking evenly or even shifting loads to a certain side. Also, keep your loads under 44,500 pounds. Learn from your carriers on their equipment efficiency and what works for them.
- Decrease load times: This will reduce idling while also providing the driver with better time efficiency.
- Incentives: Increase your fuel surcharges or even provide gas cards. This shows you are cognizant of the carriers struggles, and these can really bring you a tremendous competitive advantage.