Here we go again, AAA is reporting an increase in gas prices – with some areas seeing prices higher than they were a year ago. Some states, like Michigan for instance, are reporting nearly a $0.40 cent per gallon increase, and diesel fuel has been on the rise for the fifth straight week.
How are these increasing prices affecting your transportation logistics operations? Are you proactively thinking about how these high prices may impact business, or are you operating as usual?
Tracking your fleet’s fuel costs is something that you should be doing regularly, not just when they make national headlines. From management to routers, everyone involved in transportation operations should be aware of how fuel prices affect your bottom line. Creating a organizational and cultural awareness will help keep this issue on the radar screen at all times.
There are many different sources to find current fuel price information, one of which is AAA. They post a daily report that can help you monitor and manage fuel prices. It’s a simple resource that provides valuable information to help you calculate your current costs.
Understanding the implications of fluctuating fuel prices is key. As prices rise, your fleet’s cost per route and per stop increases. This means that deliveries and services calls that had once been profitable for your operation, may no longer be.
At the moment, reports show no indication of when fuel prices will begin trending downward, and in fact it appears as though prices may continue to trend upward.
So, what can you do to keep things under control, and not blow your fleet’s transportation budget on fuel?
Consider a reroute, or balancing your territories. Take a look at making adjustments to current planned or scheduled vehicle routes – consolidate trips or reduce frequency. Perhaps you can pull a truck off the road for a few weeks, or even permanently. Strategic vehicle routing and planning tools like those found in the Roadnet Transportation Suite can help you project potential outcomes from making these shifts before you decide which option is best.
Talk to your drivers about idling. Are your drivers idling rather than shutting down their engine so the cab stays cool? Many fleet operators would be surprised to find out how much time their vehicles are idling and what the reasons are for excessive idle time. Set idling parameters with your transportation operations team. Vehicle telematics devices can help track fleet idling, providing reports and real-time updates to measure idle time.
Whatever methods you deploy, it’s wise to evaluate your options before fuel prices become a major burden. Stay proactive when it comes to fuel price trends. Use multiple resources to help project trends for the future, such as the Short Term Energy Outlook released by the Energy Information Administration each month.
Don’t wait for prices to climb – stay ahead to the best of your ability and don’t be let fuel fluctuations damage your logistics operation’s profits.