Four years ago we ran one of my favorite ads, the “Horse and Buggy” ad. In 2008 fuel prices were climbing and diesel peaked at $4.207/gallon on August 18. Shippers, carriers, consumers were struggling with rising fuel charges and everyone was looking for ways to cut transportation costs.
It may be time to run the ad again.
This week the Department of Energy (DOE) announced that the average price of diesel rose .5 cents to $4.147 a gallon, which is the highest diesel has climbed since that summer day in 2008. I believe it won’t be long until we reach the $4.207/gallon price and, more than likely, surpass it. This is the ninth straight increase we’ve seen, and in the past three months the average price for a gallon of diesel has risen 36.4 cents.
Fuel costs are on an upward trajectory and shippers need to get resourceful, creative. Of course horse-drawn transportation hasn’t been a viable option since the 1800s, but the point is made. My advice: Don’t lament the situation, leverage it.
Now is the perfect opportunity to step back and really dig into your freight operations. Fuel costs are beyond our control, so we must control what we can. When was the last time you explored opportunities for freight optimization? Shipment aggregation, consolidation, co-loading, continuous move routing, mode-shifting. Even a small reduction in deadhead miles will contribute to your bottom line.
Maybe you don’t think these practices are an option for you, but odds are in your favor. Over the years we’ve worked with countless shippers whom have been surprised to discover that yes, freight optimization can work for them. And, what’s more, they don’t have to make trade-offs between cost reduction and customer satisfaction.
LMS has published a white paper that explores optimization tactics in detail – “Ten Best Practices for Motor Freight Management.” It’s a good place to start and it’s free; you can request it via this link. Better yet, we can perform a free analysis of your transportation data. Using our proprietary technology, we will quickly review your freight activities to identify viable optimization opportunities within your network. If you are interested, contact us (firstname.lastname@example.org).
Regardless of how you choose to go about your research, know that it is an important exercise that can help you mitigate the effects of rising fuel costs. Chances are great that your efforts will lead you to viable cost-saving initiatives, and, chances are, none of them will involve horses.