by Derek Singleton, ERP Analyst, Software Advice
The era of cheap oil is over. The last few years have seen high fuel prices and an increasingly volatile oil and gas market. In fact, 2011 set the record for the highest average inflation-adjusted fuel price in a given year. By all indications, 2012 will bring more of the same, as shown in the graph below, with a projected diesel price of $3.85 a gallon–a 40 percent increase over the 2010 average.
For shippers and carriers, rising fuel costs are particularly problematic. According to a recent Inbound Logistics study, fuel is the second largest cost for carriers after employee compensation.
The good news? Careful planning and the use of predictive technologies–such as distribution business software–can minimize the impact fuel costs have on the bottom line. Companies that manage a fleet can cope with rising fuel costs using three general strategies:
1. Streamline fuel procurement;
2. Improve operations and fleet management; and,
3. Better plan delivery routes and shipment loads.
Read more about each strategy to contain fuel cost at the Software Advice blog