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Efficient Distributors Stare Down Rising Gas Prices

Efficient Distributors Stare Down Rising Gas Prices

Rising fuel prices have an effect on everybody. From the commuter who drives 20 miles into the office, to the manufacturer that needs to keep their supply chain moving, to the distributor that depends on that fuel as a core component of a business. For the small distributor, gas price fluctuation can either be a godsend or a travesty depending on which way the needle points. When gas prices rise significantly, it becomes inevitable that some of the cost is going to be transferred to the consumer. This can wreak havoc with their business as it depends on a fleet of trucks to distribute their goods to other businesses. We’ll look at how smaller organizations can use information technology to keep their costs down when the costs at the pump rise.

Most distributors are either tied to a larger organization or contracted by one. For the smaller manufacturer that relies on efficient distribution of their product, regrettably the ability to keep shipping costs down is a major factor on the price of certain products. In 2018, with fuel supply outpacing demand for the first time since gas prices spiked in 2014, prices are again up and thus far it hasn’t made much of a difference for consumers.

This is because the distributor (or the manufacturer that has a distribution arm) looks at the increased cost as the cost of doing business, but as gas prices start to rise (they’ve gone up nearly 30% since May 2017), the more cost is transferred to them, the less they are apt to be as generous. This goes for delivery services and any other company that has a fleet of vehicles. With gas prices affecting so much of the economy, it’s a solid business strategy for the business that relies on petrol to look for solutions to mitigate the increased cost that depends on rising fuel prices. Information technology can provide such a solution.

Fleet and Asset Tracking
Tracking solutions can drive down the price of distribution by ensuring that each vehicle in your organization’s fleet is taking preferred and efficient routes. By finding the right routes, a company can not only cut down on fuel costs, it can cut down on the amount of maintenance that their fleet vehicles need, requiring less operational capital. Additionally, by deploying a fleet tracking solution, insurance for your fleet is reduced, saving your organization more money. Here’s how it works:

Each vehicle in the fleet is outfitted with GPS devices that can be tracked by Internet-connected endpoints outfitted with the tracking software. Using GPS technology, the software calculates the most fuel-efficient route. Other qualifiers can be entered to avoid things like construction, bottlenecks in traffic, and other cost-inducing situations. This allows an organization to reduce downtime, optimize their resources, maximize vehicle utilization, and provide prompt and dependable service.

The same technology can also track other assets and help manage your organization’s supply chain. By fully understanding what your shipping costs, both in procurement and in distribution, you can take steps you need to try to find unnecessary redundancy. If cutting your shipping costs by five or ten percent is as simple as finding gas-efficient routes and ordering from vendors who are closer, wouldn’t you do it?

If you would like to know more about fleet and asset tracking software, and how to leverage today’s newest technologies into a more efficient and lucrative business, call the IT professionals at CASS Tech today at (248) 538-7374.

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Friday, November 16, 2018

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