Tips to Maximize Delivery Efficiencies As Fuel Prices Skyrocket
By Carolina Ruiz • Published June 17, 2022 • 4 minute read
Saving fuel is a top-of-mind concern for everyone, everywhere with no relief in sight from record prices. The Energy Information Administration forecasts average retail gasoline prices will be $3.84 per gallon through September, which is by far the highest level of inflation-adjusted seasonal prices since 2014.
For those in the transportation industry, the meteoric rise in diesel prices has been more alarming. At the end of May, the national average price for diesel was $5.56, the highest on record. With 75% of all commercial vehicles registered in the U.S. powered by diesel, the stratospheric cost is not just straining company finances. It’s also taking a toll on the economy since more than 72% of all tonnage moves by truck.
The extra revenue that fuel marketers and distributors are getting by selling petroleum products at record prices is quickly offset by soaring delivery costs and mounting labor expenses. As fuel prices and record inflation take more out of consumer pocketbooks, drivers and office staff are searching for better job opportunities. This has been creating labor shortages that contribute to supply chain bottlenecks and delivery delays.
The direct impact on distributors
Distributors of fuel and liquid chemicals are concerned about soaring delivery costs, but their main priority is the same — to ensure that customers’ tanks never go empty. Out-of-stock products cause lost sales for customers, or worse, manufacturing shutdowns with far-reaching impacts.
Emergency fills are costly for distributors and pull capacity away from more profitable delivery schedules and routes. To avoid emergency fills and run outs, many distributors have fixed delivery schedules or “milk runs” for topping off customer tanks. This practice is laden with inefficiencies and redundancies.
Distributors have much room for improvement. The current industry average for delivery efficiency is 45% – meaning that distributors are filling tanks that are only 45% empty on delivery routes, which is contributing to increased fuel consumption by driving unnecessary miles.
Modern solutions to solve today’s challenges
Tank monitoring systems can provide distributors with greater visibility and insightful data to better plan deliveries with precision. Having real-time visibility of tank fill levels and historical usage data enables distributors to maximize the number of gallons delivered at each stop, which decreases the frequency of visits and miles per route.
Intelligent solutions can significantly reduce fuel usage by minimizing route mileage. Data shows that distributors who use the SkyBitz SmartTank solution for monitoring tank levels and automating route scheduling and planning have a delivery efficiency of more than 75%. Attaining high levels of efficiency doesn’t come at the expense of run outs. Having real-time visibility of tank levels and accurate forecasting decreases the risks of run outs while making routes more profitable.
Besides protecting or increasing profit margins, distributors can positively impact workforce retention and customer satisfaction. Tank monitoring systems also create greater delivery capacity by giving companies data they need to optimally plan deliveries based on actual and forecast demand, rather than predetermined schedules. This frees up capacity and staff resources to focus on more profitable activities and customers.
Reduce costs, optimize deliveries, and improve the customer experience. That’s a winning combination of benefits that distributors can expect from modern tank monitoring solutions with integrated route scheduling and planning tools. Contact SkyBitz to learn how to digitize your distribution business and save more time and fuel.