Fleet owners who use delivery routing software in their daily operations have the ability to protect their businesses from many of the unpredictable variables that could negatively impact overall productivity.
No matter what kind of company or the size of the vehicles used, paying for fuel continues to be one of the most significant overhead costs associated with managing ground transportation assignments and shipments. Despite recent developments in domestic production of renewable energy, current technology has yet to seep into the mainstream automotive industry. As a result, the vans, pickups and heavy-duty trucks primarily used in today's fleets still require either regular gasoline or diesel - both of which are notoriously prone to sudden price shifts based on a large number of external factors.
Opposing viewpoints on future oil prices
Many industry experts have suggested that the recent boom in U.S. oil and gas production will play a significant role in lowering market prices for engine fuel in the long run. However, a recent article in the online global economics publication Quartz said such an occurrence ultimately depends on international activity. January kicked off with a substantial drop in global oil prices, which the website reported was primarily due to an economic slowdown in China, as well as a temporary halt to protests that had previously blocked Libyan crude oil exports from leaving the country.
In fact, long-term forecasts for oil prices have polarized economists for the past year. A recent report from Citibank highlighting the organization's global commodities outlook for 2014 predicted U.S. production of oil and gas will help keep the price of crude down to an average of $80 per barrel through 2020.
"The bearish pressures on the oil market are growing and looking less likely to be derailed by supply disruptions in 2014, given the already-high levels impacting the market," the report stated.
At the same time, other economic experts have essentially argued the opposite. According toQuartz, the research group Sanford Bernstein said the most recent decrease in prices is simply a minor fluctuation in what will ultimately be a decade-long period of dwindling supplies. The organization even estimated oil prices will reach $158 per barrel in 2020.
"Bernstein's arguments, among others, are that the U.S. surge will be less than many expect, that global demand will surpass supply growth, and that OPEC nations can't subsist at sub-$100-a-barrel and will cut production to hold that as a price bottom," the website reported.
In other words, the average business that specializes in ground transportation may or may not face a significant increase in overhead costs over the next several years. Such unpredictability can have a negative impact on not only company morale, but on productivity as well. However, rather than worrying about spending excessive amounts of money on fuel, managers can instead introduce automated tools such as route optimization software to make more efficient use of time spent on the road. No matter the size of the vehicle, the ability to plan ahead, identify faster courses and consolidate multiple deliveries into one trip will make it much easier for businesses to avoid the international oil market's continued guessing game.
Business still have their eyes on expansion
Embracing technology will be especially important for shipping agencies as the U.S. economy picks up in other regards. For example, 4-traders reported that employment and manufacturing data from December 2013 is likely to paint a positive picture for firms as 2014 kicks into full gear. Specifically, industry experts anticipated U.S. businesses to have added 197,000 new jobs last month. While that number would be slightly less than November's increase of 203,000 jobs, the overall unemployment rate would remain at a five-year low of 7 percent.
As the economy improves, fleet owners may find themselves handling a larger number of shipments on a daily basis. Without the right technology, such a boost in activity may ultimately be a hindrance. Managers must be sure to streamline their ongoing operations with direct route software that increases efficiency and reduces the need to spend crippling amounts of money on fuel. Taking advantage of automated tools in the midst of a nationwide upswing will help ensure business growth for individual firms.