Fleet managers responsible for transporting fuel and other energy products long distances may want to consider investing in logistics software tools to prepare their businesses for rapid industry expansion. The energy sector of the U.S. economy has experienced a variety of changes in the past decade. Whereas the country used to rely heavily oil imports from other nations, a recent reduction in petroleum use has signaled a relative boom in domestic fuel production. These trends have not only been good for energy producers and other related companies in the industry, but they have also created new opportunities for freight organizations to generate more revenue as well.
Energy production has quickly become a primarily domestic industry
According to the industry news website Fuel Fix, newly tapped natural gas reserves have led to a so-called "energy renaissance" in the U.S. Fuel companies have produced such large quantities of this alternative energy source that many industry experts said they anticipate a significant increase in exports in the coming year. In fact, Neil Irwin wrote in The Washington Post about how the nation's trade deficit has already decreased as a result of an increase in export activity from the energy industry. Between September and October, the deficit fell from $43 billion to $40.6 billion. Irwin said the abundance of domestic natural gas reserves has allowed the U.S. to largely reduce the amount of petroleum imported from oil-rich countries.
"The shift is visible both in the form of more fuels being exported and fewer imported," Irwin explained. "Most dramatically, so far this year the worth of crude oil the United States imported fell by $36.3 billion compared to the same period of 2012, a 13.7 percent drop. Crude oil exports, meanwhile, rose by $1.6 billion, a whopping 84 percent rise."
How has this growth affected fleet management companies?
The impacts of these trends are likely to have a positive impact on a variety of businesses with close ties to the energy industry. For example, a report from the American Petroleum Institute and the global professional services firm PwC found the rapidly expanding oil and gas industry in the U.S. has influenced economic activity in all 50 states, as well as Washington, D.C. According to the study, recent expansion created nearly 2 million new jobs in Texas in 2011. The total impact on gross national product was $1.2 trillion in the same year, or 8 percent of overall economic activity.
A boost in employment isn't the only major byproduct of a burgeoning fuel sector. The report also discovered indirect impacts through an increase in the purchase of capital goods from businesses in other industries. Energy production often has a large supply chain, which means transportation of raw materials, heavy machinery and the fuel products themselves is an especially important process - especially when production spans such a large portion of the country. For example, theKansas City Star reported many businesses are thriving in the wake of increased domestic production. Companies that manufacture steel pipes or other equipment used in the hydraulic fracturing process have all experienced a substantial increase in activity.
"I think almost every state has something tied to the energy boom. Even states that have practically no energy sector are seeing some benefit from it," Mark Vitner, a senior economist for the investment banking firm Wells Fargo Securities, told the Star. "I think it has the potential to be the type of game-changing event that shapes the economy for the next quarter-century."
Preparing for new business with trucking software
Successfully reaping the benefits of renewed industry growth doesn't simply happen on its own. Fleet managers especially need to position themselves for an increase in business activity with reliable tools and technology that streamline essential processes. For example, transportation software that automates many of the complicated tasks associated with long-distance deliveries of heavy-duty materials can lead to big savings in the future. The more assignments a firm takes, the harder it can be to organize schedules, meet deadlines and properly maintain vehicles. To take full advantage of the U.S. energy renaissance, fleet managers must be willing to invest in 21st century technology that is uniquely equipped to handle real-world challenges in today's dynamic marketplace.