After years of pressure from a volatile U.S. economy, fleet managers are finding their operations to be relatively more stable, according to recent industry data. Freight organizations can leverage this momentum by investing in logistics software programs that allow for greater control of all the variables of a shipping operation.
A combination of stable fuel prices, an overall reduction in fuel consumption and lower maintenance costs have contributed to relatively minor changes in the amount of overhead spending required to maintain an effective transportation business in recent months. According to the 22nd annual operating cost survey conducted by the industry magazine Automotive Fleet, collective expenditures among commercial freight businesses managing a total of 775,556 vehicles measured no significant increase or decrease between August 2012 and August 2013.
"From a pricing standpoint, the market has remained relatively flat through most of the year, but we continue to see fleets heighten their focus on overall cost reduction strategies," Tony Piscopo, director of fleet management services for ARI Fleet Management, told Automotive Fleet. "Fleets are becoming increasingly sensitive to fuel costs and are initiating more fuel-saving programs this year over last."
The relative stability of fuel prices had much to do with the flat-lining of operational costs in the fleet industry, according to the report. Even though spending on diesel fuel is the single most expensive aspect of freight management, changes in consumption behaviors have made room for significant improvements.
Money saved from expansion in the natural gas industry
According to a recent report from The Wall Street Journal, the energy economy within the U.S. has changed rapidly in recent years. For example, domestic production of natural gas has skyrocketed as more companies tap into abundant energy reserves across the country. As a result, large fleet management companies are quickly making the transition from diesel to natural gas when fueling their trucks. The Journal said Proctor and Gamble, a multinational consumer goods corporation, has already converted 7 percent of its entire fleet with alternative fuel. FedEx said it will convert 30 percent of its vehicles to natural gas over the next decade as well.
Delivery routing software programs are a reliable option for freight organizations that want to limit their operational costs. Instead of manually mapping out on alternative delivery paths, managers can benefit from utilizing automated tools to ensure they are using as little fuel as possible per delivery.