Transportation companies could soon be paying more for fuel in certain states, making cost-saving route optimization software even more essential for management teams. Several states have introduced legislation that could significantly raise the cost of fuel, making it important for companies that operate within those states or have drivers passing through those areas to realize the potential implications and how increased taxes will impact their operations.
Some states have already raised taxes
According to Fox News, Wyoming and California have already approved fuel tax hikes that could cost both individual and commercial drivers more at the pump. The 10 cent increase in Wyoming would bring the gas tax up to 24 cents, while California lawmakers recently agreed to raise fuel taxes by 3.5 cents. Both new tax rates take effect in July.
These taxes could help fleets and commercial truckers get around with greater ease, as they are supposed to go toward transportation projects. Fox News reported Wyoming's tax is anticipated to raise $70 million for such initiatives in 2014. However, while fleet drivers may find roads are smoother or easier to navigate, they will still be paying more at the pump for those benefits.
Other states introducing similar measures
California and Wyoming aren't the only areas where fuel tax increases are being considered by legislators. Multiple states have either introduced bills that would hike taxes or are said to be drawing up such proposals. Some Massachusetts politicians are considering raising the state's fuel tax, which has stood at 23.5 cents per gallon since 1991, according to The Boston Globe.
Maryland lawmakers voted to approve a bill that would raise the cost of fuel on February 22. According to The Washington Post, those filling up in the state can expect to pay an extra 13 to 20 cents per gallon by the middle of 2016, as the increases will be phased in slowly. The initial increase of about 4 cents will kick in starting in July, the same time such hikes will be seen in California and Wyoming.
Avoiding the sting of higher fuel costs and budget cuts
Long-haul fleets that travel across multiple states can see significant fuel spend reductions through the use of fuel purchase optimization software. This software takes fuel price and taxes into account with the truck's actual route and fuel tax reporting exposure to generate fuel purchase plans that produce the lowest total trip cost for fuel, after taxes.
For transportation companies with fleets that travel primarily within states that are raising gas taxes, reducing excess mileage in truck routing gains importance to offset the higher fuel prices.
Transportation managers that use vehicle routing software may find implementing this technology has multiple benefits as they attempt to trim expenses. Not only does routing software allow fleet managers to simplify the process of planning paths for their drivers, letting them spend more time on other aspects of the business, it also keeps their employees on the most direct route possible, avoiding excess mileage and fuel consumption. Cutting the amount of fuel a fleet uses can prove to be a major benefit to companies operating within states that are set to see a fuel tax increase in July.