All transportation executives are concerned about limiting expenses, especially those related to fuel, but not all are considering how the crisis in Syria could impact their bottom line. As the U.S. government weighs its options in regard to a military strike on the country, oil prices may rise, something that has significant repercussions for carriers across the country. This could make the use of logistics software that helps trim fuel spend even more critical.
How an international crisis could lead to higher costs for transportation companies
Conflicts in the Middle East have long been an issue for transportation companies. Because the U.S. imports a great deal of oil from other companies, any conflict can lead to a change in oil prices, which then can hurt a carrier's bottom line.
As evidence that the Syrian government launched a chemical attack on its own people grows, worldwide governments are considering what to do about the situation. While some favor acting to condemn these actions, others would prefer to hold off.
Many U.S. lawmakers have supported the idea of a military strike in Syria to show opposition to the use of these chemical weapons and demonstrate support for rebel groups attempting to overthrow the current government. While this may seem like a military concern, it could actually have consequences for American transportation executives looking to cut costs.
Many experts don't believe a military strike in Syria - a country that has relatively few oil resources - would have a direct impact on oil prices. An article in The Wall Street Journal points out historically, when political or military conflicts aren't directly related to oil resources, prices don't typically shoot up.
But it's the indirect consequences of action that may drive these expenses up. Some people fear that unrest could spill from Syria into neighboring, oil-rich countries, prompting prices to rise. Others think military strikes could hurt the still struggling global economy and put the recovery at risk, something that has the potential to impact carriers that have been impacted by the already slower-than-usual business conditions.
Working around the issue
While transportation companies cannot predict when - or if - the U.S. will strike Syria and how oil prices will change as a result of such action, they will find it beneficial to be prepared in the months ahead. By coaching drivers on how to strategically change their behavior and operate vehicles in a more efficient manner, they can limit the amount of fuel used on the road. Simple changes like requesting employees stop idling or slow down while on the highway are small modifications that can result in much better mileage, thus lessening the impact higher fuel costs could have on a company.
Technology can also help businesses stay on top of the situation and handle any jump in oil prices. By using routing software that determines the shortest roads for drivers to take, they can ensure their fuel use is as minimal as it can possibly be and cut these expenses whether oil prices rise or not.