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How do you manage high fuel costs when you have small transportation batches?
We generally have small batches when shipping, and paired with high fuel costs it's just not efficient, but we just cant ship larger batches less often. How do you manage your shipping schedule with reducing costs?
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3 Answers
Enlist a specialist consultant (which is not me, btw). Check possibilities for mode shifts, e.g., any parcel potential. Are there pooling potentials? Can you find carrier9s) with unused capacity on city pair lanes, for lower costs? Can you apply temporary surcharges? Can you partner in a long term relationship that woun't gouge you based on managed lowere capacity?
Reality - fuel costs may vary, but won't go down over the long haul. Transient peaks can come without warning - or logical cause. There'll be lots of continuing conflict between shippers and carriers based on lose-lose price/cost pressures durint the worst of the downturn.
Please define the size of your shipping batches...and the frequencies
I agree with Art. The most cost effect way to identify and implement a new solution or process in many instances is to enlist a specialist. A specialist will have the skills and experience to identify the most appropriate method to address your concerns, and the best part is that the specialist (and their cost) will leave when the solution is completed!
Your solution will probably involve a combination of multiple carriers, revisions or completely revamping your process and revisions to your customer service offerings. I suggest that nothing should be off the table in this analysis because each of these steps can provide a valuable piece to the solution puzzle. You will probably find that regional carriers can deliver at a reduced rate in some areas but you must be careful of your contract volumes with your main carrier(s). You will probably find that some customers do not require short delivery time-frames and you can utilize slower (lower cost) methods. You may find that carriers are open to providing reduced rates if you will contract a regular shipment schedule to your high volume customers.
The key is to perform the analysis that involves your historical shipping metrics, your forecast shipping metrics and the experience of a specialist to help analyze and develop a solution.
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