Getting a Handle on Specialized Transportation Costs
Q: Why is controlling fuel and permitting costs important for companies moving heavy equipment?
Lowry: Managing these increasing costs is a major task, but it's essential to gain greater efficiency and profitability. With state governments across the country facing significant declines in tax revenue, many are enforcing new weight restrictions and fuel tax requirements on the freight industry to help recoup lost revenue.
Transportation and fuel costs accounted for 62 percent of supply chain spending in 2010, according to the latest Council of Supply Chain Management Professionals study. With diesel costs hovering at an average of $3.90 this year, states are increasingly relying on higher fuel tax rates to supplement lost revenue.
Couple increased fuel prices with various state permitting costs and requirements, and it becomes clear that higher transportation costs will be a fact of life for several years to come.
Q: What steps can shippers take to control these costs?
Lowry: Fortunately, there are several solutions for managing rising fuel and permitting costs for greater supply chain efficiency. These include:
- Use an asset-based specialized carrier to get a better handle on fuel costs. Carriers who are willing to invest in diverse fleet equipment and technology solutions can offer a range of tools to reduce transportation costs. The tools include GPS-enabled trailers for tracking and tracing, fuel management dashboards, and other resources for complete transport optimization and visibility.
- Ensure your specialized carrier uses a continuous improvement process as part of the permitting procedure. State permitting costs and requirements are based on the individual needs of that government, which means processes and costs are constantly changing. Many companies can gain significant savings by choosing a specialized transport partner with an experienced permitting division, and measurable processes in place to ensure the correct equipment is used for multi-state moves.
- Look for a specialized transporter with an expansive network of locations and the ability to deliver additional value-add solutions. Transporters with a nationwide footprint of managed terminals can assist companies with shipment consolidation or regional just-in-time delivery, as well as yard management, warehousing, and other value-added solutions.