After performing one of the industry’s most comprehensive delivery and dispatch studies over several heating seasons, we believe the outcomes will change your entire perception of what it means to deliver optimally. Time and time again we hear fuel marketers talk about the expense of trucks and insurance coupled with the fact that it is very difficult to find qualified drivers. Our study analyzed fuel dealers and deliveries to see how we can solve those problems, drive down expenses – and increase profits.
We would like to share our study’s results and strategies with every fuel marketer that is interested in delivering their gallons with fewer trucks and drivers.
A new reality for fuel dealers
The world has changed during the last 6 months, and things will never be the same. We have very little understanding of what happened, and even less understanding of what lies ahead. If there has been any constant since March it has been “uncertainty”.
As the summer progresses, and with it the spate of partial, full, and reversed “re-openings”, it is abundantly clear that the ability to predict consumption for this coming winter will stress even the most experienced Dispatch Managers. While most companies operate with a fair amount of elbow room for delivery uncertainty, this coming winter might see delivery constraints of a new and unpredictable variety thanks to increases in those Working From Home (WFH) and distance learning.
Understanding your true expenses and delivery metrics are the starting point to lowering your costs to deliver fuel. Coupling that information with a solution that leverages YOUR data along with Machine-Learning algorithms can go a long way towards not only maintaining your profitability but growing it substantially.
Increasing profitability by lowering the cost per gallon delivered
Most of the operational expenses in your business relate directly to the delivery of fuel: trucks, insurance, gasoline/diesel, maintenance, drivers, dispatchers, etc. Some items, like delivery trucks, are expenses that exist regardless of how many days per year you use them. Those fixed costs are factored into your operations and are the reason you seem to “lose money” during the summer, while “making money during the winter”. Imagine finding a way to run your business with fewer delivery trucks – without increasing the risk of runouts!
You also have a good amount of variable expenses. Each time you dispatch a truck, you are paying for fuel, driver wages and wear and tear on the vehicle – all meant to generate profits for your company. Deliveries and dispatched trucks impact profits; so, imagine you did not need as many of either.
So, to increase your profitability by lowering the cost per gallon delivered, you should think about a comprehensive strategy including:
- Rightsized Deliveries – automating a process to schedule deliveries based upon the actual needs, not based upon a “one size fits all” for the tank size. Customers burn fuel at different rates (their K-factors) and the weather. If you could match individual demand against customer profiles – that already exists in your BOS – your efficiency would grow dramatically.
- Optimization of fleet and routing – by using a computerized algorithm in concert with your experienced dispatching team, you can focus on “slotting” your deliveries properly and spend far less. Although it might sound counter-intuitive, always making the biggest possible delivery is not always the least expensive way to run your business.
Imagine delivering all your gallons with far lower expenses and without increasing your risks. We can help you. Click here to learn more!