Redefining Efficiency…

With over 30 years of industry experience, we’ve worked alongside hundreds of heating oil and propane dealers – from multi-state corporations to family-owned local businesses with fleets as small as four trucks. Despite their differences, these companies often share a common challenge: optimizing their delivery operations.

We have identified three key areas where improvements can (and should) be made:

1. Deliveries are smaller than the perceived “Optimal Delivery” size.
2. Overemphasis on tank size. Consumption patterns and other customer “traits” are not considered when planning deliveries.
3. Budgeting and planning misalignments: Planning is typically driven by weather and consumption forecasts rather than capacity and operational efficiency.

The Traditional Approach: Reactive Delivery Planning

In many cases, delivery schedules are based on a reactive approach. A tank reaches a certain level and a delivery is triggered. This might prevent runouts, but it’s not necessarily efficient.

For instance, imagine it’s the middle of January and several drivers call out due to illness. Which deliveries can be delayed without causing disruption? Typically, deliveries are prioritized based on reserve levels, but is this always the best approach?

A Modern Approach: Dynamic Reserves

We propose a redefined approach to delivery efficiency. Instead of simply focusing on delivering the largest possible loads, efficiency should be measured by the ability to avoid runouts while minimizing operational costs. By implementing a system of Dynamic Reserves, you can reduce the number of deliveries required and lower your overall expenses.

Each saved delivery directly impacts your delivery costs. However, there’s another crucial factor to consider—your fleet.

The Real Cost of Your Fleet

Your fleet costs account for nearly half of your total delivery expenses. This includes trucks, insurance, routine maintenance, and inspections. These are fixed costs – you’ll pay for the trucks whether they’re on the road in January or sitting idle in July.

If your business requires 30 trucks in January and just 3 in July, you still need to own 30 trucks year-round. Imagine the impact if you could reduce your fleet by just a few trucks, without risking runouts.

Flattening the Curve: Smarter Scheduling

To achieve this, we need to rethink delivery scheduling. Except for peak months, you likely have excess capacity in both trucks and drivers. The goal is to “flatten the curve” by strategically shifting some deliveries from high-demand periods to times when your fleet is underutilized.

While it’s impossible to delay a delivery past the point when a tank hits its reserve level, we can bring certain deliveries forward. Delivering earlier may result in smaller loads, which might seem less efficient by traditional standards. However, when done strategically, earlier deliveries can reduce the number of trucks on the road, freeing up capacity and allowing your business to operate with a smaller fleet.

The Math Behind Efficient Delivery Planning

Advances in technology make it possible to plan deliveries with precision. By analyzing your delivery schedule over a full year, you can identify opportunities to balance peak-demand deliveries with those that can be “slotted” earlier. This proactive approach ensures you’re not just planning for the next delivery, but the ones after that, optimizing your operations over the long term.

Is It Time to Reassess Your Delivery Strategy?

If your last investment was decades ago, it may be time to reevaluate. A modern, data-driven approach can help you lower your biggest operational expense: an oversized fleet. By embracing smarter planning techniques, you can reduce costs, improve efficiency, and better position your business for long-term success.