August 25, 2008
Shippers Make Changes To Counter Higher Fuel Prices
Increasing fuel prices have inspired – perhaps compelled – many companies to restructure their operations in order to diminish erosion of their profit margins, according to eyefortransport’s “The Impact of High Fuel Prices on Logistics” Report 2008.
Over 800 shippers, 3PLs and carriers were asked their views on how high fuel prices are realigning their transportation and logistics strategies and networks and how are they tackling the challenges of higher fuel bills.
More than half of the respondents said that inventory costs are being pushed closer to the final destination. For years, logistics executives have focussed on minimizing inventory costs by moving goods through the supply chain as quickly as possible.
Now rising fuel costs are making some companies think about keeping more inventory on hand, but not all are ready to take that step. Over 40% said that larger loads are being shipped and buffer stocks increased. Load integration and multi-modality are key issues for that 40% of respondents.
Companies are using more fuel efficient modes such as rail and water which allows them to ship larger loads and reduce congestion. Short sea shipping and moving freight along coasts and inland waterways is proving to be a very strong alternative for the logistics industry.
More than one-third of the respondents said that companies have developed more flexible manufacturing strategies to help alleviate the impact of higher fuel costs.
Near shoring is helping logistics executives to reduce inventory, optimize inventory and avoid congestion. Companies are looking for the next low-cost countries which close in distance will allow them to boost their profits by avoiding the fuel price dilemma. Of course, the geographic, cultural, labour, economic and political variables have become key for making supply chains more flexible.
There is a difference of opinion on whether to centralize warehousing and distribution activities (27%) – which reduces capital costs, or to increase the number of regional facilities in order to reduce warehouse-to-market transportation costs.
A number of respondents said that they evaluate alternative transport options when lead-time is not an issue, i.e. road / rail / sea / multi-modal transportation instead of airfreight, while others have expanded their use of 3PLs / 4PLs, particularly those with shared-user facilities and vehicle fleets.
Other actions taken include route optimization and improved fleet utilisation; reduced delivery frequencies; continuous redesign of logistics / supply chain / distribution networks; reduction of production capacities; delaying of projects; and increased local sourcing.
Advertisers
Stay competitive through sustainability.
Find out how at the SAP Sustainability Resource Center. >>
Unclear about the EPA's new GHG Rule?
Learn how it could affect your business. >>
EPA mandatory emissions reporting starts Jan 1st
CSA Standards can help your organization get ready for compliance. Find out how. >>
Best Practices: Product Environmental Compliance
How to achieve compliance at a significantly lower cost. Download the full report. >>
Recent Daily News [ see all ]
- 11/20/2009
- 11/19/2009
- 11/18/2009
- Ontario May Follow California’s Lead on TV Energy Efficiency
- EPA Is One Step Closer to New Ship Emissions Standards
- European Paper Industry Cuts CO2 Emissions by 42% since 1990
- CDP Launches Water Disclosure Project
- Whirlpool Cuts Water Use by Nearly 22% from 2004 to 2008
- National Grid Again Rejects High Costs of Offshore Wind
- California City’s Green Building Ordinance Applies to Commercial Buildings
- Agilent To Save $3.5M Over 10 Years With Solar
- S. America Takes Most Urgent View of Copenhagen Talks
- Texas, China Wind Partners May Build U.S. Factory to Appease Critical Lawmaker
- Volvo, Mack Engines First to Meet 2010 EPA Emissions Standards
- Around the Web – Nike, Google, Nissan, Bush’s Green Library, WWF
- Fossil Fuel Emissions Rose 29% since 2000
- SEC Charges Four in ‘Green’ Investment Ponzi Scheme
- No Sunny Skies for Two Solar Projects in Texas, California
- Canada Delays GHG Emissions Regs, Russia Ups Emissions Cuts
- News Corp. Taps Hara for Energy Efficiency, Environmental Management
- Rising Sea Levels Would Hit U.S. East Coast Hardest
- Building an Energy-Efficient Data Center Using Virtualization Technology
- Trade Group on EPA Chemical Regs: ‘If Everything is a Priority, Then Nothing is a Priority’
- A/V Equipment Gets New Energy Star Requirements
- By Scaling Back Catalogs, JC Penney to Save 30% on Paper
- Around the Web – Starbucks, EcoFactor, UPS, Brownfields, Eco-Labels
- Subaru Touts Energy & Environmental Initiatives
- U.S., China Partner on Renewable Energy, Energy Efficiency
- Green Buildings Do Double Duty: Reduce Energy Use, Lower Financial Risk
- UK to Ease Rules for On-Site Renewable Energy Installations
- Intel Eyes Wind, Electric Cars
- Nike Tops Annual Climate Action Scores
- Iranian Tanker Firm to Cut Fuel Use 28%
- Corporate Jetsetters Can be Carbon Offsetters
- USPS Energy Use Down 9% From 2005 to 2008
- From Solar Applications to Christmas, LEDs Light the Night
- EPA May Regulate Sulfur Dioxide Emissions on Hourly Basis
- MITEI: Sustainable Energy & Terawatt-Scale Photovoltaics
- Around the Web – Health Care & Energy, Shell, NBC
Charts [ see all ]
Popular Topics
Energy Efficiency
Data Center
Emissions
Facilities
Electricity
Sustainability
Water
Supply Chain
Efficiency
Green Marketing
Strategy & Leadership
Research
Fleets & Transportation
Carbon Finance
Conventional Energy
Clean Energy
Waste & Recycling
Paper & Packaging
Policy & Law
Utilities
Construction
Comments and Discussions
Trade Association on Trade Group on EPA Chemical Regs: ‘If Everything is a Priority, Then Nothing is a Priority’
"Seriously… that..."
Gary Markowitz on Supermarkets Tackle Emissions Reductions, Fuel Efficiency
"Supermarkets waste over 10 percent of their energy through improper..."
peter in ireland on Ontario May Follow California’s Lead on TV Energy Efficiency
"Governor Schwarzenegger is shooting himself in the foot! 1...."
Environmental Leader on S. America Takes Most Urgent View of Copenhagen Talks
"The survey respondents (the PDF report mentions 4,000 respondents in 38..."
Jake on UPS Trying New Hydraulic Hybrid Trucks
"A point of clarification: the Reuters press release referenced herein reports that 20 UPS will purchase..."
Custom Organic Shirts on S. America Takes Most Urgent View of Copenhagen Talks
"90% of North Americans believe it is urgent to get a global climate..."
peter dublin on California City’s Green Building Ordinance Applies to Commercial Buildings
"Why energy efficiebnt regulation on buildings –..."




Join the Discussion