Across the nation, we have been affected by inflation and rising fuel costs, but how has the increased cost of fuel impacted the logistics industry?
Increased Costs of Transport
“With diesel prices rising 76% in the last year, it is putting a strain on trucking companies, especially the small to medium-sized fleets and owner-operators. The rise in fuel prices coincides with a softening of the freight market, making it difficult for these carriers to keep the doors open as the fuel increase squeezes profits.” — Chris Olsen, Senior Vice President of North American Operations.
Transport companies are forced to increase prices to compensate for the rising fuel costs to fill this gap. This initial increase creates a ripple effect that flows through every supply chain step, from the shipper to the carrier and, ultimately, the consumer. This effect is expected; if it costs more for the carrier to transport the freight, shippers, receivers, and consumers will eventually have to pay for the increased costs.
What Can Truckload Do To Lower Costs
To combat these rising fuel costs, logistics companies have made operational changes. One of the most effective ways to reduce costs is to optimize transportation. Freight optimization helps utilize technology to find the best routes for your freight and a digital marketplace to match the best carrier for you, delivering a cost-effective solution aiding in minimizing deadhead miles. Another way to avoid unnecessary costs is to preplan loads and give plenty of lead time, which enables your 3PL to have enough time to find the best carrier.
Why Choose a 3PL During These Times
With inflation and fuel levels at historic highs, outsourcing to a 3PL becomes a viable resource. Outsourcing to the right 3PL provides a consultative approach to your company’s logistics needs, allowing you to focus solely on your business. It can be too overwhelming for companies to handle their freight in-house. Priority1 provides cutting-edge technology matched with a level of expertise so you can focus on your core business and allow us to manage your supply chain needs. Priority1 is here to help during these unprecedented times.