With the steady growth of fuel costs and a lack of labor and equipment in some parts of the country, load building optimization software benefits users more every week.
Diesel supply is low, and prices are high
Let’s look at the diesel supply. This weekend I saw diesel prices at gas stations at $5.29 while gas is $3.30 — that is a huge, maybe unprecedented, difference. Here is why — the U.S. diesel fuel supply is 25 days — the lowest level since 2008. Why?
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- Refiners have entered “maintenance season.”
- Imports are down
- Market “Backwardation” — diesel delivered now is at a premium price over future deliveries — so don’t build inventory because it will be cheaper to buy in the future.
We are in a cycle that encourages price spikes etc.
Look at the prices dynamics
To competitive edge through efficiency
Here are simple facts: transportation cost is up to 77% of all supply chain costs. Yet, the shipper may load almost 1,000 pounds or more onto trucks because many of them are underloaded. It happens for different reasons; the fear of over-weight fines, the lack of skills and knowledge, or the intentions to make the loading stable or protect the cargo from damages.
Imagine how the integration with load building may affect your ROI and performance if every truck goes fully loaded. Load building provides a competitive edge by decreasing every unit’s transportation costs.
One of our customers reported that the economy from using our load building optimization software, AutoO2, was $300,000 for one warehouse per month. Hence, their estimated economy for a year is $3,600,000, just from integrating their system with our load building AutoO2 without additional changes. But, of course, even more critical, the other benefit of using AutoO2 is decreasing the carbon footprint and land waste. Impressive benefits from integration load building software, isn’t it?