Why Lowered Fuel Costs Aren’t Cause for Celebration
Everyone rejoices when the cost of fuel drops. In the short-term, all businesses enjoy a reprieve in daily operating costs. This spring, fuel prices are roughly 5% lower than they were last year. Low fuel prices are encouraging new activity across the transportation industry. This surge in activity at a lower cost translates to a time when many in the trucking industry must re-evaluate competition and future sustainability. One notable advantage of lowered prices is that the wide gap in cost between railway shipping and trucking is narrowing, making the latter a competitive choice for many shippers. For companies looking to enter the industry or diversify what they offer, this is a great time to secure new clients. It also means that new and existing companies should evaluate their existing client base and maintain a high level of competitive intelligence research. Understanding the competition during a high activity time can help companies position themselves for success in the marketplace. Companies need to prepare for the future with the understanding that fuel prices are constantly in flux. The low prices will rise at some point, and every company needs to ensure they are prepared to handle the differences in overall costs. For example, when costs are low, the overall fee trucking companies charge to gather revenue decreases. Those companies looking to maintain a more significant margin of revenue will need to constantly look at the numbers to ensure they plan and account for any potential losses. With the change and increase in trucking freight industry demand, now is a great time for companies to look into improving their logistics programs. Remaining viable in the industry will require attention to detail, which helps ensure costs/savings are balanced optimally. Logistics software helps companies, whether small or large, keep track of the current industry environment, manage new drivers, and prepare for changing industry conditions. Comprehensive solutions help companies with everything from budgeting and invoicing to regulatory compliance and driver management. Companies that choose to leverage technology solutions will find their ability to remain competitive improves over time regardless of the market and fluctuations in price at the pump. Ultimately, decreased fuel costs are a double-edged sword in the trucking industry. While many companies, including Marten Transport, are enjoying some of the highest profits they have ever seen, decreased fuel prices and improvements to efficiency means companies that enjoy the easygoing nature of the market will find their strategy difficult to maintain over the long-term. Sitting by idly or failing to plan for market fluctuations can be devastating. In the short-term, companies have every right to celebrate lowered cost; however, the celebration should also come with some serious insight into the industry changes taking place and how that can change business models now and into the future. By remaining aware of meaningful changes and adapting accordingly, every trucking business can enjoy the lowered operating costs today. Check out the GTG Technology Group website for more information about using logistics software to improve your company’s short- and long-term outlook.