According to CartonCloud, small and medium-sized logistics companies will need to impose levies to combat rising fuel prices, which it says are increasing costs and eating profits.
The SaaS logistics company says its recent Carton Cloud Logistics Index survey for Q1 2022 shows 19 per cent of logistics businesses see rising operating costs as the greatest issue they will face over the coming months.
It notes operators are concerned as to how they will adapt to changing market costs and what the flow-on impact to the wider supply chain might be.
“Fuel prices impact each level of the supply chain,” Vincent Fletcher, CartonCloud CEO says.
“In Australia, Canada and the United States, the main mode of transport for freight is by road – which makes our logistics industry extremely susceptible to fluctuating fuel prices,” he adds.
“For smaller businesses, the sudden rise can throw out their budgeted business costs for the quarter or year, disrupting business plans and making day-to-day finances impossible.
“Having fuel levies in place means logistics businesses can vary their rates in line with the changing price of fuel and continue to budget appropriately to their own costs of services – to keep their fleets running and continue to provide freight transport services.”
He adds that in most cases, the cost can either be absorbed or passed on as a surcharge.
“Features like fuel levy calculators and fuel levy rates provider operators with an essential level of flexibility in the face of market fluctuations, giving them the ability to manage the rise in costs and continue to deliver their services throughout the rise,” Vincent says.
CartonCloud notes transport companies are also using route optimisation and fleet management tools to benefit from their resources and reduce fuel use where possible.
It says route optimisation allows businesses and drivers to define their delivery route based on the fastest delivery times, the shortest distance, and on other variables.
“We’re seeing companies looking internally at their operations to see what they can do to reduce costs and boost efficiencies,” Vincent says.
“Route optimisation, fleet management and smart software applications can make a significant difference for small and medium enterprises,” he adds.
“Organising your fleet into geographic groups or transit lanes is a great start. That way you reduce the likelihood of any route crossover, or unnecessary extra travel for your fleet, saving on time and fuel usage.”
For more information on CartonCloud, click here.