In the freight industry, improving the transportation procurement process and optimizing the fleet are essential to success. This is especially true as fuel rates increase, and according to Food Logistics, fuel costs account for up to 2/3 of all fleet management costs. It all comes down to the proper use of technology to make the most of capacity, avoid unnecessary mileage and keep everything flowing. It’s in this way that enterprises are rethinking their supply chain strategies and focusing on the average freight cost per mile to attempt to keep freight spend in check. To help your company achieve these goals, it’s important to first understand the top challenges of fleet optimization, how higher average freight costs in terms of mileage increase risk to your business, and the benefits of meaningful optimization.
Top Challenges of Fleet Optimization
With freight costs rising in tandem with the effects of an extended peak, the need to optimize technology has become more critical than ever before. Looking at the different uses of technology, it’s to imagine a world free of inefficiencies. Unfortunately, that’s rarely the case. Consider these top challenges of fleet optimization present in today’s market:
Limited view of both headhaul and backhaul needs on a granular level.
Decreased lead times resulting from increased demands of e-commerce.
Limited driver pools that have the freedom of choosing which loads to accept.
Platform proliferation that’s made finding high-quality, top-paying loads more difficult and cumbersome as a whole.
Take a moment to look at that final challenge. More technology is supposed to help the supply chain and lead to meaningful reductions in the average freight cost per mile. Unfortunately, too many systems result in a headspin effect, making it difficult to see the best loads for all the boards and resources that may be available. That’s where having a centralized platform for finding loads that aggregate them across many resources is most valuable.
How Average Freight Cost Per Mile Can Increase Risks and Expenses for Fleet Managers and Drivers
The higher freight costs associated with managing logistics in today’s age are not expected to decline for some time. Peak season is upon the industry, and rates are subject to wild fluctuations in both demand and availability of drivers. Some markets have experienced massive strains on resources, but others might be able to stay afloat with minimal effort. It’s a very complex balance within the market, and when carriers or shippers overlook the all-in cost per mile, it’s easy to let freight spend grow out of control. However, the same resources that have given rise to these issues can also be a lifeline for improving efficiency and throughput without increasing all-in costs per mile.
For instance, integrated systems can aggregate capacity across multiple transportation management systems (TMS), sync market data, and help carriers identify where to target their fleets. Furthermore, such platforms lessen the physical workload of booking a shipment for carriers, and for shippers, it culminates in a single touchpoint for access to capacity that’s ripe for optimization. After all, things can and do change, and in the purview of global logistics, tracking the day-to-day needs and activities will go a long way toward reducing constraints and keeping rates competitive through completed moves in the most efficient means possible.
Benefits of Optimizing Your Fleet With the Latest Technology and Automations
Reducing the average freight cost per mile is crucial to improving a company’s bottom line and margin areas. When deciding whether to embrace the rise of digital freight matching and technology for freight cost per mile, remember these core benefits;
Reduced fuel consumption. To make this a reality for cost-per-mile, monitor the driver’s performance such as speed, long idle, and shifting habits. Identifying underperformance will allow excessive fuel burning to be avoided.
Fewer out-of-route miles driven. which can cause unnecessary fuel use, unnecessary wear and tear on the trucks, and diminish the driver’s productivity, eroding customer service.
Lower safety risks. Since fewer miles amount to more flexibility in the schedule, it will naturally benefit safety goals, and according to Truckinginfo, “safety-related infractions can be huge cost drivers, particularly with fines and penalties imposed by the DOT's Compliance, Safety, Accountability enforcement program.”
Reduced truck downtime by avoiding extra miles. Savings in miles driven also help to reduce the wear-and-tear on assets, and by monitoring fault codes, fleets dealing with reactive maintenance and costly breakdowns will decrease.
Savings to the end-user. Savings generated through lower average freight cost per mile will help lower overhead, resulting in resources to potentially benefit customers in the form of lower product price points.
Embrace Innovation and Supply Chain Technology Today to Address Per Mile Freight Costs and Expenses
Implementing digital freight tools and using the innovations in cloud-based capacity aggregation through a digital freight platform is the answer to the issue of unchecked freight spend and poor optimization. It’s time for your company to avoid the increase in average freight cost per mile and other tedious expenses by leveraging the right resources, like newtrul. Request a newtrul demo to see how technology can help optimize your fleet by finding better-quality, top-paying loads today.