Supply Chain Optimization

Trucking Costs – Villain Or Scapegoat?

Hormel joined other companies, like Kellogg, reporting that rising freight costs were part of the reason it cut its forecast.  Really?  If freight is such a high cost, surely they would say what they are doing to mitigate that cost.  So far this year, I have not seen any company announce steps it is taking to cut trucking costs.  How many transportation managers are stuck in the past negotiating contracts that aren’t really contracts rather than looking at technology like our Automatic Order Optimization AutoO2 that improves load efficiency…more product – fewer trucks?  You can see how it works  here 

 
Utah oil sands may be next to be exploited to meet the highest US demand for diesel and gasoline in the last decade (now up at a level of 4.2 million barrels per day). Petroteq claims to have a new, non-polluting method of separating oil from the sand.  Adding to the demand for diesel, new pollution restrictions are pushing big ships away from high-sulfur bunker fuel and into low-sulfur diesel.  Some ships are also being built to burn CNG – compressed natural gas – but availability, cost, and the fact that the tanks take up twice the space of liquid fuel means that it may be quite a while before there is widespread adoption.