Rising fuel costs are "a grim reality" for manufacturers, and anybody else trying to transport products, says John Haber, EVP of transportation consulting services for spend-management consulting firm NPI. "One question is whether companies are doing all they can do to insulate their business and their customers. In most cases, they aren't."
Haber suggests that companies can minimize transportation cost increases by following these five best practices:
- Find out if you're paying a fair price for fuel.
- Consolidate shipments and switch modes.
- Re-evaluate service selection to determine the most cost-effective method to ship your products.
- Closely watch carrier capacity and be prepared to renegotiate carrier pricing when their shipping volumes decrease.
- Offset price increases outside of transportation, particularly in such areas as telecommunications, IT and energy.