Cutting back on miles
Deadhead, out-of-route miles and inefficient routes have a huge impact on fuel costs, and that’s why routing packages and tracking systems now are standard.
By Aaron Huff
Information technology combined with sound management processes help improve fuel economy and fuel purchases each day. Another important factor is minimizing the number of nonrevenue miles each day. Deadhead, out-of-route miles and inefficient routes have a significant impact on fuel costs, and that’s why routing packages and tracking systems have become standard industry tools.
The private 15-vehicle fleet of Huddle House – a restaurant chain in the Southeast – reduced its weekly mileage of 30,000 by about 5,000 miles. The fleet re-routed distribution to its stores after implementing a route optimization software system from Appian Logistics.
Ralph Brander, vice president of distribution for Huddle House, estimates the fleet is saving at least $2,100 a week based on reduced fuel costs of $0.42 cents per mile ($2.50 a gallon at 6 miles a gallon). And fuel was only part of the total cost savings brought by having more efficient routes.
“In addition to saving mileage, we were able to reduce our driver force by 33 percent and drop our equipment by 25 percent through better utilization,” Brander says.
But achieving the route savings calculated by the model required about three months because of the difficulty of getting drivers to change their schedules. “We are requiring drivers to handle more freight and make more stops,” Brander says. “We achieved the savings as quick as the organization could accept the change.”
Even without using sophisticated routing software, some carriers are discovering that drivers are able to route themselves more efficiently and decrease out-of-route miles just by knowing they are being monitored.
Drivers for auto parts distributor BAP of Arizona make “hot shot” deliveries to installers throughout the day. When a customer calls with an order, a driver is dispatched to deliver the part; he then turns around and returns to the store. Drivers make about 25 to 30 deliveries each day. The company averages about 11,000 deliveries and 100,000 miles a month, says Larry Del Rae, operations manager of BAP of Arizona.
The company recently implemented a Web-based tracking system from Xora called GPS TimeTrack that runs on GPS-enabled mobile phones. Management told the drivers that they were going to be observing their routing of deliveries, but not in a punitive or Big Brother sense, Del Rae says. Rather, management told drivers that better customer service and more efficient routing would mean more revenue that the company could pass on in raises.
“What we are trying to do is help and support their behavior to service the customer,” he says. “That’s what brings results.”
Since fuel costs change constantly, as do the company’s routes. BAP of Arizona did not have a good way to calculate fuel savings from using its Xora tool to monitor drivers, Del Rae says. The only way to measure fuel savings through increased route efficiency was with positive feedback from customers about improved delivery times.
Customers since have said that deliveries are arriving faster, leading Del Rae to conclude that drivers were being more efficient with deliveries. The company uses Xora to track drivers’ speed and uses data from fuel transactions to ensure that faster deliveries are not a result of drivers speeding and sacrificing fuel economy.
“We weren’t doing a Domino’s Pizza thing,” Del Rae says. “What we have been able to see is that the miles per gallon has not decreased. Drivers are being more efficient in how they are making deliveries.”
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