Key Takeaways:
- The cost of fuel to ship products across the U.S. is rising. Shippers and manufacturers should consider alternative ways to reduce costs — such as reducing the weight of their semi-trucks.
- Weight reduction equals fuel savings, which is a no-brainer for supply chain optimization.
- While plastic pallets have a multitude of benefits over traditional wood pallets, a key takeaway is their lighter weight. It is beneficial because it cuts down on costs and creates a lower Total Cost of Business (TCOB) for shippers.
- Because cost reduction is repeatable with every pallet shipped, this will have a positive financial ripple effect over time. By maintaining a lower TCOB, companies can keep their prices competitive and better balance the rise of shipping costs.
You have undoubtedly noticed that the price of fuel for your shipping fleet is higher than normal. Recently, the cost to ship goods in the U.S. is much more expensive than it has been in previous years. The transportation industry has been dealing with a multitude of issues that are contributing to the rise in fuel cost; truck driver shortages, new electronic monitoring systems enforcing fewer miles per day for individual truckers, and lower rail freight capacity — to name but a few. All of this is leading to a sharp increase in the cost of shipping goods to manufacturing centers and retail stores.
It’s not just the shipping portion; every stage of a product’s journey in the supply chain is affected by these higher costs. Many companies have turned to raising the costs of their products to make up for these losses; however, they may, in turn, be driving customers to competitors. One effective way to keep Total Cost of Business manageable is to improve transportation efficiency. By making progress in this area, manufacturers can keep prices competitive and retain their customer base by balancing the rising shipping costs with savings found in other areas.
Key Strategies to Reduce Supply Chain Transportation Costs
- Monitoring Drivers: Operators can largely be responsible for excessive fuel waste. Freight drivers are often rushing and trying to get from point A to point B quickly. Driving at excessive speeds uses up more fuel. By setting speed limits, supply chain managers can improve the fuel-mileage for semi-trucks.
- Optimizing Routes: A great way to ensure fuel isn’t being wasted is to optimize a trucker’s route. With careful planning and calculation, managers can reduce the number of miles in the route, leading to lower overall fuel consumption.
- Reducing Weight: Carriers with lighter loads use less fuel. Less energy will be needed for truckers to reach and maintain highway speeds, cutting down on fuel consumption for every mile.
Of the solutions above, the first two are the most widely used. If you’re a supplier maintaining your own shipping fleet, chances are that you already use these methods to cut down on your fuel costs. However, reducing load weight is often overlooked.
Heavier products cause trucks to ‘weigh out,’ meaning the truck reaches its maximum weight capacity before fully utilizing its interior volume. While it is challenging to reduce weight when shipping by weight, cutting down on the weight of packaging and shipping assets allow more product to be shipped per run — making each run more fuel efficient. In cases where loads “cube out” — when the semi-truck is full by volume — reducing packaging weight lightens the entire load, resulting in net fuel savings for the carrier’s journey. Lighter shipping platforms enhance efficiency and fuel savings in both scenarios.
Improving the Average Fuel Mileage of Semi-Trucks with Lighter Weight Pallets
Approximately 90% of goods in the U.S. are transported using pallets — with wood pallets being the most common due to their low cost and widespread availability. However, wood pallets have several drawbacks. Safety and hygiene concerns, as well as their heavy and variable weight make wood pallets less than ideal for every shipment. Wood is hefty and inconsistent; a reusable wood block pallet typically starts at 70 pounds.
A wood pallet also can absorb moisture, potentially making it even heavier than its original weight (up to 80 pounds) and making it flow through automated equipment less easily. A 48-foot trailer can carry between 24 to 28 GMA-spec pallets, depending on how they’re arranged and assuming the trailer reaches its volume capacity rather than its weight limit. This means that for a single load of products, the combined pallet weight could range from 1,680 to 2,240 pounds — depending on how the pallets are loaded into the trailer and how much moisture they’ve retained.
It’s evident that transporting about 2,000 pounds of unsellable product is a poor investment. On top of that, companies have had to build in a margin to account for such a large variation in weight — since wood pallets are continually inconsistent. This makes the transportation process more costly and inefficient as a whole.
Manufacturers should consider making the switch to a pallet that weighs less. This allows companies to come closer to the weight limit and ship more product, reduce the amount of runs trucks must meet to transport product — allowing them to save on the cost of fuel. The obvious way to reduce shipping pallet weight is to opt for reusable, durable plastic pallets instead of traditional wood pallets.
Enterprises that make the switch find that they save thousands of pounds of weight by switching to plastic pallets, without reducing the amount of product per trailer. Semi-trucks will therefore show an increase in their average fuel mileage, which not only cuts shipping costs but also reduces greenhouse emissions.
Choosing reusable, plastic pallets instead of wood pallets is a simple way for companies to reduce shipping weight. Wood pallets are about 30 more pounds heavier than plastic pallets. When using plastic pallets in a 48-foot trailer, the total pallet weight per load ranges from 1,164 to 1,385 pounds. This translates to a reduction of 516 to 855 pounds per load — improving fuel mileage for the semi-trucks on each leg of their journey, saving companies on their Total Cost of Business, and allowing products to be priced more competitively. Ultimately, increasing average fuel mileage and cutting shipping costs are part of a recipe for success.
FAQ
Why is the cost of shipping goods in the U.S. currently higher than in previous years?
The cost of shipping goods has increased due to several factors, including truck driver shortages, new electronic monitoring systems limiting drivers’ daily miles, and reduced rail freight capacity. These challenges contribute to higher fuel prices and increased shipping costs, affecting every stage of the supply chain.
What are some strategies companies can use to reduce transportation costs despite rising fuel prices?
Companies can reduce transportation costs by monitoring drivers to prevent excessive fuel waste and optimizing routes to minimize mileage and reducing the weight of their shipments. While monitoring and route optimization are feasible options, reducing the weight of packaging and transportation assets is often overlooked and can lead to significant savings in fuel.
How do wood pallets contribute to inefficiencies in shipping, and what is the impact on overall costs?
Wood pallets are heavy and inconsistent in weight, sometimes absorbing moisture and becoming even heavier. This variability in weight can cause trucks to reach their weight capacity before fully utilizing their volume, leading to inefficiencies in shipping. Transporting these heavy, unsellable pallets adds unnecessary weight to shipments, increasing fuel consumption and overall transportation costs.
Why should companies consider switching to plastic pallets instead of using traditional wood pallets?
Switching to plastic pallets offers several advantages over traditional wood pallets. Plastic pallets are about 30 pounds lighter, reducing the total weight per load and improving fuel efficiency. By making this switch, companies can transport more products per shipment, reduce the number of trips needed, and ultimately save on fuel costs. This leads to an overall lower Total Cost of Business (TCOB) from which the organization continuously benefits over time.
The iGPS pallet pooling program provides a GMA spec plastic pallet that’s as lightweight as it is sturdy. Companies that switch to iGPS pallets can lower their overall Total Cost of Business. To learn more, give our team a call at 1-800-884-0225, email a specialist at switch@igps.net, or visit our contact page.
