Companies all throughout the world, particularly retailers, wholesalers, transporters, and logistics service providers, are experiencing the effects of increased fuel prices. Diesel prices increased by 65% in the US, 58% in Canada, 28% in Germany, and 36% in the UK in May 2022 compared to the same month last year.

Few businesses have made major attempts to solve the issue, despite the difficulties that increasing fuel costs provide for these industries. Fuel prices typically fluctuate, but the current situation is unlikely to change anytime soon.

Fortunately, there are methods to lessen the worst consequences of the financial load, and the steps businesses take today to lessen the impact of gasoline costs may even pay them later when prices start to decline.

Although the demand is a significant element in driving oil prices, it is by no means the sole one. Oil prices are determined by the whole market, not always by a particular nation. The location of the oil’s extraction and refinement as well as the fact that numerous grades need particular processing are additional factors.

The invasion of Ukraine by Russia and the ensuing government sanctions have irreparably damaged the world’s supply lines. Even in the event of an end to hostilities, sanctions are not likely to be lifted very soon. Thus, the price of oil will keep rising, as will the price of fuel.

The entire organization, not just the transportation division, must be involved in the solution to the problem of excessive fuel prices. Here are 11 steps you may do to lessen the effects of rising fuel prices.

• Implement a surcharge for incremental fuel costs.

Often companies will have fuel surcharges already built into customer contracts. Don’t be afraid to use them. Apply surcharges to new purchases or renegotiate existing agreements. Customers may push back, but even a percentage of what was originally requested can make a big difference.

• Implement dynamic service pricing.

Customers who don’t want to pay more may be willing to accept slower delivery estimates if it keeps their costs low. If they’re given a range of delivery pricing at the point of purchase, they can determine whether they want to choose premium delivery times or slower, lower-cost options. For those who want to pay less, choose slower transportation modes and longer delivery lead times. Delay shipments to consolidate multiple orders from the same customer or from several customers in the same region. Change TMS or route planning system optimization parameters to prioritize slower modes and shorter distances. This approach will make the delivery operation more productive, driving down fuel costs and driver hours.

• Focus on driver performance.

Drivers can use more fuel when idling or driving too fast. To reduce the fuel each trip takes, encourage drivers to reduce their speed, keep idling to a minimum and stay on well-paved roads when possible.

• Optimize vehicle performance.

Conduct regular vehicle inspections to ensure that engines are tuned and tires are at the proper pressure to lower fuel consumption. Telematics solutions can also monitor the health of the vehicle as well as driving behavior. They can help fleet operations catch declining vehicle performance early and facilitate driver coaching to help drivers reduce their fuel consumption.

• Challenge carrier fuel surcharges.

Ensure that increases in carrier fuel charges are a direct result of their own increased fuel costs. Ask them to share the details behind the proposed increases so you can confirm the additional fees are necessary.

• Collaborate with your carriers and customers.

Increased fuel costs present an excellent opportunity to collaborate with other members of the supply chain. Together, you can identify practices, policies, and operational conditions that decrease your collective fuel consumption. Ask for input from both your carriers and customers about how your business can reduce fuel consumption and lessen the burden of the increased costs.

• Optimize your network.

Over time, logistics networks can become suboptimal. This can happen when customers come and go, buying patterns change and new products join the market. Network optimization can take those changes and rebalance the logistics network to reduce fuel consumption. Focus on service policies, operational strategies, and other “soft” considerations as opposed to bricks-and-mortar to deliver results more quickly—then go back and look at “hard” stuff for greater benefits.

• Rebid carrier contracts with a focus on fuel cost reduction.

In your existing contracts, you may not have given as much consideration to fuel costs, because they were written when prices were much lower. Now, with costs rising, those contracts can significantly penalize the organization. Softness in various modes of transportation and geographies presents an opportunity to rebid contracts.

• Update route planning solutions.

Far too many companies still don’t use optimization technologies that could yield significant savings. Compare the capabilities of your legacy solution with its more modern counterpart. Not only are older systems less capable, but they’re also harder to use and often require manual workarounds that are less effective at reducing fuel costs.

• Promote delivery density with customer steering.

Poor delivery planning can make a fleet less fuel efficient. Provide customers with delivery appointment options that increase delivery density. This can reduce the distance traveled per stop and lower fuel costs.

• Prioritize eco-friendly deliveries.

More customers want delivery options that cause minimal harm to the environment. Eco-friendly deliveries reduce carbon footprints and result in lower fuel consumption. Customers are happy, the environment benefits and the seller saves on fuel.

Rising fuel prices can be a heavy burden for businesses trying to keep up with a volatile supply chain. But with these resources, firms may take advantage of the current scenario to their advantage and position themselves for long-term success.