These price increases drove up transportation costs to 1.84 percent of sales for wholesalers in 2007, up from 1.59 percent in 2004, the last time FMI gathered this information. Among self-distributing retailers, this figure increased to 2.06 percent, up from 1.66.
“Distributors can’t control the price of fuel, but they are conserving it in virtually every way imaginable. This begins with planning the most efficient routes, limiting trips and loading trucks as full as possible. On the road, drivers are limiting speeds and reducing idling time. On return trips, they are looking for opportunities for backhaul or contract freight. Nobody wants to haul air in rigs that burn more than $4 every six miles,” said Jeff Rumachik, FMI vice president of wholesaler and member services.
Fleets log a median of 6.5 million miles a year, according to the report. With diesel fuel prices doubling over the past four years, companies are seeking ways to take all unnecessary costs out of the transportation process.
These figures explain why the “cost of fuel” is cited among the top five issues by 99.1 percent of the transportation executives surveyed for this report. The other top issues mentioned were far behind: fleet costs (64.4 percent), on-time deliveries (50.6 percent), driver availability and retention (46.2 percent) and compliance with government regulations (37.2 percent).How Companies Are Improving Fuel EconomyMore than nine in 10 companies (91.7 percent) are conserving fuel using a wide variety of practices. As an added benefit, many of these measures help the environment, saving energy and reducing fuel emissions. For example, distributors:
Driver Shortage Has Eased Somewhat
The shortage of drivers, a major concern for many years, has eased somewhat: 38.5 percent of the companies surveyed are experiencing a shortage of qualified drivers. Of those companies, 91.4 percent consider the shortage “mild” or “moderate.” This concern could grow, however, since many drivers are nearing retirement.
Drivers are the largest group of transportation employees, comprising 80 percent of the workforce in the typical company. They have strong safe-driving records, leading to an extremely low accident rate for the industry. In fact, one reportable accident occurs every 1.8 million miles, according to the report.
Basic Transportation Benchmarks
The report features extensive benchmarking data to help self-distributing retailers and wholesalers compare their performance with industry averages as well as data points by region, facility size and company type. These include basic fleet activity levels in the average week:
Companies aim for a high rate of on-time deliveries. In fact, all fleets meet their goal on at least 85 percent of deliveries.
The ratios for various transportation costs include:
Methodology and Ordering Information
The data in this report are based on surveys from 129 fleets representing 38 different companies. To purchase a copy, contact the FMI Store at 202-220-0723 or visit www.fmi.org/store/. The cost is $95 for FMI Retailer/Wholesaler Members, $175 for FMI Associate Members and $250 for nonmembers.
Food Marketing Institute proudly advocates on behalf of the food retail industry. FMI’s U.S. members operate nearly 40,000 retail food stores and 25,000 pharmacies, representing a combined annual sales volume of almost $770 billion. Through programs in public affairs, food safety, research, education and industry relations, FMI offers resources and provides valuable benefits to more than 1,225 food retail and wholesale member companies in the United States and around the world. FMI membership covers the spectrum of diverse venues where food is sold, including single owner grocery stores, large multi-store supermarket chains and mixed retail stores. For more information, visit www.fmi.org and for information regarding the FMI foundation, visit www.fmifoundation.org.
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