Feel like you’re drowning in higher fuel costs? You’re not alone — there are plenty of procurement pros floundering alongside you.

That’s the conclusion reached by an annual survey of warehouse and distribution center operations.

The No. 1 problem? The survey concluded that it was impossible to talk about anything in logistics without putting fuel costs front and center.

Despite lower costs, fuel prices have had a greater influence on procurement operations than any other single factor.

The biggest area of concern has been smaller and less-than-truckload (LTL) shipments. One out of three businesses have re-routed company trucks and consulted transportation management system (TMS) software in an effort to consolidate shipments and make sure routes are as short as possible.

The next most-utilized, fuel-saving strategy has been to work with larger customers to decrease the frequency of orders, while increasing the size of orders.

Adding to this problem: Lower customer demands have driven down inventory turns, which throws a monkey wrench into the machinery and drives up warehouse bills.

Last year, warehouses were averaging 9.8 turns per year. Now, that figure’s to 8.7 a year — an 11% plunge.

This has made life even more complicated for forecasters, who often work weeks if not months in advance.

What’s the best strategy for survival?

Good news: According to the 3rd Annual Warehouse/DC Operations survey, run by Logistics Managementmagazine, it’s maintaining status quo.

While a few supply chains are tweaking technology to save a step here and there, most are hunkering down and finding ways to improve efficiency with the tools and personnel already on hand.

That works two ways:

• First, you still call the shots and remain in charge of what’s going on with your supply chain operation, and
• Second, any improvements you make will go straight to strengthen the bottom line, since costs will be minimal.

In other words, this could be an opportunity to not only rise to the challenge, but to excel in the spotlight.

Tags: fuel, fuel cost, LTL, procurement, transportation management system