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The Impact of High Fuel Costs on Shops

Autosphere » Mechanical » The Impact of High Fuel Costs on Shops
"As a company, we utilize a couple of different software options that help us manage our day-to-day deliveries" - Allan Wood. Photo ShutterStock

Autosphere (AS) asked Allan Wood, Ideal Supply and Douglas Squires, Colonial Auto Parts how higher fuel costs impacted their businesses.

AS: How are fuel costs impacting your business?

Allan: Rising fuel costs are affecting our business. More than ever we take many factors into consideration when it comes to pickups and deliveries.

Doug: Fuel costs have impacted profitability, but we haven’t changed how we operate in any meaningful way—we still need to provide the same level of service to our customers. Ultimately our industry is dependent on customer satisfaction. If customers don’t feel they are getting their orders quickly enough they’ll consider looking elsewhere for a company that will prioritize their orders.

AS: With the significant rise in fuel cost, how has it impacted your strategy in terms of parts deliveries?

Allan: As a company, we utilize a couple of different software options that help us manage our day-to-day deliveries.

Doug: Our delivery service remains unchanged—we provide our customers with prompt and efficient delivery. Our ASPs order values fluctuate from small to large value orders and it is the overall support received that needs to be the determinant, not each individual order. Our customers are loyal to us with their support, and we reciprocate that with our support in delivery.

AS: Have you made changes to your delivery schedules to absorb these increased costs?

Allan: We utilize On Demand software to optimize the delivery schedule of our fleet plus GeoTab for shotgun deliveries to our ASPs.

Doug: We have encouraged customers (particularly more rural/distant ones) to assess what they will be working on during the week at the start of the day/week and order everything they think they’ll need, and return things later if unused. This reduces possible wait time for ASPs thus improving their per job profitability and reducing our number of deliveries. We can pick up unused products on our next delivery so the impact on on-hand inventory is also minimized.

AS: What’s been the impact on delivery routes and planning those routes?

Allan: We find using software to assist with our deliveries we gain back time, and money and can better serve our customer base.

Doug: We do our best to make sure when deliveries are being done and if there are others in the area, complete them at the same time—ultimately customer satisfaction is the most important consideration.

AS: Have or are you considering purchasing/leasing new or different types of vehicles to help mitigate fuel cost increases—i.e. more hybrid or electric delivery vehicles?

Allan: We’ve purchased a small number of electric vehicles to help us better understand the technology, combat rising fuel costs and do our part environmentally. Many of our customers are completing/have already completed specialized EV training to meet the demand of the vehicles on the road today.

Doug: Electric vehicles are not really an option due to geographic distances and the number of deliveries made daily by each unit. Hybrid vehicles are more of a realistic option. We had bought test units some years ago but their reliability was less than ideal. The power grid is not ready for widespread adoption of electric vehicles and range anxiety remains a concern. There are also challenges in sourcing new vehicles due to the continued supply issues for new vehicles.

AS: Have you implemented any new or different policies regarding driver training/instruction/behaviour—to help reduce fuel and maintenance costs?

Doug: Driver training has always been a part of our operations. We require full circle inspections prior to vehicle use, require drivers to back into parking spaces, and vehicle idling and proper operation are monitored through the use of vehicle tracking units which notify on sudden braking/acceleration or excessive idling.

I’ll bet Allan and Doug have helped you in some areas.

 

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