Rising tide of gasoline prices impact delivery practices

HOUSTON--Rising gasoline prices are taking a toll on the industry, extracting a double whammy on collision parts replacement.

First, distributors are reporting that their year to date volume of business is slightly off, most likely as a result of motorists making less trips to conserve gas, and money.

But then there is the additional cost of the operation of the delivery vehicles, a realm of reality which strikes at the heart of most distribution operations.

To gauge the impact on distributors, and to find out what some were doing to counteract this profit nibbling scenario, the Body Language contacted three different distributors--one on the east coast, the other in the mid-south and a third in California.

Here is what they report.
From the east coast: “We have budgeted more money into maintenance on our fleet. Instead of replacing trucks with new ones at a certain time, we basically are skipping a replacement cycle.

“With our current fleet, we still maintain the normal checks on tire air pressure, air filters and other mechanical parts which, if not checked, could lead to reduced operating efficiency.

“We also moved our fleet credit card account to a company that offers a higher rebate on the monthly purchases. Plus, we added locking gas caps to every vehicle in the fleet. 

“Everyday 30 minutes prior to our UPS pick-up, we review the driver routes. If we have a small package that can be shipped instead of adding a large detour to a route driver, we ship the part UPS after notifying the customer,” he added.

At the Texas distributor’s location, they report seeing a more than 60 percent increase in the cost the of gas during the past year alone.

“It seems like everyday, it is costing us more to keep our fleet of  trucks on the road.  To cut the use of gas for deliveries out of our way, we have opted to UPS our smaller parts such as lights, radiators and condensers whenever it is beneficial to pay the UPS charges vs. the cost of gas and man hours to make a delivery 20 to 30 miles out of our way.

“At this point, we have not elected to charge our customers a surcharge to offset the price of gas, however, with the price of gas continually on the rise, this may become necessary to continue to provide our customers with the service they have come to expect.

“In regard to your request, naturally, I’m sure everyone is doing something similar, but we are just trying to be more conservative overall. 

  From California comes the following report:
“In our area, regular fuel is $4.70 per gallon, which we hear is the highest in the nation. We have cut service to some of our outlying areas from daily deliveries to 2 and 3 days a week. 

“In the more remote areas, it is in many cases cheaper to utilize a courier service than to send one of our own vehicles. In some cases we ship UPS on smaller items when the customer can wait an extra day. 

“We also try not to make special trips to pick up return parts. On C.O.D. accounts, we always make sure not to attempt delivery during the lunch hour to avoid a potential re-delivery when no one is there to issue a check.
“More than anything else, I pray that fuel prices will come back to something more reasonable, but I’m beginning to think that won’t be the case. 

“Having said that, we are going to have to take more drastic measures in the near future if they don’t, as it is not only impacting operating costs, but also reducing accident frequency to the point that many repairers are facing extinction. 
“Like all other businesses in our area, our volume has been significantly impacted as a result, too,” he added.
Aside from what these three distributors are doing, there may be others out there who are handling the fuel crisis differently.  Some report that where they once allowed their drivers to take the trucks home at night, this practice has been greatly curtailed.

Others are evaluating their insurance coverage to determine if they cannot affect savings by accepting higher deductibles. 

One distributor reports placing a governor on the truck engines so as to help stop speeding by the drivers.  He counsels, however, that his tack might be different if his drivers were using more interstate highways.  They do not.
Another is experimenting with engine additives to determine if the claims of better mileage are legitimate.  He reports that at this particular time, he does not have the statistics which can prove that case.

And another distributor, in the deep south, reports that he has started to go back to church to pray more often.  Asked if he thinks this will help in reducing gasoline prices, he says half jokingly, “It can’t hurt.”

So from the practical to the spiritual, ABPA distributor companies are looking at their fleet gas gauges and trying to determine what is the best action to take.  

All agree, it is a whole new reality out there when it comes to delivering parts on a per gallon basis.