How Rising Fuel Prices Are Forcing Logistics Companies To Adjust B2B Deliveries

By Anar Mammadov, CEO — Senpex

There was a season when it appeared that businesses could stop worrying about fuel prices; then, the season passed. As recent headlines have reported, gas prices in the US are once again on the rise.

While rising gas prices impact virtually every segment of the business world, B2B logistics companies are affected more than most due to the delivery component of the services that they provide. As a result, many businesses in the logistics space now are looking for creative ways to adjust.

Here are some steps that companies are taking to ensure that deliveries can still be made effectively without the need for a dramatic increase in fees.

Optimizing route planning

Businesses aiming to decrease fuel expenses must start with optimizing route planning. Experts have projected that the average cost for a gallon of gas during 2023 will be higher than $3.50. At that cost, even minor increases in route efficiency can add up to significant savings for businesses.

Route optimization involves considering a number of factors before mapping out routes. These include the volume of deliveries, their content, scheduled delivery times, and the routes available to get goods to their ultimate destination. By taking these into account, B2B logistics companies have the potential to reduce the number of drivers needed, the number of miles covered, and the amount of time spent on the road.

Artificial intelligence (AI) holds great potential for B2B logistics companies looking to reduce fuel costs. In the area of route optimization, AI allows businesses to utilize algorithms for analyzing the data related to scheduled deliveries, delivery drivers, available routes, and customer requirements. The insights that AI-driven platforms can provide allow businesses to make considerable improvements in route efficiency.

AI can be used to contribute to route optimization by facilitating multi-stop deliveries. AI algorithms can analyze data on deliveries, including destinations, contents, and scheduled times to empower efficient grouping of deliveries. This type of optimization can be used for “one to many” delivery models — in which a single driver transports multiple deliveries from one warehouse location — and “many to one” delivery models, in which one driver picks up deliveries from multiple customers and delivers them to one destination.

Route monitoring systems can drive even greater optimization by updating drivers in real-time while they are en route. These updates can be prompted by new information received from customers, such as the times during which they will be available for deliveries, or changes to traffic conditions caused by weather, construction, or accidents. This dynamic rerouting can be just as important as prerouting when it comes to optimizing delivery efficiency.

Beyond reducing fuel prices, route optimization can also reduce the costs associated with staffing drivers. By optimizing routes, B2B logistics companies can reduce the stress and frustration experienced by their drivers. This can result in an increase in employee satisfaction that reduces turnover and the costs associated with it. Companies that can promise a better-than-average work experience also give themselves a competitive edge when it comes to recruiting and hiring top talent.

Automating delivery functions

In addition to reducing fuel needs through route optimization, businesses can also look to offset fuel costs by automating components of their logistics systems. This can allow businesses to reduce staff demands and the time needed to process deliveries. Automating processes can also reduce the potential for human effort, which can increase customer loyalty and drive greater profitability.

Higher levels of automation can be achieved by using APIs that allow delivery software to integrate with other business systems, such as those managing e-commerce sales or warehouse management. As systems are integrated, the amount of work needed to move orders along is reduced.

For example, when APIs are utilized, data from orders placed via e-commerce sites can be combined with other data provided by inventory systems and driver rosters to automatically map out optimal delivery routes. This type of automation significantly reduces the amount of work placed on dispatch teams or customer service teams.

The current outlook on fuel prices indicates that they have yet to peak. As a result, businesses should plan on at least a few more months of elevated prices.

However, even after prices start to decrease, most experts still expect that they will be higher than they have been for most of the last decade. Finding ways to increase efficiencies in delivery logistics will be important for those who want to avoid passing higher fuel costs on to their customers.

— Anar Mammadov is the CEO of Senpex, a logistics company that provides on-demand pickup and delivery services for businesses including retail stores, grocery stores, restaurants, health companies, e-commerce shops, and marketplaces. Senpex is the company that was chosen by Stanford Medicine to empower the delivery logistics for its CATCH study. Anar has been featured in Tech Times, highlighting the uses of the AI-driven, logistics software as well as in Market Watch, LA Weekly, and also Tech Bullion which features the efficiency of Senpex software as a last-mile logistics service.