As we detailed in our most recent blog, the United States is experiencing a record low of diesel supply. While the country is not in risk of running out of fuel or experiencing a national crisis, diesel is constrained. In order to combat this challenge, suppliers should implement a strategy to efficiently deliver fuel. Here, we are providing four tips to help suppliers combat the constraint on diesel.
1. Pre-Purchasing Loads
One of the most foolproof ways your company can get their supplies to vendors is by preplanning and pre-purchasing the loads. You will not have to search for product availability and can easily maximize efficiency. Not only that, but you can ensure your loads are only sourced where there is a physical supply. Pre-purchasing your loads and ensuring your supplier has numerous terminals available, will set your mind at ease, knowing that you have a plan in place.
2. Forecasting Inventories
Knowing when a load will fit into a tank and when the tank will run out of its current fuel is essential to accurately forecasting your inventory. A tank must be low enough to refill it without causing spills and delays. The size of your tank will help you determine when it will run dry. Making sure your estimation on when to refill tanks is accurate is crucial. It needs to be as close as possible, otherwise, you will be wasting precious resources. Be diligent to refill tanks as soon as it is ready to hold more. Additionally, knowing your drivers’ habits will help you plan when their tanks will be low. Schedule refuels when there is just enough space for a new load but before it runs completely dry.
3. Extend Supply Contracts
Oftentimes, when there is a fuel crisis or constraint, people want to hunt for the best deal. This forces you to gamble with the price of supplies. Playing the market can be tricky because you never know what will happen in the future. If you lock in crisis prices you may have to force those sky-high prices onto your customers after they have already begun to decrease. Instead, work to extend your current supply contracts to cover a larger percentage than what you would typically book. Do this for each marker you service, and it will set you up for success.
4. Plan Load Days in Advance
If at all possible, plan ahead! Scheduling loads 3-5 days in advance of the need will ensure your customers have their resources on time. Not only that, but it will provide your company with valuable insight into the supply needs of that region. Based on this information, you can accurately plan the future loads and ensure happy customers.
Strategy is Key
Overall, just because the country is experiencing a diesel constraint does not mean that it is time to panic. When suppliers plan strategically in these situations, you will have the essential resources to last until the next load. When insightful and strategic effort is put forth by suppliers, the worst effects will remain at bay.
Diversified is committed to helping during challenging times, such as a supply shortage. Please contact us if you have any needs that we can offer assistance.
