Save gas by slowing down that Mack, Mac!

With the exorbitant price of gasoline, I make a conscious effort to reduce my speed on the freeway. I also watch the number of trips I make to town each week. I set a maximum speed limit for myself of approximately sixty miles per hour and I continue to arrive on time. Which brings me to this week’s topic. Why are delivery trucks passing me like I am standing still? What is their company’s policy regarding driving speeds and behavior? I am willing to bet the majority of companies do not have a policy in place addressing driving practices.

With gas prices skyrocketing, we have seen the ripple effect of higher transportation costs transfer to food, clothing, utilities and all other necessities. Increased fuel costs are routinely passed on to the consumer. So where do we start saving the cost of transportation? Right in our own driveway, whether we are a business or an individual.

Here is an opportunity for a business to institute a policy that can directly affect its profits. With the cost of fuel up over 200% in one year, business owners must become more acutely aware of their transportation costs. In years passed, whenever fuel prices crept up, there was a tendency to adjust prices more slowly. In some cases, businesses could absorb the additional cost due to its minimal impact on profits. However, that is no longer possible.

Like fireworks on the Fourth of July, transportation costs have skyrocketed and exploded on the bottom line for many businesses. It is time to address this expense in an aggressive manner and immediately. The major cost for most businesses is usually employee-related expenses. These are also the first costs to be trimmed when things get tough. It is time to make transportation costs one of the top priorities in managing your variable expenses.

Virtually all companies utilize vehicles in their business, either directly or indirectly. These expenses have an impact on our dependency for large amounts of fuel daily. We need to begin analyzing how our net profits are being affected by our fuel consumption. An owner or manager should immediately analyze the manner in which vehicles are being utilized, formulate a plan to curtail usage, write a policy (with consequences for violators), implement the policy and begin to realize transportation cost saving. In addition, all employees must be made aware — in writing — of the new policy, and its disciplinary consequences for violators. This should be accomplished expeditiously.

As one possible option, I suggest the use of an electronic reporting system that shows miles driven and peak speeds (with duration) that is downloaded weekly to assist in managing a company’s transportation costs. I realize this is not practical for all businesses, but it should be considered by the majority of companies.

I weighed the trade-offs, pros and cons, and their effects on the bottom line prior to proposing this change in business tactics. In this case, the pros far outweighed the cons for slowing down, making fewer trips, and pooling resources. It is a no-brainer to know that if you reduce fuel costs, then your profits will increase. Sure, you can defer price increases to your customers for the short term. However, there are additional benefits such as saving our environment, preserving our national fuel reserves and instilling customer loyalty.

So slow down that Mack, Mac!