While propane marketers continue to navigate challenges such as an ongoing driver shortage and high steel prices, they now face yet another blow to the bottom line: diesel prices. The price of diesel reached its peak average in March at $5.25/gallon. This was up from $4.06/gal at the beginning of the month, $3.74/gal at the beginning of the year, and up even more from a pandemic low of $1.77 in April 2020.
According to the US Energy Information Administration, high fuel prices are attributed to increased levels of geopolitical risk combined with a drop in global oil refining capacity. In today’s uncertain climate, propane marketers must move forward strategically to confront the rising operational costs that directly impact their ability to efficiently deliver fuel.
Propane Marketers Both Large and Small Are Paying More to Fuel their Bobtails
Marketers of all sizes are feeling the effects of high diesel prices as they pay thousands to fill up their bobtails. One small shop in Kansas that operates out of their home with just two bobtails is striving to avoid unnecessary truck rolls and make optimal fills. They said, “If we’re not dropping as many gallons within our 50-mile radius, it’s really going to impact our bottom line.” On the other end of the spectrum, larger businesses are also looking to optimize delivery efficiency to save on costs. A Massachusetts-based marketer with over 10,000 customers said, “I hate to look at what my first quarter transportation expenses are going to be year over year, because the increase is going to be huge.”
With Diesel Costs so High, Can You Afford Not to be Efficient with Deliveries?
The average bobtail consumes 350,000 gallons per year (download our Delivery Cost Calculator to input your data). With the price of diesel rising from $3 per gallon last year to over $5 per gallon this year, fuel costs for that one truck would have increased by $700,000 YOY.
The only factor you have control over is the amount of fuel your bobtail consumes. One way to reduce this number is to increase your miles per gallon, but purchasing a more fuel-efficient bobtail probably isn’t a practical solution. The better way to improve your fuel efficiency is to reduce the miles needed to travel. What’s the easiest way to do this? Avoid unnecessary deliveries by using tank monitors.
Monitors Help You Make More Efficient Drops
With tank monitors, dispatchers and drivers have access to real-time tank level data so they can make deliveries only when customers truly need them. By waiting until tank capacity dips to 20%, you can be certain that expensive diesel fuel isn’t wasted when a truck is dispatched.
Tank Utility also equips your team with top-of-the-line forecasting data for monitored tanks. By keeping a close eye on estimated fill dates, drivers can stretch time between deliveries until there is enough collective tank capacity to justify running the route. In this diesel climate, using delivery trips more selectively cuts down on the number of trips to the pump.
The more it costs for each propane delivery, the more the efficiency of each load counts towards your bottom line. With a 40% increase in the price of diesel fuel since the beginning of the year, the average cost per delivery has jumped to new heights. Make sure you’re making the most profit from each fill by using tank monitors to deliver more per mile driven.