Optimization engine works to competitive advantage for truckload carrier
Jim Fulcher, contributing editor -- Manufacturing Business Technology, 8/1/2004 6:00:00 AM
While a gallon of unleaded gasoline is going for more than $2 throughout much of the U.S, Allan Kitterman sees an opportunity for significant savings.
As director of purchasing and fuel at Indianapolis-based Celadon Trucking, Kitterman knows saving pennies adds up in the long haul. "If we can save a penny a gallon on diesel fuel, we can save $300,000 annually," he says.
Celadon—one of the top 10 truckload carriers in the U.S.—relies on a carrier management application from supply chain execution vendor Manhattan Associates. According to Russ McGregor, director of product management, Manhattan offers solutions that "enable companies to manage product from source to consumption."
For example, its Fuel & Route system—part of its carrier management application—receives diesel fuel price updates daily from the Oil Price Information Service. It then uses these prices to calculate the most cost-effective trucking routes, McGregor says, including optimal stopping points for fuel.
"Carriers are the optimization engine for competitive advantage," McGregor says. "The software makes calculations based on toll costs, fuel costs, and whether or not it's best to go out-of-route to find cheaper fuel, which gives users a better handle on their fuel costs."
That's been the case for Celadon, which runs more than 2,500 tractors and 7,100 trailers.
"It only takes two or three seconds for the software to calculate cost-justified routes that even take into account which truck stops are driver-friendly," Kitterman says. "The solution gives us tools to control costs quickly and efficiently. The more we control our costs, the more flexible we can be when negotiating contracts with customers."
