Advertisement

Blog

Infographic: The Real Cost of Trucking

Much of the electronics supply chain in North America depends on ground shipping of parcels.

There's the occasional complaint that FedEx and UPS exert too much pricing control on the supply chain, which puts cost pressures on small to midsized electronics firms. Shipping prices tend to get raised every year, and they're hard to pass through. (See The FedEx-UPS Duopoly.)

Those cost increases are usually tied to technology improvements. But what does the cost of trucking look like? (Check out the impact of coffee!) Take a look:

Related posts:

32 comments on “Infographic: The Real Cost of Trucking

  1. Daniel
    April 23, 2013

    Brain, there is no doubt that the shipping and other logistic costs are adding more overheads to the overall cost of the products. Moreover, most of the shipping companies are adding additional fuel surcharges as a variable cost based on the crude oil pricing.

  2. mfbertozzi
    April 23, 2013

    @Jacob: good point to discuss; the consequence of virtual market place due to Internet globalization is the possibily to purchase products everywhere, but really often costs due to transportation are not considered or planned in the budget; maybe it is the time to rethink in terms of geo-localized producers (if any…).

  3. Ariella
    April 24, 2013

    I love the fact that coffee gets included as one of the costs. So America's trucks really do run on Dunkin (or Starbucks) coffee.

  4. syedzunair
    April 24, 2013

    @Jacob: 

    The shipping is an integral part of cost that a company has to bear in order to transport its goods to the consumers. Naturally, it has to be transferred to the consumer. The dilemma is that with the oil pricing fluctuating the cost becomes instable & hence the product costing becomes instable. So, if a producer wants costs to be constant they will have a tough time battling with the variables. 

  5. syedzunair
    April 24, 2013

    Ariella: 

    I always thought it was exaggeration but now it really looks like coffee is one portion of the costs. 

  6. Ariella
    April 24, 2013

    @syedzunair you see, there really is some truth in advertising. 

  7. syedzunair
    April 25, 2013

    @Ariella: 

    Yes, there is some truth. Usually people are led into believing that all advertising is a gimmick. This proves otherwise. 

  8. Houngbo_Hospice
    April 25, 2013

    @syedzunair

    ” Usually people are led into believing that all advertising is a gimmick.”

    The goal of most advertising campaigns is to inform, remind and persuade people to buy a given product. Sometime the persuation part goes a little bit too far and it can lead to deceit and deception.

  9. Daniel
    April 25, 2013

    “the consequence of virtual market place due to Internet globalization is the possibily to purchase products everywhere, but really often costs due to transportation are not considered or planned in the budget; maybe it is the time to rethink in terms of geo-localized producers (if any…).”

    Mfbertozzi, virtual marketing can happen in terms of paper works and transactions. But finally they have to move the products from company to the customer side. I think the only solution is small warehouses at various places, so that they can do bulk shipping.

  10. Daniel
    April 25, 2013

    “The shipping is an integral part of cost that a company has to bear in order to transport its goods to the consumers. Naturally, it has to be transferred to the consumer.”

    Syedzunair, there is no doubt that the products has to be shipped to customer side based on demand. But the issue is with shipping charges and how this shipping charge can be minimized or controlled. Bulk shipping to nearby warehouse is one of the best method and from there shipping to customer place based on demand.

  11. syedzunair
    April 26, 2013

    Hospice_Houngbo:

    I agree with you. The fundamental of advertising is to inform the consumer to make knowledge based decisions. However, at times the advertisements go a bit too far & may lead to deception. 

  12. syedzunair
    April 26, 2013

    Jacob:

    I remember a strategy called 'Hub & Spoke' which a leading retailer used to have some control over their shipping costs. What the model says is to build warehouse in key locations called Hubs and then distribute the goods from these Hubs to smaller display centres, shops etc called Spokes. 

  13. mfbertozzi
    April 26, 2013

    @Jacob: it is a very pragmatic and realistic vision of the virtual market place; at the end, physical warehouses are needed and it is very interesting your suggestion about small w.h.es to arrange for supporting the market and reducing trucking costs.

  14. Mr. Roques
    April 27, 2013

    Amazing information! How many trucks are being evaluated for Alternative fuel systems? Seems they should be trying to make improvements there.

  15. syedzunair
    April 28, 2013

    Mr. Roques: 

    You mean running on something else other than gasoline? 

  16. Daniel
    April 29, 2013

    Syed, now a day’s most of the vendors are not undertaking any free shipping for small quantity orders. So now it becomes customers responsibility to collect it from the nearby warehouse.

  17. syedzunair
    May 6, 2013

    Jacob:

    I agree. It also makes sense not to bear the shipping charges for small quantities. 

  18. Clairvoyant
    May 6, 2013

    I really like infographics like this, which give a good sense as to the costs involved. Trucking is a huge business. Companies can grab a lot of business if they are to develop ways to lower the operating costs of trucking.

  19. Daniel
    May 7, 2013

    “It also makes sense not to bear the shipping charges for small quantities. “

    Syed, that's why they insists for collecting directly from warehouse or retailer shop.

  20. Daniel
    May 7, 2013

    ” Trucking is a huge business. Companies can grab a lot of business if they are to develop ways to lower the operating costs of trucking.”

    Clairvoyant, but how? That the question most of the companies facing now a days, especially when crude oil pricings are shooting up.

  21. Clairvoyant
    May 7, 2013

    There are many ways, Jacob. One more recent fuel efficiency improvement was the air dam addition to the bottom of trailers which you see a lot of now, at least in North America. Other items are more efficient air flow and engine designs, lighter weight materials, etc.

  22. syedzunair
    May 8, 2013

    Jacob: 

    Makes good sense and ends up in saving costs. 

  23. Daniel
    May 8, 2013

    “One more recent fuel efficiency improvement was the air dam addition to the bottom of trailers which you see a lot of now, at least in North America. Other items are more efficient air flow and engine designs, lighter weight materials, etc.”

    Clairvoyant, thanks for the clarification. I think these are the steps taken by automobile industries and not from the logistic/shipping companies. Apart from that, any other measures from shipping companies.

  24. Daniel
    May 8, 2013

    “Makes good sense and ends up in saving costs. “

    Syed, its true with shipping/logistic companies. But for customers, it may add more overheads and no price difference too.

  25. syedzunair
    May 9, 2013

    But if we look at the larger picture, Jacob it seems to help the bottomline. Although I agree that it is not the job of the shipping industry but still it helps in bringing the overall costs down. 

  26. Clairvoyant
    May 9, 2013

    Exactly, Syedzunair. A shipping company with lower costs on fuel may be able to get more business because they can ship items for cheaper.

  27. syedzunair
    May 11, 2013

    Exactly. Cost cutting has been the talk of the decade if you ask me. Today, cost savings measures are being considered more than ever before. So, if a company is able to bring down transportation costs they will end up getting more business. 

  28. Daniel
    May 14, 2013

    Syed, I agree with you, but customers are always looking for comfortablity in dealing and door step services. Moreover, companies/vendors are interested to make their customers more comfortable.

  29. syedzunair
    May 19, 2013

    Yes, you are absolutely correct. Customers want ease & reliability in delivering their products. I used to send documents with DHL only because I trusted their service and tracking. However, we had different local options that were much cheaper. But for me reliability always wins over a small increase in charges. 

  30. Daniel
    May 20, 2013

    “Customers want ease & reliability in delivering their products. I used to send documents with DHL only because I trusted their service and tracking. However, we had different local options that were much cheaper. But for me reliability always wins over a small increase in charges. “

    Syed, I am using DHL because they used to extend the credit and home pick up facility for me. For me it weights more than walking to the service provider and paying a ready cash.

  31. syedzunair
    May 26, 2013

    Jacob: 

    Sure. You can benefit on the convenience factor too. Walking up the courier with a large box can be troublesome so I guess its better to opt for the pick up facility. 

  32. Daniel
    May 27, 2013

    “Walking up the courier with a large box can be troublesome so I guess its better to opt for the pick up facility. “

    Syed, for that service I won't be able to pay anything extra too.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.