Transport and logistics costs are rising due to the chaos in the fuel market

At the end of year 3 of the Covid-19 pandemic, fuel prices broke all records, leading to a enormous increase in transport and logistics costs for EU manufacturers. In just 12 months, the price of natural gas in Europe has jumped by nearly 300% (TTF Gas-510%, UK Gas-424%, Ethanol-117%), and in the US – by over 100%(Reuters & Trading Economics). In October, oil prices hit their highest level in seven years. The rise for 2021 is double compared to last year (NY Times). UK petrol price hits all-time high, reaching 143 pounds (The Guardian).  

The chaos in fuel market prices makes the prediction for transport and logistics costs of companies far from optimistic. The burden on manufacturers is enormous and is expected to increase in the next 2022. There was a huge jump in the price of sea transport in the last year. In general, this is the cheapest of all types of logistics transport, and such a jump in price is, to put it mildly, worrying. China is the main supplier of raw materials and goods to Europe and the United States. In the last 12 months, the cost of sea freight between China and Europe has jumped by nearly 600%. Against this background, the challenge faced by manufacturers and distributors of goods and products seems insurmountable…

How could manufacturers reduce their transport and logistics costs?

1. Optimization of the space for transportation and storage of goods and products.

It is a top priority for any manufacturer to deliver their product to the consumer as quickly as possible. The Covid-19 pandemic has greatly complicated this task. The borders of entire countries are closed indefinitely. Quarantine periods are introduced for those entering the respective country. There is a great shortage of truck drivers. The situation is extremely complicated. What did not seem like a big challenge two years ago is now a difficult goal to achieve. Namely: the delivery of goods and products to the customer for a specific period of time.

The fuel price crisis will not end soon. Manufacturing companies need to be extremely smart and rational in order to achieve their goals without overspending on the price of fuel. This applies to both logistics phases. Therefore, it is necessary to optimize the space required for transportation and storage. How can you achieve this?

  • Folding pallet boxes and containers

An elegant working solution is the use of foldable pallet boxes and containers. They will save you space and a lot of money in both logistics phases: transportation and warehousing. Folding pallet boxes are extremely effective in back transport (from the customer – back to the warehouse or base of the manufacturer/distributor).

According to the data, collapsible pallet containers save up to 85% space during back transportation. I.e. they take up many times less space than rigid containers in the vehicle. And instead of using an army of trucks, you could do it with a couple(or something). Which means a drastic reduction in fuel costs. 

In the warehouse, folding containers are also the better solution. When not in use, you can easily and quickly fold and store them(and even better if you use them in combination with folding racks). And they will take up far less space than rigid containers. And that means less storage space costs. Currently, warehouse space is selling at an unprecedented rate due to the growth of e-commerce. But this comes at a high cost. Due to the big jump in natural gas price, the maintenance of storage space is already very expensive.

The price of natural gas, especially in Western Europe, broke all records. Optimizing the available storage resource is an excellent solution to save money.

  • Optimize space with custom pallet boxes and containers

We often tell our customers that sometimes a little more expensive is actually cheaper. Especially when it comes to transporting and storing more specific loads. Goods and products of unusual size and weight, for example. Or loads that are particularly “capricious” during transportation (and storage) due to specific requirements related to the temperature or humidity. Then the best solution is called: custom packaging. Custom boxes/containers are a bit more expensive than standard ones, but they will save you a lot more money and will pay off later …

Custom packaging is the way to minimize transportation losses and optimize the space in the vehicle (truck or cargo/freight container). Depending on the specifics of the products and goods for which they will be used, these may be reinforced boxes, walk-in containers, cold chain boxes (for transporting vaccines, for example), boxes with or without windows, boxes with additional insulation , boxes with precise dimensions and sizes, etc.

When it comes to larger loads, it is very important the boxes/containers you are going to use for transportation not take up extra space in the truck or freight/cargo container. This will save you fuel and precious space during transportation (by land, air or sea). The same applies to the storage of such loads in the warehouse.

Ask about packaging boxes and containers that can better accommodate your goods. This will reduce the space they occupy in the vehicle and the warehouse. That’s why ordering containers of specific sizes can be the perfect move for your company. Optimizing load space and providing maximum protection for your products during transportation and storage saves costs and money (proven).

reusable packaging zamko

2. Use of reusable pallet boxes and containers

Returnable packaging or the use of reusable pallet boxes and containers is a topic we have often addressed in this blog. You don’t have to be a nuclear physicist or a math professor to understand logic. Using the same box repeatedly will save you money from buying many new, disposable ones. This saves costs for:

  • transportation of already used disposable pallet boxes to the places for their destruction or recycling;
  • transporting new disposable boxes / containers to your company’s warehouse or base;
  • losses during transportation (because reusable packaging boxes are much stronger and more durable than disposable ones).

3. Packaging pooling

Packaging pooling includes various services related to the continuous and optimized use of carriers (both custom and standard boxes and containers). The most important goal of pooling is to ensure the continuity of the movement of goods for which the respective carriers are provided. Optimal use of available resources and reduction of customer costs.

Zamko has warehouses and bases all over Europe and first-class transport. Proximity to the customer reduces transportation costs when delivering the carriers you need. The accumulated experience in providing packaging pooling services is a guarantee that we will offer you the best, environmentally friendly and cost-effective solution.