Fluctuating Diesel Prices and the Effect on Trucking Companies Essay

Within the past years we are seeing a surge in diesel prices. When working in a capitalistic market such as truck driving, delivering goods is going to become even more stressful than ever. This is because we are showing a rise in prices that will add an additional 80,000 to 100,000 dollars to operate a heavy horsepower diesel truck. When trying to reach either a volume delivery goal or trying to reach a profit margin goal this rise will impact each of those. This will be based off a SWOT analysis plan and the plan will help the company reach a more firm outcome that can be based off a quality decision.

In a capitalistic market the transfer of goods and services in the most efficient and timely manor is always a key process to maintaining long-term relationships with customers. In such a competitive market you must know how to advance on opportunities and know when the risk outweighs potential reward. When trying to become a top dog in a capitalistic market you must deliver a service that can’t be matched and always gives quality service, even if its something basic as customer service, you must set yourself apart from other companies and enterprises. This is huge when your company messes up either a delivery or service to be accountable and know when to own up to your mistake and make it right with the customer to insure there is still a relationship after everything is said and done. Fluctuating Diesel Prices and the Effect on Trucking Companies Essay

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Humans need a market that delivers a service that pertains to their needs and wants. With surges in technology and how almost everyone over the age of 12 has the internet at their fingertips it makes ordering goods online just that much easier and a new type of market opens up. UPS deals with thousands and thousands of online delivery orders on a daily basis so making sure that every customers needs are met within the time schedule we told is a difficult task to complete with the accuracy that UPS continues to do each quarterly period. The market for delivery goods continues to grow with each passing day. This makes companies try and innovate and become a front runner in a marketplace that has so much to offer.

This new information that is rapidly changing with fuel prices gives your enterprise a tough decision. More and more companies are now switching to more fuel efficient, less horse-powered trucks that a more suited for day trips instead of having a sleeper cab. This is making a new impact on the market because more enterprises are switching how the run routes and delivery timings as well. With higher diesel prices the move to fuel efficient trucks makes sense in a way you cut down drive time, shorten delivery expectancy, and allow for more profit margins all around the board. When working with a company such as United Parcel Services which has great capital, a rise in diesel prices may be something that won’t affect their fuel spending as much as it would affect a smaller independently owned trucking company. This will rely on the amount of capital made versus what you are spending on operating costs as well as wages.

When dealing with a SWOT analysis model what it means is a study undertaken by an organization to identify its internal strengths and weaknesses, as well as its external opportunities and threats.This is the best way to analyze the problem we are facing here with rising fuel prices. For the company I work for being UPS I would look at our internal strengths as being our partnerships between many companies that ship products all over the united states as well as internationally. Another being our quality customer service and fast pace delivery time. Weaknesses internally would tend to be quality of equipment, operating cost for every semi-truck as well as package delivery cars too. When I think of external opportunities one would be the rise in lower horse-powered diesel trucks. These offer a way to save money and not use as much diesel fuel when driving routes across the United States. Then the threats we face are the rising cost on a barrel of fuel. These surging prices are not looking to slow down anytime soon and that causes a worry to a truck driving enterprise like UPS. This could have drastic affects that could cause the company to sell trucks and lower the number of trucks going on routes. Fluctuating Diesel Prices and the Effect on Trucking Companies Essay

When dealing with as much volume as UPS delivers each day to our customers, we use many gallons of fuel a week. These rising prices make it difficult for the company to reach financial goals that may have been set for either a quarterly goal or for the year. With the fluctuating prices we see a change in our financial, physical, and structural capital. This happens because operating prices will greatly be affected by these higher fuel prices. All of this makes choices for upper management hard and they must go into a process to make the best decision for the company.

In conclusion we find that the fluctuating gas prices hurt business with trucking enterprises and leaves many unanswered questions pertaining to the longevity of the companies. SWOT analysis shows that when you put this into perspective you make it easier to problem solve and figure out what the best outcome is for your enterprise. These prices if they continue to rise will make decisions for trucking enterprises harder to make and will leave not as much room for profit as seen in the last ten years of data.

References

Castagna, E. (2008). High fuel prices change the trucking landscape. Business Credit, 110(7), 34-35. Retrieved from http://ezproxy.bellevue.edu:80/login?url=http://search.proquest.com.ezproxy.bellevue.edu/docview/230135463?accountid=28125

Haynes. Dr., Essentials of Capitalism. Powerpoint Presentation.Retrieved from Week 5 assignments.Fluctuating Diesel Prices and the Effect on Trucking Companies Essay

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