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Fuel forces rethink on goods and services delivery

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Australian businesses are being forced to rethink their business models to counter the long term damage caused by rising fuel prices.

Transport technology company SmartTrans reports a dramatic rise in enquiries from companies engaged in delivery of security and cleaning services as well as from traditional goods delivery companies.

Launching a new industry White Paper titled “Working with the rising cost of fuel”, SmartTrans CEO Tim Herring said technology was now being seen as a “saviour” from the tyranny of fuel prices.

“We have seen a shift in thinking in recent months. Companies no longer want to be victims of variables such as the world oil market. They are beginning to recognise that intelligent transport systems can reduce costs and shore up profits,” Mr Herring said.

“Companies are not changing what they do, they are changing how they do it, by using mobile data, GPS, and other smart applications to improve overall operations.”

Mr Herring said clients were seeking to expand their use of intelligent transport solutions because the operational savings were clear cut and the return on investment was very attractive.

“The full impact of rising fuel prices has not been fully quantified by many companies. But we are seeing significant demand for information about how to deliver goods and services more efficiently and effectively. The cost of fuel is forcing Australian companies to make their fleet and service crews work smarter not harder – and technology is the key to this,” he said.

In the White Paper, author Stephen Walsh suggests a case where a company with a distribution fleet of 50 vehicles can reduce actual costs by more than 20% per year, equivalent to around $1 million per year cost savings for a fleet using medium sized trucks.

Mr Walsh who has a background in the transport, logistics, and accounting industries, notes that new sectors are turning to route optimisation and mobile data to better plan their activities and provide evidence of attendance or service. Companies are also using route optimisation to ensure drivers comply with OH&S regulations and obligations under Chain of Responsibility.

“The traditional resistance to capital expenditure on new technology in the transport or services delivery sector is no longer an issue. Companies are recognising that the latest systems have a clearly defined payback period with ongoing operational cost benefits. Alternatively an Application Service Provider (ASP) model involves monthly payments, which can be set against the ongoing cost savings.” Mr Walsh says.

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