Blast Abrasives delivered costs are shooting up!
2018 is turning out to be an exceptional year – in terms of cost increases for Abrasives.
Not necessarily the cost of the Abrasive itself, but coupled with the Delivery cost, we are experiencing increases anywhere from 20% to 40% in landed cost compared to 2017.
Why the freight cost increase in 2018? According to a May 25th Washington Post article by Heather Long, some of the reasons are as follows:
- Critical shortage in available drivers – more the 50,000 drivers short in 2018.
- For Truck Drivers, the new FMCSA rule retains the current 11–hour daily driving limit, but reduces by 12 hours the average maximum number of hours a truck driver can work within a week, dropping it down to 70 hours of work in seven days from 82. So, fewer hours available to each driver means fewer miles driven per driver / per day.
- Driver salaries have increased by more than 15% in 2018 – expected to increase further due to supply & demand for drivers – perhaps another 15% or more.
- Greater economic activity means more freight demand than in the past.
- Higher diesel fuel costs.
In addition to the above factors, Abrasives are particularly vulnerable to freight cost increases. Why? Because the relative percentage of freight cost to the total delivered cost of Abrasive is quite high – for example, it is not unusual for the freight cost to be greater than the Abrasive cost for a given customer.
So, expect to pay more for Abrasives – and, expect delays in receiving orders. TCR Blast Abrasive orders for Full Truckloads have shown minimums of 20% increase in freight costs – and delays as long as 1 to 2 weeks.
Some suggestions for combating the increase in Abrasive Costs are:
- Order as early as possible – allow for 1 week or greater depending on order size and distance.
- Place orders from warehouses as close as possible to the place of business.
- Make sure orders placed are presently in stock at the warehouse.
- Consolidate orders – the lowest cost per lb delivered is Full Truckloads. Even for LTL service, order 2 pallets instead of 1 – order 4 instead of 2.
- Consider looking at various Abrasive alternatives that have the High-Performance properties with lower delivered costs.
Be creative when confronting the issue of increased Abrasive costs – modify the current purchasing norms to allow more time, increase the quantity of each purchase, and look for more local (closer) stocking sources.