Distributors Cope With Rising Gas PricesBy Nick Matkovich
As gas prices continue to reach record highs, distributors have to cope with spending more money on transportation. Several have taken different avenues to keep their profit margins in check.
Some distributors have added a delivery fee and fuel surcharge onto all of their bills they send to customers to alleviate the charges they incur.
“I am not trying to recoup any money that would go to fixing the wear and tear on my trucks from making the deliveries,” said Honey Paine, owner of Clean Solutions, LLC, Louisville, Ky. “It is a way to get some of the money back that we spent on gas.”
The charges have been met with little uproar from most end users. They can empathize with distributors who are in a similar spot as them.
“I would say 75 percent of our customers expected a charge to be added because of the prices,” said Randy Lemasters, purchasing agent of Harter Supply, Elkhart, Ind. “The response has not been bad and most took it very well. They didn’t like the charge but it was expected.”
Other distributors have examined and re-worked the logistics side of their company. Long considered a cash-saving practice, the jump in gas prices has forced distributors to pay attention to their truck routes.
“We looked at logistics inside and outside the warehouse,” said Todd Douglas, vice president of Crawfordsville Paper Products Inc., Crawfordsville, Ind. “We consolidated our routes to prevent deadheading.”
For certain orders, distributors have turned to other companies to handle their shipping. Daniel Josephs, general manager of Spruce Industries, Garwood, N.J., has been using FedEx when he has a small order to send out.
The price of gas has forced distributors like Douglas to also change their purchasing methods.
“We’ve consolidated our purchases from suppliers and aggregated many of our orders to lower the surcharges,” Douglas said.
Distributors are looking everywhere for alternatives to saving money, willing to try most options.
“It’s a struggle,” said Josephs. “We are trying new ways to cut costs, but no one sees it coming to an end."
GREEN NEWS MAKERS
More Schools Seeking Green Certification
According to the United States Green Building Council (USGBC), schools are registering for the LEED certification program on average of one school per day.
With results of improved indoor air quality and higher levels of energy and water efficiency, schools have placed more of an emphasis on green practices including green cleaning.
“Parents, teachers and school board officials understand better than anyone the link between child health and learning,” said Michelle Moore, senior vice president of the USGBC.
GGEC Looks To Spur Green Initiatives
The Globally Green Energy Consortium (GGEC) recently launched Greening & Cleaning America. The goal of the program is to provide green and sustainability programs for school boards, colleges, healthcare facilities, community centers and assisted living facilities unable to fund projects due to limited resources and budget constraints.
EPA Reconfigures Green Procedures
The U.S. Environmental Protection Agency (EPA) recently announced it is adopting a new procedure that encourages office buildings to conform to green building practices. The agency hopes to reduce the environmental and health impacts of buildings and building-related products. The EPA hopes to adopt green building practices in existing commercial and public building, through existing programs like ENERGY STAR.
Cleaning Act Takes Effect In Illinois
After passing through the Senate and House, the Green Cleaning Schools Act became effective May 9 in the state of Illinois.
The act requires schools to purchase environmentally safe cleaning products for areas such as restrooms, carpets, general purpose areas, hard surfaces, glass, windows, mirrors and other products like hand cleaners and paper products. Illinois is the second state to initiate such an act. New York was the first.
New Book Releases Cover All Sides Of Jan/San Business
Jan/san distributors are not at a loss when it comes to summer reading options. Four new books highlight different aspects of the jan/san distribution business.
The Housekeeping Channel and the International Executive Housekeepers Association (IEHA) teamed up to publish “Infection Control For Dummies.” The book, authored by IEHA president J. Darrel Hicks, is designed as an authoritative, succinct guide to controlling and preventing infectious illness at home and at work.
“Profit Myths in Wholesale Distribution: The Truth About Sales, Margins, Inventory and Expenses,” written by Dr. Albert Bates of Profit Planning Group, questions the decision quality and consistency of distribution managers as they handle their daily business. The National Association of Wholesale-Distributors’ (NAW) Institute for Distribution Excellence released the distribution-based book.
“Understanding Jan-San Redistribution,” is a guide book for manufacturers, distributors and wholesalers in the sanitary supply industry looking to manage the costs associated with their supply chain. Written by Dave DeWalt of Franklin Consultants Inc., the publication examines the economics of wholesale redistribution for the manufacturer and distributor.
The fourth new book was compiled by Pembroke Consulting. “The 2008 Wholesale Distribution Economic Factbook,” is the third edition of the market data reference guide to the wholesale distribution industry. The publication offers data for sub-sectors of the business including revenue and employment growth trends, gross margins, wages and the number and size of the companies.
These releases along with other books and magazines based on distribution offer an array of topics for distributors to select many practices and ideas from.
MERGERS & ACQUISITIONS
Nilfisk-Advance, Malvern, Pa., announced plans to acquire Swedish distributor Aquatech. Terms of the deal were not disclosed.