Companies that supply bulk or cylinder propane gas must balance the pressure to reduce costs with accurate and efficient service delivery to ensure residential and commercial customers always have an available gas supply. Making the distribution challenge more complex are additional factors—bulk delivery schedules are usually dynamic, while cylinder deliveries usually follow a fixed schedule.
The inability to accurately forecast customer inventory is a significant factor in increasing the cost of delivery. Distributors attempt to address this uncertainty by making more frequent deliveries to ensure customers are never without gas. However, this approach results in increased transportation and labor costs—the two greatest cost drivers for a distributor. In the present economic environment, propane distributors have to look for alternative methods to serve their customers and make money.
Let’s take a look at some of the key additional logistics challenges that the propane industry faces and how logistics technology can help.
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