GROWMARK FS Logistics Morgan Firestine Pennsylvania State - - PowerPoint PPT Presentation

GROWMARK FS Logistics

Morgan Firestine Pennsylvania State University Agronomy Intern

Project Overview

• Determine the cost

per mile for four trucks

• Determine monthly

and annual truck cost per mile

• Make observations

and recommend solutions

Why Project was completed

• Does it pay to deliver all products or should some

merchandise be transported by common carriers?

• What is the cost per mile FS should be charging

for deliveries?

• When should FS let common carrier’s transport

deliveries?

Leesport’s Logistics System

Logistics Analysis from July 2006- June 2007 Leesport currently delivers:

• Chemicals on a bi-weekly basis
• Five New Jersey locations
• Four Eastern Pennsylvania locations
• Assists York and Emmaus in deliveries of

seed to other GROWMARK locations.

Logistics System

Leesport currently :

• Backhauls bagged fertilizer from East

Liverpool to other GROWMARK locations

• Delivers liquid fertilizer from

Bordentown, Philadelphia, Baltimore, and Seaford to other locations and customers

Trucks Analyzed

• 12365
• 14167
• 13340
• 16009

Truck 12365

1994 Peterbuilt Truck Tractor

Truck 14167

1998 Freightliner Truck Tractor

Truck 13340

1996 Freightliner Truck Tractor

Truck 16009

2006 Freightliner Truck Tractor

• Depreciation
• Tonnage Tax
• Repairs and

Maintenance

• Truck Tolls
• Fines and Taxes
• Insurance
• Fuel
• Driver Costs

Expenses

Depreciation

12365 1994 Peterbuilt 614.04 14167 1998 Freightliner 350.83 13340 1996 Freightliner 3500.04 16009 2006 Freightliner Columbia 120 17587.29 Trailer 1963 Fruehauf Tank Trailer 294.74 Trailer 1975 Heil Tank Trailer 138.17 Trailer 1996 Fruehauf Van Trailer 890.36 Total Depreciation 23,829.86

Total Miles- Miles per Gallon

Cost per day $186.15 $651.54 Driver Cost for year $33,321.54

Total Truck Miles and Fuel for 4 Trucks Truck Number Fuel in gallons Miles Miles/Gallon 12365 3300.80 22789 6.904 14167 8793.00 44847 5.100 13340 5449.50 31223 5.730 16009 7973.50 48023 6.023 Total 25,516.80 146,882 5.756

Fuel Expense

Total Annual Billed Miles 97,157 Average Monthly Fuel Cost $16,242.17 Total Annual Fuel Cost $178,663.92 Average Fuel Price/Gal $2.83

Driver Costs

Annual Labor:

40,000/working days(262)= cost/day*days of driving= driver cost 3.5 Drivers

Driver Salary Approximately $40,000 Benefits 21% of Salary $8400 Cost Per Day (40,000+8400)/262 $186.15 Driver Cost/Year 186.15* Total Days(179) $33,321.54

Monthly Expenses- November

Depreciation Tonnage Tax Over the Road Truck Repair Tractor Trailers R & M Truck Tolls Fines and Penalties Motor fuel, Excise Tax Vehicle License & Permit Auto & Truck Insurance Casualty Insurance Fuel Labor including benefits

Total Expenses for month

$3,007.75 $0 $59.77 $0 $0 $0 $1.33 $20.00 $986.90 $648.83 $723.51 $2,047.69

$6,399.85

Monthly Expenses- May

Depreciation Tonnage Tax Over the Road Truck Repair Tractor Trailers R & M Truck Tolls Fines and Penalties Motor fuel, Excise Tax Vehicle License & Permit Auto & Truck Insurance Casualty Insurance Fuel Labor including benefits

Total Expenses for month

$3,007.75 $0 $0 $0 $0 $0 $0 $2,070.38 $968.90 $648.83 $77,437.64 $4,467.69

$87,517.32

Expenses for the Year

Depreciation Tonnage Tax Over the Road Truck Repair Tractor Trailers R & M Truck Tolls Fines and Penalties Motor fuel, Excise Tax Vehicle License & Permit Auto & Truck Insurance Casualty Insurance Fuel Labor including benefits

Total Expenses

2,233.85 $304,485.01

$36,529.60 $1,107 $2,102.75 $30,314 $4,357.34 $560.75 $178.58 $14,647.77 $10,983.60 $7,506.71 $178,663.92 $36,858.46

$325,428.21

Cost Per Mile - Billed Miles

Total Billed Miles Truck Number July August Sept. October Nov. Dec. Jan. Feb. March April May June Total Miles 12365 140 279 309 1,115 771 2,365 3,863 1,719 1,000 11,561 14167 319 861.9 1,199 1,416 1,144 2,827 620 2,505 5,207 6,190 6,609 3,393 32,291 13340 630 1,051 1,349 1,616 1,208 694 2,727 2,407 3,552 2,234 17,468 16009 1,709 522 1,770 1,402 724 1,694 2,362 4,143 5,408 6,624 8,445 1,034 35,837 Total Miles Per Month 2,798 2,714 4,627 2,818 1,868 7,252 4,961 9,707 17,205 16,940 19,606 6,661 97,157 Estimated Cost Per Mile Per Month $5.47 $5.53 $4.96 $2.23 $3.43 $2.41 $4.83 $2.37 $1.65 $2.33 $4.46 $3.93 $3.35

Cost Per Mile- Billed Miles

Truck Number Total Miles 12365 11,561 14167 32,291 13340 17,468 16009 35,837 Miles 97,157 Cost Per Mile $3.35

Cost Per Mile Per Month Including Expenses and Billed Miles

10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 J u l y A u g u s t S e p t e m b e r O c t

• b

e r N

• v

e m b e r D e c e m b e r J a n u a r y F e b r u a r y M a r c h A p r i l M a y J u n e Months Miles

• $0.50

$0.50 $1.50 $2.50 $3.50 $4.50 $5.50 Cost Per Mile Miles Expenses (Cost) Cost Per Mile

Total Cost Per Mile Compared to Current Price Charged

$0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 Comparison of Current Cost Per Mile and Estimated Cost Per Mile Cost Per Mile Current Cost Per Mile Charged Estimated Cost Per Mile Per Month

Answers to Questions

• Does it pay to deliver all products or should some

merchandise be transported by common carriers?

• What is the cost per mile FS should be charging

for deliveries?

It is not cost effective to deliver all products with FS trucks. Some orders should be delivered by a common carrier. Since the estimated cost per mile is $3.35 and the current cost per mile charged is $2.00, FS should increase the cost per mile to $3.35.

• When should FS let common carrier’s transport

deliveries?

Revenue

• $150,000.00
• $100,000.00
• $50,000.00

$0.00 $50,000.00 $100,000.00 $150,000.00 $200,000.00 $250,000.00 $300,000.00 $350,000.00 $2.00 $2.25 $2.50 $2.75 $3.00 $3.35 $3.50 Charged Cost Per Mile Dollars Mile Revenue Profit or Loss

Break-Even Point Profit

Conclusion- My Recommendations

• Increase charged cost per mile
• Transport some orders by common carriers
• Possibly combine orders with other

GROWMARK locations if they are making deliveries to the same area.

Other Projects

Three Display Boards

• Christmas Tree and Shade Tree Display
• Precision Planters- Meter Max System Display
• GROWMARK FS Display

Displays

GROWMARK FS Display Christmas Tree and Shade Tree Display Precision Planters- Meter Max System

Thank you for allowing me to be a part of the GROWMARK internship program

And a special thank you to the

GROWMARK FS