Walmart Managing logistics

Right now, we have been enjoying lower fuel prices.  Although we will never see the $ .35 gallon price that I remember 50 years ago, regular unleaded in late January is hovering close to the $2.269 mark in New Hampshire.  That price will surely creep up, however – actually, it has been on the upswing the past few months.  Diesel fuel that propels most of the nation’s trucks is in the low two-dollar range.

To that end, one challenge facing marketers and that is impacting logistics is the projected increase in fuel. Diesel fuel is around $2.309/gallon. When it heads further north, it will impact delivery costs, which are passed on (reluctantly) to the customer. Certainly the cost of energy, i.e., diesel fuel in particular, will cause major heartburn.  We saw this when diesel fuel was above $4.00/gallon around In36 months ago.  This manifests itself in the prices we pay for goods, as the marketer passes on to each channel member the cost of transportation, which has to include fuel costs. Walmart was similarly affected.  Walmart owns its fleet of trucks. Let’s look at this more in-depth… why is Walmart so good at managing logistics?  What do they have going for them?  How might this tie to energy costs for logistics?