GROWMARK FSLogistics

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

Total Truck Miles and Fuel for 4 Trucks

Truck Number Fuel in gallons Miles Miles/Gallon

123653300.80 22789 6.904

141678793.00 44847 5.100

133405449.50 31223 5.730

160097973.50 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- NovemberDepreciation

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- MayDepreciation

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 YearDepreciation

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 MilesTotal Billed Miles

Truck

NumberJuly August Sept. October Nov. Dec. Jan. Feb. March April May June

Total

Miles

12365140 279 309 0 0 1,115 771 2,365 3,863 1,719 1,000 0 11,561

14167319 861.9 1,199 1,416 1,144 2,827 620 2,505 5,207 6,190 6,609 3,393 32,291

13340630 1,051 1,349 0 0 1,616 1,208 694 2,727 2,407 3,552 2,234 17,468

160091,709 522 1,770 1,402 724 1,694 2,362 4,143 5,408 6,624 8,445 1,034 35,837

Total Miles

Per Month2,798 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

1236511,561

1416732,291

1334017,468

1600935,837

Miles 97,157

Cost Per Mile $3.35

Cost Per Mile Per Month Including Expenses and Billed Miles

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

July

Aug

ust

Sep

tem

ber

Oct

obe

r

Nove

mbe

r

Dece

mbe

r

Janu

ary

Feb

ruar

y

Mar

ch

Apr

il

May

June

Months

Mil

es

-$0.50

$0.50

$1.50

$2.50

$3.50

$4.50

$5.50

Co

st

Per

Mil

e

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

Co

st

Per

Mil

e

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

Do

llars 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