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10/15/2004
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J.B. Hunt Uses IT To Tackle Rising Fuel Costs

The logistics company uses Manhattan Associates' app to get daily updates of fuel prices across the country, which helps it determine which stations truckers should stop at for the lowest prices.

Rising gas prices could easily take their toll on J.B. Hunt Transportation Inc., a trucking and logistics company. Gas is the No. 2 expense for the company, behind driver wages.

This year J.B. Hunt will spend more than $250 million for fuel, up 40% from 2003. "It costs us 33 cents per mile just in fuel," says Gary Wicker, senior VP of engineering services at J.B. Hunt, which has 10,000 truck cabs and 48,000 trailers. "It's up almost 61 cents per gallon from a year ago."

Even with skyrocketing fuel costs, Wicker believes the company has an advantage. Manhattan Associates Inc.'s Fuel & Route Planning application, running on an NT server, gives the company insight into fuel prices for any specific route. Daily updates of diesel fuel prices across the country feed into the software, which adjusts for local taxes, to assist in determining where truck drivers should stop to fuel up. A Qualcomm satellite communications system delivers the information into a display in the truck's cab.

With company trucks traveling close to 1 billion miles annually, every cent means 0.16 cents per mile in cost increase. At the end of the year, J.B. Hunt will pay close to $1 million for every cent that fuel costs rise. "If we can have a tool that saves a cent or two, multiply that by a billion miles, it will be well worth it," Wicker says.

The company began using Manhattan Associates Fuel & Route Planner in 2000. Since then, it figures it's saved on average a 1.5 to 2 cents per gallon. The system is offered to its drivers on a volunteer basis. J.B. Hunt offers incentives to use the application, though not all drivers comply. "If they did," Wicker says, "I believe the company could save 4 cents per gallon."

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