"The cheapest mile is the one you never run”
— Johnny Dobbs, EVP Walmart Supply Chain (Ret.)
At $6.27 a gallon, diesel stops being a line item and starts being a strategy problem.
Here's the uncomfortable math. A tractor-trailer averaging 6.5 miles per gallon burns roughly 96 cents per mile in fuel at that price. Whether it’s your assets or a 3PL’s assets, you’re paying for it. After adding driver wages, equipment, insurance, and overhead, every unnecessary mile your network generates costs real margin. Every half-empty trailer is a load you paid for twice. Every emergency shipment is a planning failure with a freight bill attached.
The trap most executives fall into is treating fuel cost as a procurement problem. They renegotiate carrier rates, tighten fuel surcharge language, or maybe shop a broker or two. Although it’s worthwhile work, it optimizes the price of miles rather than eliminating miles. The larger money is in the miles you never should have driven.
Where the Dollars Leak
In distribution, transportation, and retail networks, the leaks are rarely dramatic. They're structural, they're quiet, and they've usually been normalized as "how we do things" or “comparable to last year/month/week.”
Six of the Most Common Leaks:
1. Sub Optimally Loaded Trailers
Trailers that leave the dock at 70–85% of cube or weight capacity are the single most common leak, and the hardest to see, because the load looks full. Causes include inaccurate item file dimensions and case pack quantities feeding every downstream calculation, order quantities that don't align to pallet or trailer math, poor mixed-SKU loading logic, cube-out versus weight-out imbalance, and inflexible ship windows that force departure before the trailer is filled. Bad master data deserves special attention. If your system believes a case is smaller or lighter than it actually is, your load planning tool will build a trailer that can't be built and your routing tool will price miles you can't avoid. If your system believes a case is larger or heavier than it actually is, you’re programmed to ship air.
Illustrative: a shipper running 1,000 annual truckloads at 80% utilization is effectively paying for about 200 loads that shouldn't exist. At 500 miles per trip, that’s nearly $100K in fuel alone. After adding in driver, equipment, and handling costs, you’re well over $200K in annual costs.
2. Poor Routing and Stop Sequencing
Routes built on habit rather than analysis produce deadhead miles, backtracking, out-of-sequence stops, and territory overlap between drivers or DCs. Static routes that were correct three years ago quietly decay as the customer or supplier base shifts. Nobody rebuilds them because nothing is visibly broken.
3. Order Cycle Mismatch
When order frequency, review periods, and replenishment cycles aren't synchronized to demand and transit time, you may generate the same volume in more frequent, smaller shipments. Small orders mean LTL and parcel rates instead of truckload economics, more touches, and more miles per unit delivered.
4. Network Misalignment
Facilities placed for yesterday's demand do not serve today's customers well. Symptoms show up as stress points: DCs shipping into each other's natural territory, long-haul replenishment that should have been regional, and cross-network transfers correcting for inventory that was positioned wrong in the first place. Transfer freight is pure cost — it moves product without moving it any closer to a sale.
5. Weak Inbound and Supplier Coordination
Inbound is where visibility usually dies. Suppliers shipping on their own schedules, prepaid freight with no rate transparency, missed delivery appointments that drive detention and overtime, and no consolidation across vendors in the same region. If you don't control inbound routing, your suppliers are making freight decisions on your behalf and billing you for them inside the cost of goods. If your prepaid suppliers are not reasonably optimizing for your needs, you are paying for it.
6. Expedites as Standard Operating Procedure
Every air freight charge, every hot shot, and every partial-load rush is a planning miss converted into a premium payment. When expedite spending is routine rather than exceptional, the number to examine isn't the freight bill — it's the forecast, the safety stock policy, or the supplier lead time that made it necessary.
Building a Better Diagnostic
You don't need a twelve-month study to find out whether this applies to you. Start with questions you can answer from data you already have:
What is our actual average trailer utilization by lane — measured, not assumed?
When was the last time we audited item file dimensions and case pack quantities against physical reality?
What percentage of our freight spend went to expedited or premium modes last quarter, and what root causes drove it? Are we getting better or worse?
How many miles did we drive moving inventory between our facilities?
What share of our inbound freight moves on our routing instructions versus the supplier's?
When was the last time our route structure and DC territory assignments were rebuilt from current demand?
What is our cost per unit delivered, by lane and by facility, and which lanes are outliers?
If several of those can't be answered quickly, that gap is the finding. Networks that can't measure utilization and mileage cannot manage them, and unmanaged networks leak at exactly the moments fuel is most expensive.
The Reality of $6 Diesel
Fuel prices are outside your control. Yet, miles, cube utilization, order cycles, network design, and inbound discipline are all inside it. The good news in a high-diesel environment is that the payback period on structural fixes compresses hard — the same load consolidation project that returns modestly at $3 diesel is twice as beneficial at $6 diesel. Eliminating expensive miles self-funds good supply chain work.
Key Takeaways:
Every mile costs roughly $0.96 at $6.27 diesel and 6.5 mpg — eliminating miles beats renegotiating them.
Trailer utilization is the most common and quietly expensive leak. Measure it before you assume it and verify the item file data underneath it. Also, visually look at load density—are you shipping air?
Routing, order cycles, and network design compound on each other — fixing one in isolation leaves money on the table
Inbound freight is where most organizations have the least visibility and the most uncaptured savings. Although your suppliers may be great, they’re looking out for themselves first.
Expedite spending is a symptom. Treat the planning failure, not the freight bill.
Let Us Find Your Leaks
Our team has a combined 100+ years in supply chain leadership helping businesses recover cost from exactly these failure points.
If $6 diesel is becoming a challenge, let's talk. Most engagements identify savings more than the cost of finding them. And structural improvements act like an annuity—at any diesel price.
CFO Systems — We Help Our Clients Grow!
CFO Systems was founded in 2004 in Omaha, Nebraska, and serves clients across America with Fractional, Interim, and Recruiting professionals. CFO Systems includes a team with over 3,500 years of experience as CFOs, COOs, Controllers, HR Executives, IT Project Managers, FP&A Professionals, Supply Chain Experts, and accounting staff. The firm has been named on the Inc. 5000 list of fastest growing companies 10 times in the last 12 years. Headquartered in Omaha, Nebraska, CFO Systems serves clients nationwide while working either on-site or remotely. Visit www.cfosystemsllc.com for more information.
SOURCE: CFO Systems
