Fuel Price Trends

Green Bay, WI - January 2, 2013 - As we start a New Year, companies will begin exploring how changes in both the domestic and global fuel marketplaces are impacting their supply chain; a result of 2012 being the most expensive year ever for transportation fuels.

On average, nearly 40% of any product’s freight cost comes from fuel costs. “In 2013, opportunities to manage energy costs will be a prime focus for supply chain professionals,” explained Craig Dickman, CEO of Breakthrough®Fuel. He offers these tips:

• Understand how changes in the fuel marketplace affect your business supply chain. If your fuel management program was designed four or five years ago, it’s outdated. Energy price behavior has changed the game.

• Agree on how much volatility in fuel prices you can afford. How much can your product’s cost move before you are uncomfortable? Fuel costs are a leading reason behind missed margins and budgets.

• The rules surrounding fuel are changing. Very specific changes are taking place in a variety of geographic areas. For instance, low carbon standards in California or required bio-blends of diesel in certain states. Know how much of your business is going into markets impacted by local or regional changes.

“Geopolitical risk throughout the world has greatly impacted the fuel market and it’s proven costly for companies,” said Dickman. “Plus, local and regional influences caused fluctuations in fuel prices.”

As for 2013, Dickman sees the upward fuel price trend continuing. “There will be higher than normal volatility, with significant price swings,” he said. “Gone are the days of $50-a-barrel of crude oil.”

Breakthrough Fuel is a supply chain management and energy advisory firm, with patented processes, that help shippers understand and manage transportation energy lifecycles and costs.