Author
Smarter fill-ups
Aggregate producers should develop purchasing strategies for today’s volatile fuel-price market. Fuel costs can make or break the bottom line. Fleet operators sometimes build fuel-cost assumptions into their budgets, making it difficult to adjust to increasing or decreasing fuel costs. Effective fuel-cost management is a critical success factor. Starting in 2004, a “new normal” asserted itself within U.S. fuel markets. Day-to-day price swings of 3 cents or more – swings that previously occurred only 6 percent of the time – now happen almost half the time. Swings of 5 cents or more went from happening 1.6 percent of the time to happening 25 percent of the time. This volatility is now embedded within wholesale fuel markets, and it shows no signs of abating. Unfortunately, some fuel-purchasing managers use pre-2004 buying strategies that do not sufficiently address daily fluctuations in fuel prices. Many use spreadsheets and heuristics to time the market, or they lack diversification in their fuel portfolio. They believe they have adequate, contracted supply options. Some assume price swings… Keep Reading
