Taking a fresh look at energy management can lead to positive results for companies still relying on outdated methods. Smart shippers, including leading retailers, are discovering a better way to manage fuel costs.
Breakthrough worked with one of the nation’s top home décor, art, and hobby retailers to implement a successful Fuel Recovery program that could handle a network of carriers covering 38 million miles every year.
In talking with Breakthrough, the client realized how much diesel prices vary based on taxation, geography, and timing. The organization recognized its need for transparency, fairness, and accuracy in managing transportation costs. So, the company turned to Breakthrough for help improving visibility and decision making.
After implementing a Breakthrough Fuel Recovery program, the client experienced $2 million in fuel savings, which represented a 30% reduction in fuel cost during 2015.
In advance of the Fuel Recovery program’s launch, the client needed to communicate the change internally and with its carriers.
Breakthrough began by providing the client with current industry benchmarks and fuel efficiency best practices. This allowed the company to determine the correct MPG for its network. Intermodal rates were set to match the truckload efficiency for drayage portions, with rail MPGs to coincide with railway industry performance. Breakthrough designed the program to correspond with specific routes the carriers used, ensuring fair and transparent fuel reimbursement of intermodal transportation.
A key decision-maker within the client’s organization was selected to help align relevant team members with updated strategies surrounding fuel efficiency, transportation management, and reimbursement to carriers. This is an important step that helps ensure a Fuel Recovery program’s success.
Carrier relations proved to be no issue. As with most new programs, the retailer found that 80% of its carriers were already working with other Breakthrough clients. That 80% represented 98% of the company’s freight mileage. Since the majority of the client’s carriers were already familiar with the program and understood the benefits, there was little-to-no push back. Many of the client’s larger carriers had experienced how Breakthrough creates a fair and equitable reimbursement of their fuel expenses.
The client unveiled its Breakthrough Fuel Recovery program to carriers along with an RFP process in September of 2015 and announced final carrier awards at the end of the month. Fuel Recovery went live in October 2015.
As Fuel Recovery rolled out to the full carrier network during the RFP process, the client reported a decrease in overall freight rates. After implementing the program in Q4, just in time for the holiday shipping season, the client’s transportation department achieved $2 million in fuel savings, equating to a 30% reduction in fuel spend.
With Breakthrough Fuel Recovery, this national retailer’s fuel reimbursement is now based on real-time market prices rather than the less-accurate DOE Index. Expenses incurred while moving goods to market became better-aligned with the expenses carriers actually incurred at the pump.
Breakthrough is revolutionizing the market with custom transportation energy management strategies for the world’s leading shippers. We created the world’s first – and to this day only – enterprise dedicated to helping shippers achieve transparency in the fuel that moves their goods to market. We do this by removing the distortion found in traditional fuel surcharge programs. Distortion is replaced with fair and accurate fuel reimbursement between shippers and carriers using patented technology that takes a wide variety of data into consideration.
BREAKTHROUGH CLIENTS SAVED AN AVERAGE OF MORE THAN 30 CENTS PER GALLON IN 2016.
Contact Breakthrough today and we’ll tell you more. We’re changing the way it all works, and we’re looking for innovative market leaders who are ready to take charge of transportation energy management. Call us at (920) 617-3070.