Diesel Category Sourcing Guide
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The US trucking industry consumes over 50 billion gallons of diesel per year. While diesel is one of the largest spend items at a trucking company, oftentimes its spend is not optimized. Fuel retailers may actively test fuel optimizer inflection points to achieve the highest volume at the highest price. This report provides buyers with the tools to ensure they are correctly leveraging their volume and their suppliers' cost advantages to achieve the best price in each market. Key takeaways include:
- Retail Competition - Less than 10% of US truck stops have only one competitor within 50 miles, while the vast majority of stops compete with three or more locations.
- Retail Value Chain - Through direct agreements with refineries, fuel retailers can secure pricing below local rack benchmarks. Each supplier's value chain should be reviewed to ensure contract pricing accurately reflects their cost drivers.
- DEF Developments - The diesel exhaust fluid (DEF) market has experienced volatility over the past few years but pricing has begun to stabilize. Historically high prices should be challenged
- Fuel Optimizers - Fuel buyers should ensure their fuel optimizers take all pricing parameters (e.g. retailer value chain, tax incentives, rebate thresholds) into account. Cost elements should be reviewed on a regular basis to limit any supplier manipulation.
- Retail Negotiations - Structured negotiation templates should be developed and utilized to achieve fuel savings.
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