When purchasing fuel, timing is everything. Buying the right amount of fuel at the right price and having it delivered just when it is needed is not an easy task. Fuel buyers who adopt industry best practices and employ a combination of strategic sourcing strategies find that they are able to bring costs down and keep them under control.
Fuel is a major expense for manufacturing companies. That expense either manifests in the fuel used within their own fleets, or it is embedded in the rising cost of raw materials. One thing is for certain: it is their most volatile expense. Throughout each day, fuel costs can vary roughly five cents per gallon, and that variance can fluctuate as much as 25 cents up or down. Manufacturing companies with fleets whose fuel managers mistimed fuel purchases can inflate an already bloated expense item and directly impact their bottom lines.
This year alone, companies from a variety of different industries have had to lower their earnings expectations due to exorbitant fuel costs. For example, Waste Management Inc., which has the fifth largest private fleet in the country, missed its earnings estimate earlier this year in part due to fuel costs.
The combination of high fuel costs and price volatility is a significant challenge for businesses across the U.S. It comes as no surprise that many manufacturing companies are taking steps to diminish the impact of high fuel costs and simultaneously bring more predictability to their fuel spending.
