Your Strategic Transportation Partner
Breakthrough is a strategic transportation partner empowering shippers with data, technology, and market knowledge to reduce cost, create fair partnerships, and improve transportation network efficiency and sustainability.
Explore our services to discover your transportation network's opportunity.
A Holistic Approach to Transportation Management
Breakthrough shippers represent some of the most innovative, expansive, and influential transportation networks in North America. Powered by our clients' data, insights, and experiences, we design and maintain comprehensive network strategies as dynamic as the market you ship in. The value of a Breakthrough partnership is clear.
Empowering the world’s leading shippers
Industry-leading shippers use Breakthrough to create a competitive advantage in their supply chains.
You trust them emphatically, because of the sheer amount of information we give them and things that they have at their fingertips. They’re the kind of partner you want to have.
Sr. Director of Transportation
Transportation Solutions for Shippers
Breakthrough offers a suite of strategic and operational services in the FELIX platform, all designed with accuracy, transparency, and fairness in mind.
Optimize your transportation network using strategic recommendations derived from real-time performance metrics.
A Strategic Platform For Contract Freight
Meet FELIX—Breakthrough’s strategic transportation platform that uses an unbiased industry view and pure dataset to design and maintain better contract freight partnerships for the world’s leading shippers.
The Latest From the Breakthrough Blog
Check out our blog for updates about trends in the transportation industry, fuel management, and supply chain transportation optimization.
August 30, 2021
Hurricane Ida Hits U.S. Gulf Coast Near New Orleans | Advisor Pulse
Energy Market Update
Hurricane Ida quickly intensified to a Category 4 hurricane as it made its U.S. Gulf Coast landfall near New Orleans, Louisiana energy hub on Sunday, August 29. Ida has since dissipated to a tropical storm that is expected to move northeast to parts of southern Mississippi, the Tennessee and Ohio Valleys, and Southern Appalachians through Wednesday, September 1.
Thus far, crude oil and diesel price increases have been limited to less than $1.00 per barrel and 2-3 cents per gallon, respectively. This is largely due to unknowns surrounding the severity of the storm’s damage to production infrastructure and timelines for restarting operations. Preliminary damage estimates indicate multiple New Orleans-area refineries may need to wait a few weeks before beginning restart procedures, but exact schedules are yet to be determined.
Ida's Impact on Supply Fundamentals
The storm’s energy market implications from a supply standpoint are primarily centered on Louisiana. New Orleans and Baton Rouge alone house nine refineries that represent about 13 percent—2.4 million barrels per day—of total U.S. refining capacity, of which nearly 1 million barrels was shut in leading up to Ida’s landfall. Additionally, about 96 percent of the U.S.’ total offshore Gulf of Mexico crude oil production was shut down while the storm moved toward the coast.
Implications for supply and price are expected to be greater for refined products, however, because the hurricane was much weaker near offshore oil platforms prior to its New Orleans arrival. Colonial Pipeline Company also announced it was closing its two main gasoline and diesel lines that pump products up the eastern seaboard to North Carolina as a precautionary measure. This should add to the supply disruption and could create a fuel price response similar to what we saw during the Colonial’s outage in May.
Ida's Impact on Prices
Diesel price pressures are expected to extend beyond Louisiana in the coming days as local power outages and flooding persists. The state’s large footprint on refined product production and distribution means neighboring states could see some supply shortages that draw down inventories during the restart period.
Diesel, gasoline, and crude oil inventories in the U.S. are all presently below the five-year average, meaning the offline refining and crude oil production this week should further deplete inventories and support prices. While a lack of clarity around refinery and pipeline operations is currently insulating prices, we think refinery and pipeline downtime may create minor regional diesel price premiums in coming days.
Freight Market Update
Hurricane Ida disrupted transportation infrastructure around the New Orleans market across multiple modes of transportation. This will likely cause delays and tight capacity in the region as the area recovers from the storm.
Truckload shipments typically ramp up ahead of storms making landfall, but this was not necessarily the case this go around. It may be because the storm was not anticipated to reach a Category 4 level until a day before it hit the U.S. Gulf Coast. It is expected, however, that the recovery will call for a larger spike in freight demand into Louisiana, with the already-tight capacity potentially resulting in climbing spot rates.
From an intermodal perspective, all Class I railways have announced they had to shut down terminals and interchange facilities due to flooding. This will add to intermodal congestion that has been occurring throughout the pandemic. Below are a few of the closures that were announced. Shippers should expect delays in freight moving to or through New Orleans.
Norfolk Southern (NS) closed their New Orleans terminal Monday but is expected to resume operations on Tuesday. NS told its customers to expect delays of 48 to 72 hours for all shipments arriving or departing from the terminal.
Kansas City Southern (KCS) suspended mainline operations and interchanges from New Orleans to Baton Rouge and Gulfport & Hattiesburg, MS. There is currently not an estimated time to reopen because they are waiting for the flooding to recede.
BNSF shut down all operations between Lafayette, LA and New Orleans ahead of the storm’s arrival starting Saturday, August 28.
Union Pacific (UP) suspended operations at its Avondale, LA terminal ahead of the storm’s arrival starting Friday, August 27.
Some additional U.S. ports in the Gulf of Mexico closed Monday, including the Port of New Orleans and the Port of Mobile. These are expected to be short-term closures, potentially opening back up as soon as Tuesday, August 31.
We will continue monitoring the storm’s fuel and freight market impacts in the days ahead and provide further updates should any major developments follow Ida’s regression.
August 25, 2021
How is Breakthrough Fuel Recovery Calculated?
Breakthrough is committed to removing distortion, achieving transparency, and establishing fairness across shippers’ freight strategies. One element, among others, is key to realize these three principles in shippers’ transportation networks. That key is in the way they calculate and reimburse for the fuel that moves their goods to market.
Fuel Recovery is the only shipment-specific, market-based fuel reimbursement program in the industry. Using daily fueling station data from across North America, Breakthrough brings accuracy and transparency to a historically distorted line item in shippers’ budgets. The transition to a Fuel Recovery program removes excess costs which helps establish a baseline to inform ongoing strategic improvements to both fuel and freight strategies.
Currently, diesel fuel reimbursements are calculated as a surcharge based on the department of energy’s retail diesel price index (DOE Index). And although this settlement process is highly relevant and necessary in the shipper and carrier relationship, the calculation shippers use hasn’t been updated or addressed in decades. The DOE index was established in the early 1980s but was never designed to accommodate the intricacies of commercial trucking fuel calculations. To this day, many shippers rely on it to control almost 30 percent of their total transportation shipping costs.
Interested in learning more about the history of the DOE diesel fuel price index and its applications in commercial transportation? Read about it on our blog.
Why Are Fuel Surcharges Are Distorted?
Fuel surcharge rates that use a diesel index are an inherently incorrect way to calculate your fuel consumption because they are simply not intuitive enough to capture the complexities of a shipper’s unique transportation network.
First and foremost, the DOE diesel fuel index price is based on a sample set of less than 10% of all diesel fueling stations across the U.S. and is published weekly. This places the burden of a dynamically changing and variable cost in the hands of a stagnant calculation and incomplete dataset. This single price point provided via the index is then used as an input for rate-per-mile reimbursement costs that result in a surcharge.
The result? The cost differential between a traditional index-based fuel surcharge and the market price for diesel fuel on a shipment can sit around 40 cents per gallon – and in 2020 hit a high of over $1.14 cents per gallon. This price per gallon “spread” adds up as it accrues over millions of miles and thousands of shipments.
How to Take Control of Your Trucking Fuel Surcharge Rates:
Managing your fuel spend is one of the most immediately impactful strategies shippers can take to reduce costs. Return on investment starts on the first shipment on your first day on the program, and savings continue in perpetuity with the ebbs and flows of the market. In 2020, when the fuel market was reached historically volatile levels, Shippers on Fuel Recovery decreased their over-the-road fuel cost exposure by over 46%. This is made possible by addressing 4 key distortions present in the current index-based fuel surcharge from your strategy.
4 Elements of a Market-Based Fuel Reimbursement with Fuel Recovery
Not only does national fuel surcharge distortion originate in four key areas, but it can also be solved by addressing the following elements in your fuel calculations with Fuel Recovery:
Time: Wholesale diesel prices can fluctuate abruptly. Breakthrough Fuel Recovery clients capture daily fuel price changes, ensuring they always pay the right price from the day of their shipment.
Price: Well-managed carriers procure fuel at wholesale prices, but the DOE provides a retail index for diesel fuel. Fuel Recovery calculates reimbursements according to the price your carriers incur at the pump.
Tax: Over-the-road fuel taxes vary dramatically by state and make up a large portion of total diesel costs. Fuel Recovery accounts for taxes by state, the way carriers pay fuel taxes.
Geography: Diesel commodity costs vary substantially from one market to the next, creating regional variance. Fuel Recovery accounts for the differences in regional pricing by calculating fuel prices specific to each lane your goods travel on.
Breakthrough Fuel Recovery calculations consider the price, tax, time, and geography of every individual freight movement. Fuel Recovery pinpoints where and when your freight travels and uses parameters specific to your network, like fuel efficiency, to calculate the cost of diesel on individual movement. We tap into a more complete dataset, including thousands of fueling locations across the United States and look at the costs your carriers encounter along each route.
Using Wholesale Diesel Fuel Costs
The DOE Index is reflective of retail fuel costs; however, most well-managed carriers procure fuel at a discount, often near the wholesale diesel fuel level. Diesel enables the service that carriers provide, so it should, therefore, be a pass-through expense. Shippers should reimburse their carriers based on the same price information their carriers experience on a shipment.
Prices Fluctuate Daily
From global geopolitical uncertainty to traumatic weather events, and everything in between, prices can shift at a moment’s notice. These variables drive market fluctuations in the price of fuel seven days per week, 365 days a year. Using a weekly update overlooks this volatility resulting in fuel price risk for both shippers and carriers.
If prices dip following a significant event, like the coronavirus pandemic or the crude oil price crash in 2020, shippers’ cost of diesel fuel should follow. Conversely, when prices spike following a hurricane or crude oil production decision from OPEC, their strategy should fairly reimburse their carriers for those elevated costs.
Accounting For State Taxes
Carriers pay diesel fuel taxes according to where fuel is consumed, and taxes can account for anywhere between 5 and 30 percent of the price of a gallon of diesel. States like California and Pennsylvania have significantly higher state taxes than states like Oklahoma and Missouri—a difference of as much as 65 cents per gallon. Paying a national average fuel price means you are disregarding the specific tax structures that affect your network.
Geographic Variability in Prices
Your fuel reimbursements should follow varying diesel fuel prices by state and from station to station. A gallon of highway diesel in Los Angeles, CA is priced differently than a gallon purchased in Houston, TX, or in Fargo, ND. To accurately account for geographic variance, Breakthrough Fuel Recovery uses shipment origin and destination data to ensure fuel reimbursements are only calculated from truck stop data along your individual shipment’s route.
If you are shipping freight through Oklahoma, why include New York or Florida pricing in your reimbursement calculation?
Its Time to Ditch the DOE and Use Market-Based Fuel Prices for Reimbursements
Industry best practices are shifting, and shippers from every industry vertical, and of every size are taking control of their transportation fuel spend.
August 11, 2021
Bring Agility to Your Supply Chain with Fuel Management
Developing an effective supply chain strategy is an increasingly complex task. From new technologies and changing regulations to the volatile fuel market and other seemingly unpredictable elements, shippers have numerous factors to consider.
That’s why many organizations have adopted agile supply chain principles. Whereas a lean supply chain concept focuses mostly on removing inefficiencies to reduce costs, agility includes the ability to be flexible and adapt to change as challenges present themselves—and the pandemic has presented a compelling case for it.
But when you think about agile supply chains, many immediately think about manufacturing operations, transportation networks, and crisis plans. And while these are certainly important considerations, a truly resilient strategy looks at all of this, in addition to lesser-known threats, to ensure they are navigating efficiently.
Managing a Previously Untouchable Cost with Agility
Breakthrough has long championed market-based fuel reimbursements because we believe that using a surcharge to manage one of the most volatile costs in your supply chain is not an industry best practice.
Using daily fueling station data from across North America, Breakthrough brings accuracy and transparency to an otherwise distorted practice that historically exposed shippers’ supply chains to unnecessary costs.
But how does a market-based approach to fuel management, like Fuel Recovery, make your strategy and planning more agile? Three key elements emerge when shippers make the switch:
Faster Response Time by Staying Proactive
Flexibility in the Face of Disruption
Cost Efficiency Enabled by Real-Time Accuracy
Staying Proactive and Anticipating Changes Lead to Faster Response Time
An agile supply chain must be able to respond quickly, adjusting to disruptions and fluctuations in supply and demand as fast as they occur. While some organizations primarily react to changes in the market, truly agile shippers are often expecting that change and already have a strategy in place to address it.
Geopolitical events, natural disasters, policy, and overarching market economics can impact fuel prices with little warning. This makes prices volatile, and traditional fuel management practices make it almost impossible to respond to rapid changes quickly. Most traditional fuel surcharge calculations only update their index-based pricing information weekly, and when changes happen faster than their data does, shippers end up paying inaccurately for six out of seven days.
What better way to improve speed than to stay ahead of the game? Beyond transitioning to market-based fuel reimbursements—which update daily as the market ebbs and flows—going beyond fuel calculations becomes crucial. Seeking unbiased market analyses and trustworthy forecasting becomes paramount to preparing your team and operations for anything that comes their way.
Better Data and Nimble Operations Provide Flexibility in the Face of Disruption
The entire transportation industry is organized around creating robust plans that attempt to encapsulate the intricacies of a shipper’s network for the year ahead. But we all know, and have experienced first-hand through the pandemic, that the transportation industry is incredibly complex and can change at a moment’s notice.
When massive disruption strikes your network and plans are sent into disarray, transportation teams are set in motion to adjust. As your team performs a network triage, several things rise to the top as high priorities—getting your goods to market, communicating with internal stakeholders, and addressing changes in cost or budgeting.
But Fuel Recovery is designed to be agile at the outset, giving shippers confidence that their costs will adjust automatically, relieving a shipper’s transportation team to focus on other, more pressing tasks. This eliminates rework with your carriers and TMS to adjust pricing after major price swings–like when the price of crude oil dipped below zero early in the pandemic–and your conversations can remain more critical and strategic.
Real-Time Accuracy Creates Cost Efficiency
An agile fuel management strategy will free up strategic time and energy to address other challenges, and it will also decrease response times. But one of Fuel Recovery’s most notable benefits is cost aversion. With traditional fuel reimbursements, there will always be a “winner and loser” when markets move quickly. Fuel Recovery eliminates this dynamic because shippers and carriers align around precise fuel costs on every shipment, every day.
On average, the discrepancy between actual fuel costs and reimbursed amounts is around 30 cents per gallon. Over millions of miles and thousands of gallons, those costs add up and create inaccurate baseline accounting and consumption information that is difficult to measure, manage, and improve upon.
As shippers move from an index-based program into market-based fuel management, their initial goals are to gain transparency and align the true cost of fuel with their transportation budgets. But that’s only the first part of how a Fuel Recovery program benefits shippers. Shippers can use this clean and accurate data feed, brought to life in the FELIX platform, to identify advantageous mode conversions, emissions reductions initiatives, and to identify best-fit carrier matches on every lane.
Since overall fuel costs tend to make up 20-30 percent of the cost of moving goods to market, the ability to better manage fuel expenditures will make a significant difference for both your bottom line and your ongoing strategy. Agility relates to every aspect of a successful supply chain, including even the most difficult to manage and volatile line items in your control.
Talk to one of our experts
or start exploring the power of FELIX.