For shippers considering new cost-effective strategies, Fuel Recovery is one of the most proven cost avoidance opportunities with a strong return on investment in the industry. For 15 years, some of the industry’s largest shippers save millions by eliminating distortion in their fuel reimbursement practices with Breakthrough Fuel Recovery.
But beyond the basics of the program, some transportation professionals have reservations about a solution that is “too good to be true.” Despite the use cases, case studies, and client advocacy among Breakthrough Fuel Recovery participants, some may ask themselves, “If the data is sound, and the savings are prevalent, why doesn’t everyone do this?”
Every prospective client journey is different, but we see the same misconceptions arise time and again when discussing how to make Fuel Recovery a reality for future clients.
4 Myths about Adopting a Market-Based Approach
MYTH: Carriers will just reallocate my projected savings into linehaul.
BUSTED: Carrier selection and management are among the top priorities for transportation managers, so making changes to your relationship—even transactional—should be done mindfully. Because Fuel Recovery separates fuel costs from freight costs, shippers often ask, “Won’t they just adjust my linehaul rates to preserve their margins?”
An Analysis of the Operational Costs of Trucking: 2018 Update, ATRI Report
According to a 2018 report released by ATRI, the primary costs for fleets—including driver wages, equipment, insurance, and maintenance—increased year-over-year.
Linehaul rates increased incrementally across the industry for the last ten years due to equipment costs, expanding fleets, and economic conditions. The increase operated independently of fuel costs over that same time. When fuel is managed separately with a market-based approach like Fuel Recovery, shippers can understand how each line item drives costs in their budget. When this transparency is achieved, more informed linehaul rates can be negotiated based on service, capacity, and price.
This means your linehaul does not have to adjust following a Fuel Recovery implementation. Backed with the right data, shippers using Fuel Recovery engage in transparent, data-based rate negotiations. As such, linehaul rates usually show little variance after implementing Fuel Recovery.
Additionally, Breakthrough clients currently utilize over 5,000 carriers across North America. The carrier community is well acquainted with the Fuel Recovery methodology, and with the right change management strategy carrier feedback is consistent about the fairness and accuracy of the program. Breakthrough is dedicated to assisting new clients with their change management strategy to ensure the best possible outcomes.
Read more about how carriers still consider Fuel Recovery clients to be some of the best partners in the industry here.
MYTH: Change management will be challenging in my organization.
BUSTED: An insightful and supported change management strategy will solicit positive outcomes beyond your carrier relationships and will ease the transition for your internal organization as well. Prospective clients sometimes believe that restricted IT time, system constraints, and lack of a TMS system prohibit them from seamless implementation based on previous supplier integrations. But Breakthrough takes on the brunt of the implementation work to ensure that none of these parameters limit your ability to adopt Fuel Recovery.
Our team will train, educate, and integrate your team and systems with Fuel Recovery so that daily operations see no disruption and your team feels confident in your new program.
Read more about our implementation philosophy here.
MYTH: That program may work for some, but my freight is different.
BUSTED: While every transportation network is unique based on its distribution centers, weight, destinations, final mile strategies, and beyond, Fuel Recovery is an equalizer regardless of these characteristics. Whether your organization requires a dry van, refrigerated freight, bulk freight, flatbed, or intermodal, all loads are processed in the Fuel Recovery system to accurately account for the fuel that moves your goods to market. In fact, each of these modes can be implemented with different Fuel Recovery parameters, such as MPG, to account for the specialized freight within your network.
While your specific transportation strategy and goals are unique, the math, the data, and the transaction remain constant. Breakthrough focuses on both areas of consistency and outliers, ensuring your network is best positioned to realize your individual organization’s goals because the freight itself doesn’t prohibit value capture across shippers.
MYTH: Our current program is working just fine.
BUSTED: We find that the most common objection to adopting a Fuel Recovery program is that it is easier to do nothing and continue business as usual. Fuel and freight have been managed the same way for over thirty years, and many professionals either do not believe or are not bothered by these limitations.
It may be easier to do nothing, but is it right? Breakthrough clients recognize the challenges associated with an outdated program. They believe that fuel should be a pass-through expense and are willing to temporarily disrupt their status quo to chart a new, better path forward.
Fuel Recovery value is noteworthy, its implementation is painless, and its long-term benefits extend far beyond fuel. Choosing to say yes and facilitating internal buy-in is the hardest part, but once an organization is aligned behind an accurate, data-driven strategy, the opportunities are endless.
When prospective clients ask, “why aren’t more shippers managing fuel this way?” our response is simple. Over the last 15 years, the number of industry-leading shippers on Fuel Recovery has grown exponentially. This cohort of Fuel Recovery clients is not going away, and the use of market-based fuel reimbursements is a best practice that many in the industry are not only ready for but already believe strongly in.
Don’t let industry myths impede your ability to elevate your transportation strategy.