Managing energy for a complex transportation network that incorporates multiple modes and truck types over international borders requires the correct data. With so much variability, using a national index to reimburse for fuel did not allow Arauco North America to accurately manage their fuel spend, leading to over-reimbursement, under-reimbursement, and inaccurate emissions reporting.
Arauco North America recognized these challenges and made the decision to take a more active role by implementing a transportation energy strategy with Breakthrough®Fuel. Arauco North America’s Fuel Recovery program allows them to manage their transportation fuel consumption and spend in real-time and at the lane-level – despite their dynamic mix of modes and geographies. After one year on the program, Arauco North America increased network efficiency and optimized diesel fuel reimbursements.
The Importance of Transparency
Transparency into actual fuel prices is crucial to consider when moving freight across borders and between different modes. With each leg of the journey, the cost of fuel to move goods to market can vary drastically. Arauco North America has thousands of Intra-Canada shipments that cross the U.S. border resulting in the need for a unique reimbursement strategy due to the Canadian fuel market. Specifically, Canadian fuel is taxed and managed differently than in the U.S., and Fuel Recovery accounts for those discrepancies down to the penny as freight moves back and forth between jurisdictions. Characteristics of Arauco’s flatbed shipping segments were also considered.
Sixty-five percent of their carrier base are flatbed carriers. The flatbed shipping market has a more fragmented carrier base, smaller-size carriers, and it is difficult to find natural turns in networks. Though these characteristics aren’t unique to flatbed shipping, flatbed carriers purchase fuel no differently than their dry van and refrigerated fuel counterparts – by locking in fuel discounts with fuel providers. Breakthrough®Fuel has the data and industry insight to consider all aspects of a shipper’s transportation strategy—flatbed, dry van, refer, and otherwise— and turn them into opportunities.
Creating Custom Strategies, Driving Network Efficiencies
Understanding the unique characteristics of Arauco’s transportation network allowed Breakthrough®Fuel to create a custom transportation energy management strategy to drive overall network efficiencies. Additionally, Arauco North America was able to use the benchmarking data provided by their Fuel Recovery program to impact their strategic thinking for 2018 and beyond – eventually adopting a more accurate MPG change across their entire network that is more reflective of their carriers’ profiles.
After a year-long relationship with Breakthrough®Fuel, Arauco North America is now preparing for their next year of fuel management. Arauco North America has complete transparency into their specific lanes, fuel consumption, and spend. Moving forward, the company can work towards continuous improvement in both consumption and network optimization with confidence that they have the industry expertise and real-time data to make insightful and strategic decisions.
For more information about Breakthrough®Fuel solutions contact us!