E2open Delivers Data-Backed Insights on the Value of Fuel Recovery

Fuel is no longer a cost that leaders can afford to manage indirectly. As fuel costs remain volatile, finance and supply chain leaders are reevaluating whether traditional fuel surcharge models still serve their organizations. Building on previous research, a recent study conducted by E2open analyzed transportation performance among shippers using Breakthrough Fuel Recovery with E2open Transportation Management.

The E2open study evaluated whether a market-based fuel reimbursement strategy reduced fuel spend and impacted linehaul pricing when compared to traditional fuel surcharge programs. The results show participants achieved an average 12% reduction in fuel spend and contracted 3.1% closer to the industry linehaul rate benchmark than non-Breakthrough shippers.

An overview of the E2open fuel reimbursement study

The primary goal of the E2open study was to quantify the impact of a market-based fuel reimbursement program on shipper transportation costs. Market-based fuel reimbursement replaces once-weekly, national average index-based fuel surcharge tables with fuel reimbursement calculated from real-time, lane-level data. This approach treats fuel as a transparent pass-through cost rather than a margin-bearing line item.

The methodology analyzed six months of freight data from 40 large shippers across industries like retail, consumer packaged goods, and manufacturing. These organizations processed their freight movements through E2open Transportation Management, with Breakthrough Fuel Recovery managing the fuel reimbursement component. By comparing actual fuel reimbursements to what the shippers would have paid under traditional surcharge programs, the study provided a clear measure of cost savings and linehaul rate stability.

Two key outcomes for shippers using Fuel Recovery

The data from the study revealed two key outcomes for shipper participants using Fuel Recovery. These results provide logistics and finance leaders with an approach to reimburse carriers based on accurate market data. By treating fuel as a pass-through expense, shippers strengthen carrier partnerships and shift the focus of linehaul negotiations toward service.

An average 12% reduction in fuel spend

The 40 shippers in the study saved an average of 12% on their fuel spend. This represents a sustained cost reduction achieved through market-based fuel reimbursements rather than a one-time savings initiative.

For a shipper with an annual transportation budget in the hundreds of millions, a 12% savings on fuel translates into millions of dollars returned to the bottom line. By removing the premium that carriers traditionally build into fuel surcharges to hedge against fuel pricing volatility, organizations can use the savings to reinvest in other strategic initiatives, from technology upgrades to sustainability enhancements.

Contracting 3.1% closer linehaul rates to the industry benchmark

The study highlighted a 3.1% improvement to the industry linehaul rate benchmark. E2open found that operating closer to the industry benchmark prevents a shell game effect where fuel savings are offset by higher linehaul rates. Instead, shippers using Fuel Recovery see better overall pricing, which speaks to the maturity of their operational strategy and their approach to cost control, carrier management, and request for proposal execution.

Why transparent fuel reimbursement outperforms traditional fuel surcharge programs

Transparency in fuel reimbursement is a primary driver of operational excellence. Organizations that leverage market-based fuel reimbursements treat fuel as a strategic pass-through cost rather than a variable negotiation point. This precision allows leaders to move beyond the price of fuel and focus on their long-term supply chain goals.

This approach offers three distinct advantages:

• Transparent carrier relationships: When fuel is reimbursed based on actual costs, conversations with carriers focus on service.
• Data-driven decision making: With access to granular data on fuel consumption and wholesale fuel pricing, shippers make more informed decisions on mode conversions, fuel efficiency improvements, and zero-base strategies.
• Enhanced sustainability: Optimizing fuel reimbursement naturally aligns with sustainability goals. By understanding the true cost of fuel, companies are better equipped to implement initiatives that reduce consumption and lower emissions.

What market-based fuel reimbursement means for leaders

Adopting a market-based fuel reimbursement program provides significant advantages across an organization's leadership, from finance to operations and procurement.

• Finance: Finance leaders gain real-time visibility into fuel expenditures and achieve measurable cost savings by leveraging Fuel Recovery. With accurate, transparent fuel reimbursements integrated into existing workflows, organizations experience improved budget allocation, enhanced financial forecasting, and reduced unmanaged transportation costs. Breakthrough Fuel Advisor publications provide finance teams with ongoing insights to inform budget adjustments.
• Operations: Operations leaders can execute market-based fuel reimbursement without service tradeoffs. This approach removes the friction of fuel cost negotiations from daily management, allowing for stronger carrier partnerships centered on service.
• Procurement: Procurement teams can facilitate cleaner, more strategic request for proposal (RFP) conversations. When fuel costs are managed transparently and accurately, negotiations can shift from hedging against fuel price fluctuations to focusing on a carrier's core capabilities and service. This leads to more productive partnerships and a more resilient, high-performing transportation network.

Drive efficiency with fuel reimbursement technology

The shippers in the E2open study represent a growing number of companies that recognize the limitations of outdated fuel surcharge schedules. By implementing Breakthrough's Fuel Recovery solution, companies adopt a solution that delivers tangible results. Breakthrough's expertise in market-based fuel reimbursements has earned Supplier of the Year awards from companies such as Owens Corning, Novelis, and WK Kellogg.

When partnering with Breakthrough, companies expect a smooth integration with their existing data processes. Breakthrough minimizes disruption and offers best-in-class technical support to ensure a seamless transition. For leaders in operations, finance, and procurement, the message is clear: relying on traditional fuel surcharge programs leaves significant savings on the table.

Frequently asked questions about Fuel Recovery

Does market-based fuel reimbursement reduce total transportation cost?

Yes, the E2open study found that shippers using Fuel Recovery reduced their fuel spend by an average of 12%. This approach replaces outdated surcharge programs, lowering total transportation costs while maintaining strong carrier service levels.

Does Fuel Recovery increase linehaul rates?

No, Fuel Recovery does not increase linehaul rates. According to the E2open study, shippers using this approach contract 3.1% closer to the industry linehaul rate benchmark, preventing carriers from offsetting fuel savings with higher base rates.

How does Fuel Recovery differ from traditional fuel surcharges?

Traditional fuel surcharges rely on a weekly national average retail price, which often overcompensates carriers. Fuel Recovery calculates accurate fuel pricing using daily, lane-level wholesale data, accounting for the actual time, tax, price, and geography of each shipment.