Do Carriers Increase Linehaul Rates When Shippers Implement Fuel Recovery?

Fuel is one of the largest and most unpredictable expenses in transportation for shippers and carriers. That's why Fuel Recovery, the industry's leading fuel management solution, is embraced by the world's most reputable brands.

Breakthrough's Fuel Recovery solution goes beyond a single average price to consider factors like time, tax, price, and geography unique to each shipper's specific freight movements. This provides shippers with greater visibility into their fuel consumption and ensures carriers are fairly and accurately reimbursed. However, uncertainty sometimes arises regarding whether carriers will increase linehaul rates for shippers that adopt the market-based calculation. To address this uncertainty, e2open shared a study that supports our experiences.

Linehaul rate study by e2open on the impact of Breakthrough's Fuel Recovery solution

E2open, a leading provider of cloud-based, end-to-end supply chain management software, conducted a study comparing the impact of Fuel Recovery on two shippers. The two shippers had similar freight spend, the same transportation management system (TMS), and similar people resources supporting their request for proposal (RFP) process. The primary difference was one of the shippers implemented Fuel Recovery, while the other one did not.

Findings of the linehaul rate study and its outcome for Shippers

The outcome of the study was presented at Connect North America 2023, e2open's annual event. The results indicated that the shipper who implemented Fuel Recovery saw a greater decrease in linehaul rates compared to the shipper who didn't implement the program. Specifically, Shipper A, which implemented Fuel Recovery, reduced their linehaul rates by 11% compared to e2open's benchmark, while Shipper B, which did not implement Fuel Recovery, reduced their linehaul rates by only 8%. This suggests that carriers do not increase linehaul rates when shippers implement Fuel Recovery.

Fuel Recovery offers shippers a fair and accurate calculation to reimburse carriers, often resulting in sizable savings. With the significant impact of market events on diesel fuel costs, Fuel Recovery enables shippers to take control of their transportation spend and gain greater visibility into their network. Pairing this with a linehaul rate forecast further strengthens a shipper's ability to anticipate cost trends and make more informed, proactive decisions. 

Benefits of implementing Fuel Recovery

In addition to cost savings, implementing Fuel Recovery provides several other benefits for shippers.

1. Transparency and accuracy: Fuel Recovery's market-based calculation provides shippers visibility into their fuel consumption, eliminating the potential of overpayments due to generalized estimates.
2. Stronger shipper and carrier partnerships: Fuel Recovery ensures carriers are reimbursed fairly based on actual fuel costs and consumption rather than standardized averages. This promotes a positive relationship with carriers, encouraging continued partnership and a high level of service.
3. Sustainable practices: With a precise understanding of their fuel consumption uncovered by the Fuel Recovery program, shippers can identify areas for efficiency improvements, ultimately supporting sustainability goals by reducing their carbon footprint.

Fuel Recovery: Unlocking Savings, Transparency, and Sustainability

In conclusion, implementing Fuel Recovery leads to substantial savings, fosters transparency, strengthens shipper-carrier relationships, and promotes sustainable practices. By replacing averages with accurate, real-time data, shippers can take control of their transportation spend, ensuring fair and accurate reimbursements are made to carriers. The studies and real-life experiences depict that carriers do not increase linehaul rates following Fuel Recovery implementation. Thus, it's a data-driven decision that delivers tangible benefits, making it an integral component of a successful, cost-effective, and sustainable transportation energy management strategy.

Take control of your fuel expenses today! Schedule a demo of Fuel Recovery and experience the benefits for yourself.