Since 1938, the Mexican fuel market, which has been subject to a state-run monopoly, has not seen fuel prices change more than once per month. That changed over the weekend as the Mexican government implemented a new energy reform policy. The result: daily price changes in 90 separate zones throughout the country. It is creating volatility and confusion for businesses moving product in or out of Mexico; as a few cents difference can dramatically impact a company’s bottom line.
“This change has sent shockwaves throughout the supply chain,” said Heather Mueller, Vice President at Breakthrough, a global transportation energy management and advisory firm. “This is just the first phase of the rollout; there are more phases to come. Companies are concerned about what this will do to their supply chain costs and how they are going to manage those costs.”
“Although no one was sure the Mexican government was going to go through with deregulation, we proactively developed a solution last fall,” stated Mueller. “While you can’t prevent the price fluctuations, there are ways to handle it. It requires a de-coupling, or unbundling, of two pricing components: the cost to move product and the cost of fuel prices.” Breakthrough is working with a number of multinational firms, such as Unilever, to help them understand and minimize the impacts of deregulation.
Breakthrough has extensive experience in energy management, working with companies in 47 countries, supporting 5 billion miles+ of transportation, processing 11 million+ freight movements and managing 700 million gallons of fuel annually.
About Breakthrough: Breakthrough uses patented processes to help shippers create actionable strategies to reduce energy cost, consumption and emissions within their transportation supply chains. The firm has received the prestigious “Winning Through Innovation” award from Unilever and is a five time recipient of Procter & Gamble’s “External Business Partner Excellence Award.”
Breakthrough is a groundbreaking energy management company, helping shippers around the world achieve transparency and remove distortion from their transportation supply chains. Using patented strategies and expert industry insights to improve supply chain efficiency, Breakthrough cuts energy costs and consumption while reducing emissions. In 2016, Breakthrough helped its clients save more than 6.3 million gallons of fuel and reduced their collective carbon footprint by more than 75 thousand metric tons of CO2. The firm has received the prestigious “Winning Through Innovation” award from Unilever and is a five-time recipient of Procter & Gamble’s “External Business Partner Excellence Award.” Learn more at www.breakthroughfuel.com.
Phone: (920) 983-9700