Greetings!
Spring is in the air. Ok, maybe if you live below the Mason Dixon line it is but not here in beautiful Warrington, PA. What is in the air is cold still and a very unruly stock market and fuel market so far for 2010. We are basically 60 days into the New Year and have seen the stock market move 7% down and up and all over. The fuel market even more $83 a barrel to $71 a barrel and back up again for a more than 15% change. All in less than 60 days. Heck, trading days are fewer with the short February and holiday filled January. Diesel fuel is down at least as I am writing this article by 12 cents since the beginning of the year. Of course it's 57 cents higher than this time last year. Let's see what March brings us. In fuel and especially fleet fuel for your trucks, it's always interesting.
Glen Sokolis
If you have an idea or topic you would like to see discussed here or if you would like to contribute an article for future issues, please e-mail me at gsokolis@sokolisgroup.com. |
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Sokolis
Solutions
Sure we want you to save money on your fleet fuel purchases but we want to make sure your drivers get to their destinations safe:
Drowsy Driving can be very dangerous, share with your drivers on what they should be looking for before it's too late.
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Yawning repeatedly
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Trouble keeping your eyes open
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Losing track of where you are
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Needing to stop short/ tailgating accidentally
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Head feeling heavy or sagging onto chest
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Drifting out of lane or onto rumble strips
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Feeling unfocused or dazed
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Slow reaction/missing traffic signs and signals
These issues happen a lot more today than ever before with the hectic schedules people have. Be safe. |
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You never know what we'll blog about next! |
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DOE Prices
as of March 1st, 2010
CenAtl = $ 3.013
LwrAtl = $ 2.844
Midwst = $ 2.825
GulfCst = $ 2.819
RkyMt = $ 2.851
WCst = $ 2.956
CA = $ 3.023
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Please visit our blog!
Sokolis Group in the News |
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Your company can help lead the country in Environmental Stewardship with these 3 Golden Rules.
-Recycle
-Reuse
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CarbonFund.org
Reduce what you can.
Offset what you can't.
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www.nptc.org
Visit us at booth #145 at the Annual Conference
April 18-20
Cincinnati, Ohio | |
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Fuel Management You Need It
Is Fuel Lost at Sea
Fuel Management might be lost at sea but it hasn't gained any demand on land either. What are we talking about? For the last eighteen months or so the volume of fuel being stored at sea in tankers had climbed rapidly. Last year we had almost 90 million barrels of crude oil or fleet fuel or heating oil floating around in this huge stockpile of extra volume. How is this going to affect your fleet fueling program?
That amount of fuel floating has declined to 43 million barrels and we will probably see that number erode even more as in recent weeks freight rates have risen and the spread in the price gap between storing it at sea and selling it at a later date has become even greater to speculate. This fleet fuel sitting on a tanker ship waiting for the price to rise has been another energy speculation that has been going on for awhile but several groups feel that this market is drying up. Even though the International Energy Agency expects a 1.8% growth in fuel demand in 2010, supply is still plentiful and spare capacity in oil producing countries remains high.
What caused energy speculators to take part in this fuel floating feast happens when oil on the spot market traded at a big discount to forward-dated contracts. In the futures market this is known as "contango." Yes, that sounds like some dance down in the Caribbean but it's a real fleet fuel supply name. Traders took advantage of that by buying crude or any type of fuel and putting it into storage on tanker ships to sell at a higher price at a future date. Risky, yes, but that is why they call it speculation. Now with the U.S. demand for diesel fuel and heating oil down almost 8% in January from a year earlier, there seems to be too much risk on betting on fleet fuel prices rising on floating tankers. This winter has been very cold throughout the largest heating oil consuming area of the country, the Northeast. Transportation has not shown any real signs of getting back especially in historical low freight months like January and February.
The Energy Information Administration is predicting in its latest reports that crude is going to come back and average $81 a barrel. We have heard others forecast oil prices rising, as they expect fundamentals to improve through 2010 and view declining inventories as the catalyst that will lift prices to $95/bbl by year-end. This could certainly happen if we can get our economy to start to grow at a little quicker rate than what it is currently doing. Yes, we always have China to push demand which I am sure they will but the U.S. demand can't be going down if oil prices are going to raise.
As I said in another article in early 2009, what kings want kings usually get. Does anyone remember that crude oil was around $40 a barrel at the time? King Abdullah of Saudi Arabia said the "fair price" for crude oil should be $70 to $80 a barrel. Since June 2009 the King has basically gotten what the king wanted. I don't know if we should expect that to change much until greed kicks in. What I do know is crude oil or the diesel fuel that you put in your trucks is one of, if not the most volatile traded commodities. As crazy as it trades, your fleet fuel vendors can and will charge you whatever they want if you don't understand the game or have time to watch.
Would you rather have fuel management experts helping you buy and manage your fleet fuel or would you rather leave it to chance? Are you fueling good? Let Sokolis Group help you www.sokolisgroup.com. |
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Testimonial
"Any organization that purchases fuel should, at a minimum, talk to Sokolis Group about how they can save them money. The truth is that Sokolis Group has answers to fuel questions that most organizations don't even know they should be asking."
Christopher Gavigan, Managing Director
Charon Planning |
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A few weeks ago Sokolis Group created a survey in Fleet Management, below are a few more interesting results we would like to share with you. Over 500 companies took part in the survey.
Fleet Management Survey
1) If you were to grade your fuel program (buying, auditing, negotiating, tracking) it would be:
No Program - 5.7%
Poor - 5.2%
Could be better - 35.5%
Good - 42.3%
Outstanding - 11.3
Sokolis Response: At Sokolis Group, fuel management is our business. Lowering the margin you pay your supplies, auditing fuel records, negotiating deals are some of the things that make our company successful. Even if you think you have a good fuel program like 42.3% of said, would it make you feel better if you had a company of fleet fuel experts look it over for you. With fuel cost being such a big part of your overall budget cost, why not take the steps to save additional money.
2) The number of fuel purchasing seminars you or your staff has attended in the past 2 years is:
None - 75.5%
1-2 - 20.6%
3-4 - 3.8%
5 or more - <1%
Sokolis Response:
With all that has gone on in the fleet fuel industry over the last few years, if you aren't attending seminars, how are you keeping up with information in the industry. You busy, you have 10,000 things on your plate. Let us help you www.sokolisgroup.com.
3) I read the following online for information:
ATA Newsroom - 23.7%
Truckinginfo.com - 22%
Fleetowner.com - 47.4%
Automotivefleetdirectory.com - 15.2%
Other - 20.3%
Sokolis Response:
These information services are all very good to read. We contribute articles several times a month on fuel management and fleet fuel savings to www.truckinginfo.com and www.automotive-fleet.com, we encourage you to take a look.
4) Do you feel fuel theft is an issue in the industry?
Yes - 52.7%
No - 43.3%
No Response - 3.8%
Sokolis Response: Ok, 52.7% of you get it. The national average for fleet fuel theft is over 1.2% of a company's fuel budget and over 2% for a fleet with gas vehicles. Is some of this fleet fuel stolen out of your trucks, yes. Is most of this fleet fuel stolen by your drivers or people connected to your fleet department, you bet. This is usually because most companies have poor processes for auditing their fuel transactions. They don't have fuel card limits or odometer readings being entered. They don't do proper inventory management of fuel coming into their bulk tanks and fuel going out. They don't audit the mobile fuel transaction prices or question extra fees or taxes. Fuel is a liquid as we all know, here now gone now. At $3.00 a gallon, it doesn't take a lot of fleet fuel to be stolen to have a real impact on your bottom line.
5) Do you currently, or in the past have a fuel price protection program?
Yes - 30%
No - 67.9%
Sokolis Response:
This is what we expected in this area. We believe if more people understood how a fuel price protection worked, that more people would use it. It might not flip flop the response ratios above but it might even them out to 50-50. Having fuel price protection is a nice way to ensure that you have a fairly stable fuel budget.
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Quote
Flaming enthusiasm, backed up by horse sense and persistence, is the quality that most frequently makes for success.
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