Supply Chain Optimization

Carriers make money from Diesel + we are helping Ukraine - T|WO

Written by Tom Moore | Mar 16, 2022 5:00:00 AM

Diesel topics worth repeating:

  • Street prices react to oil’s rise quickly — but when oil falls, the price you pay lags far behind.
  • In traditional contracts, carriers make incremental income out of fuel surcharges:
    • Their real mpg vs. that contracted to add margin.
    • Using national average price vs. regional rates. We all know California costs are vastly higher.  If you aren’t shipping there, don’t include that in freight-cost calculations.
    • Large carriers don’t pay street prices.
  • Hedging works when it is a consistent program — not buying during an “event.”

Good luck trying to claw back any of these savings in this environment.

T|WO team members are helping Ukraine

  • Rafal, who lives 50 miles from the Ukraine border, went to the border Friday to provide food for the refugees. He will go again next week — this time with gifts of children's toys from our team members
  • Ivan and his wife Elena (Who is also on the T|WO team) quickly decided to leave their hometown of St. Petersburg as soon as the war started. Happily, after many trying days,  they are now taking refuge in Mexico.