Wholesale and retail fuel suppliers have an endless challenge to improve margins. Suppliers must manage a complex ecosystem of product contracts and pickup locations. On any given day, there are lifting requirements to satisfy along with an array of physical barrels and financial positions to track. Add in the uncertainty of inventory value and freight costs and it is easy to see why margins can erode at the drop of a hat.
Physical Product Cost Variables
Each physical delivery has a wide array of variables that contribute to the challenges that wholesale and retail fuel suppliers have to improve margins. Product costs can swing quickly between fixed price and index based contracts in volatile market conditions. Freight and freight surcharges can add complexity in tight supply situations. Add differentials, tariffs, and an array of other circumstances and the complexities to manage and improve margins become untenable.
Contract Fixed Volume Commitments
During the optimization process, an important key factor is following and managing fixed volume commitments. These commitments may be supply commitments or customer commitments. In either scenario, C3 navigates the process of ensuring we are fulfilling these commitments on a rateable basis while also managing supply costs to improve margins continuously.
How can C3 help improve margins?
C3 Wholesale Fuel Supply software can manage price and margin risk by using a sophisticated Optimization Engine to calculate all the required variables to land at your “best buy,” including:
- A portfolio of physical contracts and financial instruments
- Oversight of all paper trades such as swaps, options, and futures
- Price positions and unpriced position management
- WACOG inventory value calculated and updated in real time
- OPIS and Platts integrations
- Geographic preference to reduce fleet miles
- Freight cost management by carrier, origin, destination, and product
- Freight surcharge real time calculation
Learn More
With over 25 years of experience, our team knows what works and how to best leverage wholesale supply ERP technology to improve margins. Let us help you streamline your operations and start reducing market risk today!