By Angelo Profili and Massimo Leonetti
In the current economic climate; companies face numerous challenges; including the effective management of operating costs. One of the most significant expenses for many businesses; particularly those operating in the transport and logistics sector; is the cost of fuel. Optimising these costs is not only a matter of efficiency; but also of competitiveness in the market.
The Fuel Needs of Companies
Companies with vehicle fleets; such as logistics companies; couriers and transport services; must constantly monitor and manage fuel-related expenses. This is because fuel costs can account for up to 30% of a transport company's total expenses.
Market Data
According to research by MarketsandMarkets; the global automotive fuel market is expected to grow from £1.472 billion in 2021 to £1.688 billion by 2026; with a CAGR (compound annual growth rate) of 2.8%. In Europe; demand for automotive fuels continues to grow; driven mainly by the logistics sector and expanding e-commerce.
Importance of Cost Optimisation
Optimising fuel costs is crucial for several reasons:
- Competitiveness: reducing operating costs allows companies to offer more competitive rates and improve profit margins.
- Sustainability: efficient fuel use helps reduce CO2 emissions; promoting a more sustainable approach.
- Resilience: prudent fuel cost management helps companies better withstand fluctuations in the oil market.
Optimisation Strategies
There are several strategies that companies can adopt to optimise fuel costs; and ERA Group can help in the following areas in particular:
- Framework agreements with bulk fuel suppliers; with tenders to be repeated annually to reduce the time spent issuing orders; while staying up to date with market opportunities
- Fuel cards with monthly monitoring to highlight any anomalous behavior.
- Analysis and determination of the spread between the price paid and market values; using three indices: Platts; Staffetta Quotidiana; MiMiT (formerly Mise).
Optimising fuel costs is an essential requirement for modern companies. Through strategic management; businesses can not only reduce costs; but also contribute to a more sustainable and competitive future.
In an increasingly competitive market; optimising fuel costs is not only a smart choice; but an essential strategy for long-term success.
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