In Conversation
What the fuel oil distributor needs in 2018
In Conversation
The need to stay ahead of the competition
ARMED WITH 30 YEAR ’ S EXPERIENCE OF DOWNSTREAM FUELS , INCLUDING SIX YEARS AT WORLD FUEL SERVICES RUNNING INLAND WHOLESALE AND B2B SALES , MARK WADDINGTON HAS SET UP GRAFTON RIDGE , A DISTRIBUTOR ADVISORY SERVICE
“ Choosing to run fuel buying as a separate activity , with the aim of saving or making money , will put you ahead of the competition ,” says Mark Waddington , pictured here at last year ’ s Tank Storage Association conference
As an independent consultant , Mark is now supporting businesses working in commercial fuels in both the UK and Europe . Fuel Oil News editor Jane Raphael spoke with Mark about the fuel distribution market , asking firstly how he viewed the challenges and opportunities facing today ’ s fuel distributor .
“ In a mature market , where less heating oil is now being used , the competition is intense . This presents a big challenge particularly when coupled with a consolidating market and the need to reduce your cost base to survive .
“ That said , the current market does present a big opportunity for those regional and local distributors who can keep operating costs low . Many of these distributors offer a much-enhanced customer service enabling them to better compete as a customer ’ s preferred option .
“ Saving as little as 0.1 ppl on fuel buying costs can make an enormous difference to a distributor ’ s success . A medium-sized distributor selling three to four million litres per month would save around £ 50,000 per year with the right decisions .
“ I know the supply business very well and can help fuel distributors to not only buy better but also benchmark fuel buying against other distributors ,” explained Mark .
By reviewing distributors ’ fuel buying arrangements , Mark has already helped several companies with recommendations that enable them to get to the next stage by training teams and setting up management tools to deal with buying .
How important is it for a fuel distributor to stay ahead of the competition ? Absolutely vital in a mature market !
• Customer service – businesses providing the best levels of service will succeed
• Costs – the most cost-effective distributors will survive ; weaker ones will fold or be taken over
• Smaller distributors can offer a level of personal service that larger ones will always struggle to deliver Fuel buying should be run as a separate function . With fuel supply often sorted out later in the working day once orders are in and vehicles are routed , the best buying opportunities can be missed .
Systems can restrict the value that fuel buying can add – a good fuel purchase gets priced straight out with cheaper prices for the customer who gets the benefit straight away .
Choosing to run fuel buying as a separate activity , with the aim of saving or making money , will put you ahead of the competition .
In today ’ s market what makes the use of an increasing range of supplier options advantageous ? It ’ s been a long time since suppliers simply issued a list price at the beginning of the day and all the distributor had to do was to add on their margin and take the orders !
Around 10 years ago trading companies such as Mabanaft , Greenergy and World Fuel Services brought live prices to the market , giving new supply options to most of the UK . Now almost every major supplier offers both day and live prices as well as many other options . This can be a bewildering choice for the fuel buyer who really needs to know what is the best choice to make for supply every day .
I have seen many distributors generate savings and make more money by running their fuel buying differently . The trick is to do this quickly and efficiently , sorting out supplier prices to compare apples with apples more easily and to make the best supply decisions for the business .
What areas of opportunity can you offer with respect to making specific improvements with contracts , prices and processes ?
• Making use of an increasing range of supplier options
• Best ways to work with daily market dynamics
• Managing price volatility to your advantage
• Managing risk managed sales profitably
• Using supply to create customer and pricing options
• Using risk management tools to create business advantage
• Management of supplier price information
• Buying ahead but without the risk of losing money when prices fall
As a consultant how do you keep up with an ever-changing market ? Being an independent consultant makes it easier to keep up with the market . It ’ s essential for me to find out what is going on with the market and prices every day . I talk regularly with suppliers and distributors and attend trade shows and conferences to pick up on major trends and developments both nationally and internationally . www . graftonridge . com
What the fuel oil distributor needs in 2018
For the latest news and innovations relating to the products & services used by those operating in the fuel oil distribution industry , see the April 2018 issue of Fuel Oil News which will be published in early April .
Fuel Oil News | March 2018 15