Opinion: 5 Qualities of a Great Commercial Fuel Supplier

FRAMINGHAM, Mass. -- The future has never looked brighter for a well-structured and well-positioned commercial fueling company.

There is abundant fuel supply, reasonable prices and increasing demand as more retailers are relying on internet sales while desiring to control their own freight and distribution. Ten years ago, online sales were less than 3%. We will exceed 12% this holiday season. And if you remove convenience and groceries, which are still site-dependent, from the mix, we could see 25% of durable and discretionary purchases internet-based and thus dependent on commercial transportation. 

While climate change will not be at the top of a Trump agenda, neither clean and alternative-fuel interests, nor the Environmental Protection Agency, have gone away. Complexity and fuel optionality will remain. With transportation and logistics representing two-thirds of the final cost at point of consumption, the concern for cost management will accelerate.

With that in mind, here are the top five attributes of an excellent commercial fuel supplier.

A good commercial fuel supplier would have the ability to source fuel from multiple terminal and wholesale locations, as well as hold and manage inventory.

The ability to lock in prices with full hedging and risk-management capabilities, including various contract types and term structures, is a key requirement.

For shippers looking for on-road options and information management, a fuel supplier offering a retail card network is valuable.

For those shippers using subterminals and central warehouse dispatch, look for a supplier's ability to supply and manage on-site hub fueling facilities. 

An ability to address concerns surrounding carbon-dioxide emissions through clean fuels or carbon offsets is also important. One way is through using natural-gas vehicles (NGVs), which produce 25% less greenhouse gases than petroleum vehicles. An NGV’s operating costs are about 7 cents per mile vs. 15 cents per mile for a petroleum vehicle. At 60,000 to 100,000 miles per year depending on the firm and type of truck, that is almost $8,000 in savings per vehicle per year. 

Hydrogen may offer even greater savings, and it produces almost no greenhouse gases.

Wal-Mart has 6,000 trucks. Amazon, whose shipping costs as a percentage of its total revenue have risen each of the past 10 years, has announced it intends to eventually run a fleet of approximately 10,000 trucks. A commercial firm focused on bringing cost mitigation and environmental stewardship will be a dominant player in this $143 billion industry.