If your drivers are making the right number of deliveries per day & they're working the right number of hours per day, & you're dispatching to optimize based on the data you have, your trucks should come back close to empty. But they aren’t!
Basis Risks are Here to Stay... For the past 30 years companies have been offering pricing programs (fixed and capped), to give their customers peace-of-mind, maximize company sales margins, and minimize customer attrition.
When working on improving your cash flow, there are three key steps to take to make large and lasting changes. Each step can be broken down into concrete actions that you can take starting right now.
A year ago, there was a lot of relief to be finally leaving perhaps the darkest times we have seen in our lives. Leaving that in the rearview mirror was exactly what we needed. We ended 2021 with a sense of relief and a sense of excitement. The world wouldn’t be the same, but great things were ahead in our new reality.
Weather hedging (for fuel dealers) can best be described as a method to recoup some level of the lost fuel delivery and service profitability that otherwise would have been earned in a warmer than normal winter. They are financial derivative tools designed to counter that hackneyed refrain of helplessness we so often hear: “Hey, we can’t control the weather.”
In any business, in any industry, the “3 legs” that are required to support a business are Sales, Operations, and Finance. Sales can include sales, marketing, customer support and retention, data analytics, social media, etc. Operations includes “everything you do” to serve your customers. In our industry, it is primarily delivery of fuels and the installation and servicing of heating and cooling equipment. Finance includes everything from budgeting, analyzing, reporting, banking, credit, hedging, and more.
Imagine you have a job opening for a position covering the followinf responsibilities: Pull data from BOS, budget, etc., create automated custom reports fshowing customer gain/losses, budget variances, delivery history, and performance, service data, analyze customer data for outliers, coordinate with dispatch team and BOS for "smarter" deliveries...
Many factors are conspiring to squeeze you this winter and the impact could be significant. The good news is that owners and managers have time to plan before the chilly days return and your need for cash to support seasonal operations grows again.
As retail prices increase, customers who are on pricing programs are shielded from price spikes. Sure, it costs money to be on a cap program, and you might have to be on a budget plan AND have a service contract. But the savings… Caps are intended to protect customers from price increases and allow them to benefit if prices fall. It does come with a cost (the costs to hedge the cap), but those costs are an investment that can yield fantastic results! Dealers who offer caps and hedge them (properly) meet their profit goals and earn a good...
Is a “steady basis” a thing of the past? Will it return to normal? When might it happen? What if my supplier doesn’t offer me a fixed diff? What if I don’t want one? All of these questions are “top of the mind” as we plan for next winter.
