For those in the know, the largest event in the environmental and waste/refuse sector–WasteExpo– is going on this week in New Orleans. It is by far the largest gathering of companies in this sector each year. I was fortunate enough to present to leaders in the waste industry today about one of those primary expenses that can really eat at the bottom line, fuel for the fleet.

To the layperson, fuel is not always the most exciting thing to talk about, but when you are a fleet-based company, it is typically the largest expense after head count. So, given the pure financial impact, it commands attention and scrutiny! That being said, one of the most discussed topics this year is fuel price volatility.

The volatility that we have seen in the market since 2004 continues (with no signs of stopping). When you have a daily movement of 3 cents or more happening nearly 50% of the time, something has to be done to lessen its effects. Luckily, there are ways that companies can combat these movements, given a good plan and the technology to execute it. When you manage your fuel effectively, you can use this volatility to your advantage and not be caught on the wrong side of a 10 cent price swing – which can translate to $800 for a single load.

One of the other hot topics this year is invoicing. Given recent events in the news about fuel invoices, it’s not surprising that this audience is talking about how to ensure that the invoices they are paying are correct.

To underscore this, when we bring on a new client, we review past invoices as part of our benchmarking service, and have seen invoice inaccuracies up to 25%. When you are talking about an invoice to the tune of $20,000 to $25,000, it pays to check each one thoroughly. However, if you don’t have technology to help, this can eat up a lot of hours and the tendency will be to not scrutinize them. This is definitely not something that you want to do since even a variance of 1% of the typical fuel invoice is $200-$250, and these can quickly add up.

At the heart of this issue is the fact that fuel invoicing can be a real challenge–with the types of fuels available, contracts that pricing is tied to, the index the price is based on, and changing fuel tax rates, there are many details to manage and reconcile. We have even seen examples of customers receiving invoices from suppliers that were meant for other customers. Mistakes happen, but a $25,000 mistake can really ruin your day. To put it another way, you would hate to have all of your strategic effort around managing fuel volatility and efforts to optimize usage possibly be lost due to a single invoicing error.

Last week, FuelQuest held its 9th annual GRAIL conference in San Diego. Excitement was high as representatives from companies across North America travelled to the industry event. GRAIL attendees heard presentations from noted economist Dr. Philip K. Verleger of PKVerleger and Greg Scott, SVP Supply Operations, from Cumberland Gulf Group. An industry panel discussion followed which included Paul Stone, formerly of Shell International and an independent director for FuelQuest and was moderated by Matt Tormollen, FuelQuest President and CEO.

After hearing similar messages from both Verleger and Scott on the future outlook of the retail fuel market, one thing that stuck in my mind was the importance of carriers and fuel suppliers working with retailers and fleets to help each remain competitive to combat not only fuel volatility but non-traditional competitors. Although each approached it from a different angle, one thing that they both focused on was the changing market dynamics for fuel retailers and that adaptation will be necessary for retailers to survive alongside declining gasoline consumption, competition from big-box retailers and other non-traditional competitors.

Specifically, Greg Scott stressed that retailers will need to embrace alternative fuel offerings as well as revamp beverage and fresh food offerings to continue to drive customer loyalty – the “same old tired salty snacks just won’t cut it” and “fresh, good tasting food service” is a necessity.

The other side of this future state and something that retailers have been combating since 2004 is fuel volatility. Combating volatility requires both retailers and suppliers to work together and be nimble to take advantage of the opportunities that volatility presents. Companies and suppliers who support load shifting tactics with good performance and accurate billing will help retailers and fleets remain successful and become trusted partners.

Highlighting this need, the 2nd annual FuelQuest Q Awards brought it into focus this year as two of the winners led their respective categories in load shifting, with the third leading the pack in invoicing accuracy. These trusted partners delivered accurately and dependably throughout the previous year to help make FuelQuest customers successful in their respective businesses.

So congratulations to Falcon Fuels (for delivered supplier of the year), Pro Petroleum (for carrier of the year for the 2nd year in a row), and U.S. Oil and Refining (FOB rack supplier of the year)!

Wrapping up another exciting GRAIL conference, we can now look forward to next year’s event in Nashville in 2014!

FuelQuest’s 9th annual GRAIL conference has concluded, attracting hundreds of FuelQuest users, partners, customers, and industry thought leaders. Our time in San Diego was marked with a number of sessions offering a selection of in-depth, diverse, and solution-focused topics – in addition to wonderful restaurants in the nearby Gaslamp District. With multiple late night dining options nearby, coffee was in high-demand at the GRAIL conference, and it struck me when a speaker shared an anecdote relating a cup of coffee to the current gap in tax revenue caring for our nation’s infrastructure.

In his presentation at GRAIL, Rich Little, Senior Manager, with Deloitte Tax LLP indicated that consumers’ buying habits continue to erode state tax revenue as we move towards more efficient vehicles and less-expensive alternative fuels. States are scrambling to find new ways of increasing tax revenue to rebuild their coffers for upkeep of deteriorating roads. “If everyone in America gave up one cup of coffee that would repave all the roads in the country,” he stated. While this may or may not be 100% accurate, in my mind it illustrates two things:

1. The current gap in our tax revenue infrastructure has widened to point where it is now everyone’s problem.
2. The amount of sacrifice needed to overcome this gap is minimal, when distributed across all users.

The types of solutions available are many and each state has its own challenges and ideas on how to overcome their deficit. But as this industry is well aware, complex and changing fuel tax laws will continue, and savvy retailers in attendance at GRAIL have turned to automation for their tax determination and filing processes.

What are your thoughts? Feel free to share your comments below.

Earlier this month, FuelQuest hosted a webinar to discuss the advantages of automating motor fuel excise tax determination. An attendee asked that very question, ‘What is business agility’. It got me thinking this is more than a buzzword; this was about what that concept means for an organization that has to deal with motor fuels excise taxes in multiple states or jurisdictions. What happens when that business expands and moves into a new state and finds themselves on the hook for filing and reporting with different tax rates and rules?

One thing is certain; a business must be able to react quickly. In 2012 alone the U.S. had 431 motor fuel tax law changes, a whopping increase of 30.4% from the prior year! Keeping up with and staffing for this multitude of changes is no easy feat. Companies struggle to keep pace with these constant adjustments, spending precious IT and accounting department time and resources. In addition, managing these changes is often the least of their worries. Tax related errors and the activities associated with fixing them often pull high-value resources from various departments attempting to minimize customer facing and financial impacts.

In an effort to manage this process, many companies have developed in-house tax determination solutions. These organizations often find after the fact, these ‘home-grown’ solutions didn’t meet their requirements for business agility (or the ability to make changes as needs dictate, such as adding tax information for a new state), tax transparency (the ability to easily understand the tax calculation process), and accurate tax calculations. Of course, accuracy in these tax calculations is paramount as an incorrect calculation causes all kinds of problems, including the potential for fines.

What we are finding is many organizations are now realizing that to be agile they need to move to an automated tax solution for their tax calculation process. Making this move can be confusing and difficult especially when resources have been sunk into creating the existing system. Understanding the value of an automated solution and what it would mean to the organization is tough too, but luckily there are solutions in the market that can give companies that agility and peace of mind.

The Fueling Business tax determination webinar was a success based on the feedback FuelQuest received. We thank all those that were able to participate. However, I know there are other questions out there so I encourage you if you haven’t already, to view the recorded webinar and let us know if your business is one that desires business agility. For advance notification of upcoming webinars, drop us a quick note on our Contact Us page, or follow us on Twitter, Facebook or LinkedIn.