Getting large volumes of fuel from A to B isn’t easy. The stakes are high and the margin for error is tiny.
With time, money and potentially lives on the line, industry leaders give careful thought to their choice of fuel transporter – as shown in the results of a recent survey commissioned by Cargo Carriers, into the needs of buyers of fuel transportation.
So, what do customers look for when deciding upon a provider?
Respondents were senior managers across multiple industries. Some of the industries from which respondents were drawn included: energy, manufacturing, mining, chemicals and construction.
Not all the findings were to be expected.
One of the criteria rated was prospective fuel transporters BBBEE and black ownership status. The research suggests that the market no longer views these as key differentiators. The indication is that buyers of fuel transportation now see these indicators of transformation as non-negotiables. They require these needs to be satisfied, but are now looking beyond them to other factors to differentiate one supplier from another.
So what are the new differentiators in this market? And what new insights did the research reveal?
Respondents rated cost competitiveness more important than lowest prices. The former scored 6,06 out of a possible 7, while the latter was rated at 5,41 – evidence of the market’s intuitive understanding of the axiom: you get what you pay for. And, that a decision made on price alone could be penny-wise and pound foolish. Customers are prepared to pay to reduce risk and to increase service.
Operational excellence and efficiency was ranked as the single most important attribute for fuel transporters – scoring 6,19. This catch-all trait shows that customers place a high value on a professional service – one which effectively allows them to confidently delegate the responsibility of fuel transport. In a modern day world where just in time, and safety and risk are important, high levels of service are critical differentiators.
Listed as a separate, but closely related, attribute was the quality of: having industry leading SHEQ (safety, health, environmental and quality) standards. Fuel transport customers clearly realise the huge risks associated with compromising on SHEQ standards. Such risks go beyond the obvious negative consequences of injury or death. They extend into the less serious, but more probable, arena of the risk of reputational damage.
The characteristic of having technology to mitigate underloading, theft and other losses came second in the order of importance (scoring 6,16). Underloading and theft have always been a concern with fuel transport. This is still the case. As the price of fuel rises, so does the value of a payload, with the largest fuel tankers now carrying R0.5m of fuel when full.
The technology to mitigate this loss is extremely expensive, so many transporters do not install it, but amortised over many loads and many litres, it is still likely to be lower than the cost of fraud and theft. Transport buyers should be aware of the real cost of not using a transporter with this technology.
The provision of real time tracking and tracing (and visibility and communications) scored 5,81 which seems to indicate that in this age of technological advancement making use of benefit-providing technology is becoming increasingly relevant, and has application for safety, inventory optimisation and control.
One of the most interesting findings was the increasing importance of transporters having programs to uplift local communities in which they operate. This was particularly important for respondents from energy and mining industries. Clearly localisation is a hot issue for the mining community, and all suppliers are under pressure to contribute. Transporters who are able to go the extra mile in this regard will have a significant advantage.
The aforementioned were just some of the many findings of the survey.