In Part 1 of the Business Case for 4PL we covered the first challenge procurement teams for fuel buyers run into, which is the pre-contract phase. Let’s drive that point home by diving into a quick case study that I actually had first-hand involvement in.
I was sitting at my desk on an otherwise ordinary Wednesday looking at a fuel contract and an invoice on behalf of a new customer. Something didn’t make sense. I proceeded to look at another invoice, then another, and then another. I had finally looked at a years’ worth of invoices and the brutal truth set in… something was wrong, and it had been wrong for over a year. My next move was to call the supplier who was providing fuel and transportation services. We talked for over 15 minutes before I had fenced him into admitting what was become increasingly clear: He was charging the fuel buyer inaccurately on every single delivery! What’s worse is when I pressed him further as to how and why this could’ve happened, his answer was “Well, It was close enough”. Close enough! Close enough has no place in a fuel contract much less a fuel invoice.
Here’s an analogy that will drive the point home even further. Let’s pretend you told your Financial advisor at the age of 30 that you wanted to retire at 65 with two million. You then proceed to follow the financial advisor’s advice of sacrificing from your paycheck, investing in identified instruments, delaying vacations, etc. You check in with that advisor regularly every quarter and are told you are absolutely on track to meet your goal. This goes on for 35 years. When you finally retire and arrive at the advisor’s office to get your two million, you are presented your retirement in full, but in denominations of Iranian Rial. Incredulous and confused, you look at your financial advisor who is shrugging his shoulders like Michael Jordan against the Trail Blazers in ’92. As you sob in disbelief, the financial advisor pulls out the 35-year-old paperwork you signed where you told him exactly what you wanted. You are sadly left with the equivalent of $50 USD at 65 years of age and it is because you didn’t know what to ask for, how to validate you are getting what you asked, and how to hold your third-party advisor accountable.
While my analogy is fictitious, the case study is not. In both instances, when there is a gap in expertise, sub-optimal systems, and either a lack of or inadequacy of checks and balance, your business is left exposed. Most suppliers and transportation companies are honest and will give you exactly what you ask for. Do you know what to ask for – when, and how to validate it? When one fuel invoice can be upwards of $15,000, can you afford the repercussions of “close enough”?
FuelHub is a 4PL service based out of Houston, TX that optimizes the downstream fuel supply chain for fuel buyers. We take on the complexity and save you money so you can focus on getting back to your business. Learn more by contacting us for a free consultation: 1.833.FUELHUB or info@fuelhubservices.com .
