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.
These
were just some of the many findings of the survey.
Contributed by:
Elmarie Ollewagen, Cargo Carriers
