Swift Transportation will enhance its ability to manage fuel costs through the “stability provided by The Shipper Solution,” says Simons Petroleum. The national marketer of petroleum products suggests this will enable Swift customers to budget transportation expenses more accurately.
“This solution provides a strategic means of proactively managing fuel costs and enhancing our business partner role with our customers,” said Brad Stewart, director of finance at Swift Transportation. “For our customers, it provides the ability to control budgets, remove fuel price volatility from their transportation costs, and better predict margins in a highly competitive business environment.”
Swift Transportation Co. claims to operate the largest fleet of truckload carrier equipment in the United States consisting of approximately 16,700 tractors and 49,300 trailers. Operating from 35 major terminals located across the United States and Mexico, Swift also provides regional operations. It has an expanding intermodal division, and various specialty and dedicated services.
According to Simons Petrolium, “The Shipper Solution” Swift is using employs one of the two most common fuel surcharge strategies to remove fuel price volatility from transportation costs: A Fixed Rate Fuel Surcharge which provides a set price for an agreed-upon period at an agreed-upon volume. This rate does not change during the term, allowing for price certainty.
A Capped Rate Fuel Surcharge, offered at a premium, provides total upside protection as well as downside participation. Should prices fall, this allows for a reduced rate during the agreed upon period.