Daily Archives: November 1, 2011

Halloween Sponsorship Special

The rest of 2011 FREE for any new sponsor who signs up for all of 2012 (at published rates) until all slots are full.
If you’re interested, and have the authority to contract on behalf on behalf of your organization, send an e-mail to thedoctor < at > sourcinginnovation < dot > com within 48 hours*. (By 1:00 pm CT on Wednesday, Nov 2.)

For sponsorship details, click the Sponsorship Information link. (And no, the doctor is not making a PowerPoint available. He refuses to submit to the enemy that is PowerPoint.)

As always, sponsorships are first come, first serve.

* You do not have to sign within 48 hours, just express interest. You will be granted extra time to get the paperwork done.

Why Are Fuel Prices So Volatile?

This recent article over on the Supply & Demand Chain Executive Site by Barry Hochfelder on a volatile problem does a great job of sketching out the fuel supply chain and explaining why prices will sometimes change five to ten times a day!

At a high level, this is how a fuel supply chain works.

  1. The refiner receives oil and produces gas, diesel, and petroleum fuel products.
  2. Traders then buy and sell the fuel.
  3. Fuel is moved via pipelines, barges, and tankers to supplier storage tanks.
  4. Distributors transport the fuel to retailers or consumers.

So where’s the volatility?

  1. There are buyers, sellers and intermediaries between the pipelines.
    Furthermore, there are many suppliers at different terminals in the geographic locations where pipelines terminate into bulk storage. These suppliers advertise prices at their terminals. If they see a change, they will often move prices to their advantage.
  2. Then there are contracts.
    Buyers will procure fuel based on midday close and other complex calculations.
  3. And suppliers offer multiple price feeds to try and win contracts.
    With prices that change based on time of day, contracting terms, and calculation methodologies.
  4. Taxes are constantly changing.
    There have been over 1,800 changes in tax rates at the local, state, and federal levels.

And this volatility is not going away. Time to start preparing.