Swift chooses Simons’ Shipper Solution

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Simons Petroleum Inc., a national marketer of petroleum products focused on providing comprehensive fuel and lubricant offerings, announced that Swift Transportation Co. Inc. is using The Shipper Solution to manage fuel costs and enable its customers to more accurately budget transportation expenses.

“The stability provided by The Shipper Solution from Simons Petroleum resonates with many of our customers, especially in today’s economy where thin margins do not allow them to absorb volatility in fuel costs,” says Brad Stewart, director of finance at Swift Transportation, based in Phoenix. “This solution provides a strategic means of proactively managing fuel costs and enhancing our business partner role with our customers. 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.”

Simons says The Shipper Solution being utilized by Swift employs one of the two most common fuel surcharge strategies to remove fuel price volatility from transportation costs:

  • A Fixed Rate Fuel Surcharge provides a set price for an agreed-upon period at an agreed-upon volume. This rate does not change during the term, allowing for complete price certainty; and
  • 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.
  • “The Shipper Solution provides a competitive advantage for carriers like Swift, especially when low freight demand is causing many shippers to shop more heavily based on price and engage in fuel surcharge renegotiations,” says Brad Simons, senior vice president of Simons Petroleum, based in Oklahoma City. “This customized strategy helps build or maintain shipper relationships, and meets the needs of shippers who are also facing competitive pressures by allowing them to more effectively manage their transportation budgets.”