SIGMA Spring Conference 2022 was a special conference filled with awesome weather, great events, and fresh optimism across the fuel marketing landscape. The Gravitate team picked up key insights from the Sigma community—featuring a range of refiners, wholesalers, c-stores and supplier partners—and are thrilled to share with you below:
- Volatility: In the first 4 months of 2022, the average NYMEX heating oil day-over-day price change was 11.3 cents. In the preceding 4 months, it was 3.2 cents. War in Russia and the end of COVID-19 lockdowns have sparked an extremely volatile refined fuels market. This volatility was starting to become a daily nuisance for fuel supply managers and a boon for some refiners and wholesalers. Arbitrage opportunities have also become more prevalent, presenting opportunities to optimize between supply options across different terminals within a market or through long-distance arbs. The only limit to this type of supply optimization is the expertise and capacity of supply managers and drivers.
Where is my fuel? The biggest challenge faced by fuel retailers and fuel carriers is allocations (or lack thereof). Fuel retailers need to match growing demand with allocations that were calculated based on historical liftings. Carriers are at the coalface, arriving at terminals only to find that allocations are out. This lack of integration between suppliers, fuel retailers and carriers is driving a growing ecosystem of technologies like Gravitate, Velostics, and Trufill to fill the void and create smarter supply decisions, more integration with carriers, and streamlined processes for drivers.
Mojitos! The Mojito is the cocktail of choice in Miami. Whether in South Beach or Little Havana, the soft mint leaves and fresh Cuban rum make for a sensational combo.
When will the music stop? Fuel retailers have had record years, with high margins and strong inside sales, despite subdued fuel volumes. With recession fears mounting, fuel retailers are planning for the return of harder times. When fuel margins are strong, it is easy to fall into a false sense of security - thinking that profitability results from internal processes, when macro factors largely drive margins. Fuel retailers and wholesalers are looking for tools to help them reduce the need for headcount growth, make smarter decisions, and memorialize knowledge.
Labor shortages: How long does it take to train a new supply analyst or dispatcher to understand market dynamics, identify arbs, optimize load timing and communicate effectively with dispatch? Months, if you’re lucky. Likely, years. Fuel marketers are faced with labor shortages across drivers, dispatchers, analysts and IT. With the labor market as tight as it is right now, many are opting to boost the salaries of their core staff and waiting to fill new positions until the labor market becomes more reasonable. This results in fatigue from core team members who have taken on new responsibilities. Hence, the mojitos!
