Fuel Management

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Moving Iowa ForwardFuel Management


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Jacobson Overview

Click to edit Master title styleProud History of Expansion


2010 Launch International Logistics Services (ILS)

1985 1990 1995 20001968 1980

1968 Opened 1st warehouse

2002 Opened first LMC outside of Des Moines & renewed focus on growing Carrier services

2004 Acquired by Norwest Equity Partners and management

2005 Acquired Bekins Logistics

2006 Acquired Phoenix-based Southwest Storage & Distribution

2006 Acquired Atlanta-based Wilpak, Inc

2006 Acquired St. Louis-based The Arthur Wells Group

2006 Oak Hill Acquired Arnold Logistics

2007 Acquired by Oak Hill & combined with Arnold Logistics

2008 Acquired Louisville-based Dixie Warehouse Services

2009 Brian Lutt joins as CEO. Restructure organization (CLS/TLS)

Over our 43-year history, Jacobson has evolved from a small warehouse-based company into one of the largest fully integrated logistics providers in the US

2006 2007 2008 20092002 2004 2010

2010 Acquires Global Transportation Services Inc.

2011 January - Establish legal entity Jacobson Global Logistics, Ltd in Hong Kong

3www.jacobsonco.com

2011 January - Acquire Hong Kong based Chimerica Global Logistics, Ltd (CGL)

2011 February – Strategic Partnership formed with European company Rhenus Logistics

2011

2011 August – Acquire Singapore based G-Link Express Logistics

http://www.epa.gov/smartway/index.htm


1st Warehouse operation opened in 1968

Corporate Headquarters – Des Moines, Iowa

“Top 3” U.S. 3PL Managing 35 Million SF

197 sites serving over 1,500 customers

ISO 14001:2004 Certified

Asset Light U.S. Domestic Transportation and Freight Management business

545+ Tractors and 1,930+ Trailers

$600 Million in freight under management

Jacobson Today


Service Profile by Revenue

Industry Vertical by Revenue

Click to edit Master title styleEnd-to-End Supply Chain Solutions


Warehousing & Order Fulfillment (Dedicated and Multi-Tenant) Secondary Packaging & Project Management Contract Manufacturing Reverse Logistics Short/Long Term Staffing Solutions Facility Network Design & Planning Manufacturing Support High technology WMS solutions - Tier 1 WMS & ERP

Ocean & Airfreight Forwarding Consolidation at Origin Customs House Brokerage Deconsolidation & Trans loading Sea/Air Programs International & Domestic Warehousing, Transportation & Packaging Project Cargo Services Tracking &Tracing Tools

Full Truck Load Capacity Mgmt Cross-Dock/Freight Consolidation Over–the–Road Solutions Dedicated Contract Carriage Freight Management Mode Optimization Freight Bill Audit & Payment Transportation Management System (LINCS™)

International Logistics

Transportation Logistics

Contract Logistics

Click to edit Master title styleJacobson Locations


International Logistics Services

Contract LogisticsServices

Transportation LogisticsServices

Offices

Jacobson/Rhenus

Partners/Agencies

Dedicated OperationsBulk Dedicated OperationsCross Dock OperationsLoad Management Centers

Dedicated Distribution Ctrs Multi-Tenant Distribution Ctrs



Fuel Impact

Click to edit Master title styleFuel History


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Weekly US Diesel Retail Prices

Source: U.S. Energy Information Administration

The Department of Energy projects diesel will average $4.21/gallon this summer, staying above $4.00 into 2013.

Click to edit Master title styleHow far on $500?


March, 1999$0.997/gallon

March, 2012$4.127/gallon

February, 2005$2.027/gallon

April, 2003$1.533/gallon

May, 2010$3.069/gallon

Assuming 6 MPG


$2.00 $2.50 $3.00 $3.50 $3.75 $4.00 $4.25

Fuel Expense Fuel Recovery

$/Gallon

$

Operating Expenses


Fuel

2011

Fuel

2006

While a fuel surcharge or fuel peg adjustment provides some relief, there remains a gap that widens as fuel prices continue to escalate.

Increased expense continues to be spread across the supply chain.

Unprotected fuel expense



Fuel Management Strategy


Purchasing Focus Bulk fuel Price negotiations Fuel optimizer Purchasing discipline (are drivers

fueling at ‘network’ stops?) Purchase timing Hedging

Consumption Focus Improve MPG

Equipment Maintenance Driver

Reduce empty miles Reduce out-of-route miles

Recruit ‘in network’ drivers Training

Immediate and Ongoing



Process & Partnership Reduce unproductive miles

(company trucks, owner operators, partner carriers)

Route optimization– Fewer miles– Continuous move opportunities

Shipment consolidation and distribution

– Reduce the amount of ‘air’ being transported

Network evaluation Getting closer to customers and

suppliers– Sourcing alternatives– Mode shift– Freight terms

Alternative Fuel Sources Natural Gas

Compressed natural gas Liquefied natural gas

Liquefied Petroleum Gas (Propane)

Biodiesel Ethanol

Strategic


Source: U.S. Department of Energy



Questions?



Appendix

Click to edit Master title styleFuel Optimizer


Origin: Des Moines, IA Destination: Los Angeles, CA Miles: 1,775

Fuel Level: 100 gallons Tank Capacity: 240 gallons MPG: 6.2 mpg

Pump Effective Pump EffectiveCity St Price Cost Gallons City St Price Cost Gallons

DES MOINES IA $3.760 $3.535 140 MILAN NM $3.929 $3.719 0

KEARNEY MO $3.705 $3.535 0 GALLUP NM $3.919 $3.709 0

N KANSAS CITY MO $3.821 $3.651 0 JAMESTOWN NM $3.941 $3.731 0

OTTAWA KS $3.834 $3.574 0 JOSEPH CITY AZ $3.913 $3.653 0

BETO JUNCTION KS $4.019 $3.759 0 WINSLOW AZ $3.924 $3.664 0

EMPORIA KS $3.843 $3.583 0 BELLEMONT AZ $3.903 $3.643 0

HOOKER OK $3.797 $3.667 0 KINGMAN AZ $3.858 $3.598 165

TUCUMCARI NM $3.875 $3.665 69 KINGMAN AZ $3.913 $3.653 0

SANTA ROSA NM $3.946 $3.736 0 LAKE HAVASU CITY AZ $3.930 $3.670 0

MORIARTY NM $3.956 $3.746 0 BARSTOW CA $4.090 $3.743 0

ALBUQUERQUE NM $3.917 $3.707 0 ONTARIO CA $4.051 $3.704 0

Click to edit Master title styleTiming Fuel Purchases


Location: Marion, IN Price Change = Tomorrow’s Price – Today’s Price If Price Change <= ($0.020) then Fuel Tomorrow

Timing: ~ 13:00 CST If Price Change >= $0.020 then Fuel Today

JTLS Price FuelDate Price Change Recommendation

12/13/2011 $3.312 ($0.023) Fuel Tomorrow - Prices will be 2.3 cents lower

12/14/2011 $3.289 $0.020 Fuel Today - Prices will be 2.0 cents higher


12/16/2011 $3.227 $0.000 N/A

12/17/2011 $3.227 ($0.013) N/A

12/18/2011 $3.215 $0.000 N/A

12/19/2011 $3.215 $0.000 N/A




12/23/2011 $3.281

Click to edit Master title styleFuel Consumption Example


Annual Miles 30,000,000MPG 6.00Gallons 5,000,000Fuel price $4.210Raw Fuel Cost $21,050,000

Percentage MilesOOR 9.50% 2,850,000Non-OOR 27,150,000MT 12.50% 3,393,750Loaded 87.50% 23,756,250

Fuel Surcharge Rate $0.50Fuel Surcharge Revenue $11,878,125

Net Fuel Cost $9,171,875Fuel Cost/Mile $0.306

CO2 Emissions 50,420 metric tons

Annual Miles 30,000,000MPG 6.10Gallons 4,918,033Fuel price $4.210Raw Fuel Cost $20,704,918

Percentage MilesOOR 9.00% 2,700,000Non-OOR 27,300,000MT 12.00% 3,276,000Loaded 88.00% 24,024,000

Fuel Surcharge Rate $0.50Fuel Surcharge Revenue $12,012,000

Net Fuel Cost $8,692,918Fuel Cost/Mile $0.290

CO2 Emissions 49,593 metric tons

Reduction to net fuel cost of $479,000

Fuel Management

Business

Transcript of Fuel Management