One of the largest elements of operational expenses in the freight hauling business is fuel, and yet, there are a limited number of fleets that actively manage this cost effectively. Wisconsin-based Breakthrough Fuel is providing a way to effectively manage energy and reduce costs – with both the consumption and emissions associated with freight movement.
“A major chunk of the transportation cost for fleets is fuel. It also is the single largest unmanaged cost in the industry,” says Craig Dickman, CEO and founder of Breakthrough Fuel.
“Having been in the industry for a little over 30 years now, I see that fuel is being dealt from a financial standpoint that is in a way disconnected from the freight movement itself. The fuel surcharge system that is based on the Department of Energy (DoE) Index does not reflect the true cost of taking goods to market,” explains Dickman.
“Energy is one of the most important elements in the industry which keeps coming into prominence because of its increase in volatility and also the rising emissions concerns.”
Dickman’s view of the system stems from his experiences of being associated with carriers and shippers. In his 11 years working with small and large fleet companies, he could see distinct differences in the way smaller fleets approached the energy equation compared to larger carriers. “I realized that if I could look at energy both holistically and with more transparent data, I could provide valuable insights to companies,” he says.
The key to Breakthrough Fuel’s success is it being the thought leader in the fuel management space, believes Dickman. “We build credibility by creating a platform and providing transparency to the marketplace. So from a competitive standpoint, it is important for us to keep accelerating on our ideas and also keep delivering new services to the industry,” notes Dickman.
Breakthrough Fuel relies heavily on continued refinement of its solution to stay ahead of its competition. The initial concept was simple – it was about helping people to make informed decisions with regard to fuel purchasing, with a clear visibility of excise tax through a platform that operates in real-time.
Over the years, the solution has evolved to serve clients in niche segments. For example, the company creates solutions for customers who move temperature protected freight. “This is needed because the fuel economics and its efficiency behind running a reefer versus a truck are different,” notes Dickman.
“We want to embed additional knowledge into our solution to make sure we can be both precise as necessary for understanding the economics, but also aggressive enough in creating new initiatives for managing emissions better,” he adds.
But the journey of Breakthrough Fuel has not been without hiccups. “One of the few things that hold true for any organization looking to disrupt a marketplace is it receiving a certain degree of opposition,” says Dickman. “When you are looking to bring transparency to an industry where certain parties benefit from the lack of it, there is opposition. So in the early phase, it was about educating the people on the technology and proving the product’s value to them.”
Having come a long way from there, the company now adopts an open innovation process which includes co-innovation initiatives with existing clients. “The reefer solution we provide now was largely done with a co-innovation model, where our clients had an interest in solving the problem. They partnered with us for our technical expertise, and we built a solution around it.”
Breakthrough Fuel also has an active client workspace, where it introduces new ideas and initiatives it plans to work on in the future. Based on initial feedback from the clients, the company decides on its future course of action. Ideas with lukewarm responses are killed quickly, which improves efficiency within the organization.
One of the challenges that the company faces is to stay informed of the regulatory changes that take place frequently in the industry. “Understanding fuel tax changes and shifts in traditional excise taxes is important to us,” adds Dickman.
“People are also looking for new ways to procure and move freight around – be it digital freight matching or solutions through blockchain. It all comes down to realizing the need to accelerate our processes to stay relevant and to provide value to the supply chain.”
Breakthrough Fuel is present in 47 countries at the moment and has a heavy presence in the North American market. “We also work all across Europe, South America, and the Asia Pacific markets. The real reason is that energy is a global commodity and thus, it is possible to have a global strategy,” concludes Dickman. “The industry will continue to be disrupted, and we will keep exploring the changes to accelerate innovation in the transportation energy sector.”
Stay up-to-date with the latest commentary and insights on FreightTech and the impact to the markets by subscribing.
