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FPA's experience and understanding of the fuels market proved to be invalulable when undertaking a review of our purchasing methods.

 

Ben Donald, Group Procurement Manager, Associated British Ports

CASE STUDY : Associated British Ports

FUEL HEALTH CHECK

Associated British Ports (ABP) is the UK's leading ports group handling every conceivable type of cargo. It owns and operates 21 ports in England, Scotland, and Wales, and handles approximately a quarter of the country's seaborne trade.  

ABP were seeking to ensure they were procuring their fuel requirements in the most cost effective way and engaged us to assist them with this exercise. 

Health Check Objectives

  • To produce an independent ‘As-is’ picture of their fuel procurement practices.
  • To review each sites purchasing methods and operational requirements including delivery frequencies, storage restrictions and pricing.
  • Highlight any potential areas for improvement to minimise their fuel spend.

Current Position

The wide geographical spread of Ports/Businesses within the ABP group meant that there was a high dependency on local suppliers to service its fuelling requirements and typically this was undertaken on a “spot” purchase basis.  The relatively low demand at some Ports/Businesses, in particular, at its Short Sea Ports, combined with restrictions on storage/tank capacity and the resultant need for a high number of small delivery drops also presented a logistics challenge.

Our Approach

We undertook a complete review of ABP’s existing fuel purchasing practices and supply requirements. The process of data gathering was supported by a specially developed questionnaire and a series of meetings with key personnel within the respective businesses. Once all the data and information had been collated a full analysis was undertaken and a report detailing findings together with conclusions and recommendations was produced.

The Benefits to ABP : cost-savings and price consistency

ABP decided to implement a number of the recommendations resulting from the initial report. This included a full tendering exercise for all 21 ports and other businesses within the group including its specialist UK Dredging division. The exercise, conducted in accordance with the EU Utilities Directive, resulted in the award of a number of new contracts which provided significant cost savings and operational efficiencies plus a standardisation of approach across the group together with a consistency of price methodology.

ABP sign up for our Fuel Support Services

As a result of our initial Health Check and subsequent tendering exercise we have developed a close working relationship with ABP.  We continue to provide support to them including the independent calculation of prices for invoice checking and regular updates through our Market Intelligence & Reporting Suite. This gives ABP the opportunity to challenge supplier invoices which may be incorrectly priced. Also, through our Monthly Oil Bulletin, ABP are able to keep updated with developments in the oils market which may impact on the business.  

They have ongoing access to our fuels procurement specialists, who are on hand to answer any specific concerns they may have.

 

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