How a Fuel Distributor Learned Its Fastest-Growing Region Was Losing Money
Use case Network & territory marginFuel distributor, 420 sites
How a fuel distributor learned its fastest-growing region was losing money.
The eastern region grew volume 9% in a year, and the plan was to double down. Cortex showed the growth was built on contracts priced before freight.
“Where should we grow next?” → one question to Cortex AI
01 · The challenge
A growth plan built on the volume report.
The eastern region was the company’s success story. Volume was up 9%, dealer count was up, and the board plan added two sales hires and more terminal capacity there.
Margin reports looked healthy too. But freight was spread at the company average, not charged to the loads that caused it.
Before Cortex
What the team saw first
- East region volume+9% year over year
- Reported margin11.2¢ a gallon, before freight
- FreightAllocated at the company average
- InstinctInvest more in the East
The difference
Same question. Different results.
The question“Which contracts, routes and territories are making or losing money after freight, and where should we grow next?”
Claude / GPT / Public LLMs
Uploaded file
Answer
The East grew volume 9% this year, your fastest-growing region. Invest more there.
Just an answer.
Cortex AI
Connected intelligence
Cortex AI- Freight cost by route
- Contract terms
- Rack prices
- Delivery records
- Truck miles
- Dealer volumes
- Competitor prices
- Road traffic
- Fuel taxes
- Terminal access
- 23 contracts below zero
- −1.4¢ a gallon after freight
- Growth priced before freight
Answer
Your fastest-growing region is losing money. 23 eastern contracts average −1.4¢ a gallon once true freight is charged. Reprice with a freight pass-through: $1.6M a year.
A decision.
02 · The finding
The region was growing because it was underpriced.
Cortex rebuilt margin for every contract from BOLs, terminal lifts, dispatch miles, freight cost and rack and spot prices. It added competitor locations, traffic and mobility data, and new construction.
The East wasn’t winning on service. A supply allocation had moved to a terminal 70 miles farther away, and these contracts had fixed delivered prices signed before the move.
What Cortex found
Where the margin really was
- Margin rebuilt per contractTrue freight charged to every load.
- 23 contracts below zeroAll in the East, averaging −1.4¢ a gallon.
- Cause confirmedSupply moved to a terminal 70 miles farther. Prices were fixed before the move.
- Growth found14 independent sites on two growing corridors, near the lowest-cost terminal.
Fix the contracts before adding a single gallon. Then grow where the freight works.
- Repriced the 23 contracts with a freight pass-through at renewal. 19 accepted, 4 were let go.
- Moved two eastern routes to spot supply from a closer terminal.
- Sent the new sales hires to the two western corridors instead of the East.
03 · The impact
What changed.
Volume isn’t growth until freight is in it.
Our volume report said grow in the East. Our freight bill said stop. Cortex was the first thing that read both.
Every distributor has a region that looks great on volume. The question is whether anyone has checked it after freight.
