Demand for Fuel Optimization Product Gains as Pump Prices Increase, TMW Systems Says
By Thomas Strah, Editor, TT Magazines
This story appears in the Sept. 29 print edition of Transport Topics. Click here to subscribe today.
ORLANDO, Fla. — A fuel-optimization module acquired 12 months ago has since become a leading growth product for software vendor TMW Systems, which held its annual user conference in the heart of this resort-rich peninsula last week.
By the end of 2008, TMW expects to nearly double the number of trucking and other transportation-related customers using a bundle of fuel pricing, best-route-finding and lane-picking software designed by Integrated Decision Support Corp., Richardson, Texas.
TMW purchased IDSC in September 2007 — not long before the national average cost of diesel started heading for uncharted heights.
“Obviously, $5-a-gallon diesel helped spur a lot of interest in the product,” Dave Wangler, TMW’s chief executive officer, said. “We came into the year with 60 customers using [IDSC’s] ExpertFuel, and we’ll exit with 110 to 115 on it.”
The Department of Energy fuel price leaped from a $3 plateau last October, and in February took off for $4 and higher.
Truckload carriers “are really going after out-of-route miles,” Wangler told Transport Topics Sept. 21, in explaining why demand is strong for all kinds of optimization tools in the highly competitive software field. “And they’re trying to find out who’s really the low-cost [fuel] provider,” using optimization as sort of a truth-in-advertising search engine.
Getting the best price has become even more important, as the fuel-price spread — the difference between highest and lowest truck-stop retail prices across the country — is now running well over a dollar, Wangler said.
TMW’s nationwide snapshot on Sept. 24 showed a range of $3.29 to $4.92 per gallon.
The algorithms of ExpertFuel and related programs are designed to examine fuel prices; vehicle consumption; the fleet’s fueling network; state tax implications; route and tank-fill policies; out-of-route miles; and amenities drivers want at truck stops in helping managers identify best fueling locations and negotiate price discounts with suppliers, according to TMW.
IDSC was the most recent of three acquisitions TMW has completed since founder Tom Weisz sold the software firm to two private investment groups in September 2005.
In 2006, TMW purchased Maddocks System, which had a strong base in Canadian trucking and was expanding in the United States.
TMW continues to maintain the Maddocks’ Truckmate software suite as a stand-alone product, “as we said we would do . . . two years ago,” Wangler said.
In May 2007, TMW bought TMT Software, which specializes in fleet parts and maintenance management.
Wangler said TMW did not have other acquisitions in mind at this time.
“Organic” growth — adding customers and increasing product sales — as well as expansion by acquisition, pushed TMW’s revenue to $65.5 million in 2007 from $44.9 million in 2006 and $26.3 million in 2005, according to a company report.
The software company, which has headquarters in the Cleveland suburb of Beachwood, Ohio, and satellite offices in Dallas, Durham, N.C., Indianapolis and Vancouver, British Columbia, claims more than 1,600 customers — 1,100 of which are “transportation” companies. Others include third-party logistics companies and construction, municipal and waste fleets.
About 950 customers attended the user conference. Wangler said current economic conditions had not dampened the number of client companies in attendance, but some may have sent fewer participants than in the past.
