SENATOR INTERNATIONAL
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Senator International is a furniture company with its own fleet. Fuel increases come straight off the bottom line, so avoiding jumps in price is very important. “We hesitated for a long time before hedging and then trialed a small amount. We have now been hedging fuel with Portland for 12 months,” says manager Stuart Thomson. He emphasises that this has nothing to do with trying to make money or play the markets. “It’s about us being able to set an operating budget and stay within it [despite fuel cost rises],” he says. “In early May, the price dropped quite significantly, so I had 50% of our fuel covered again. If the price continues to drop I’m happy, and if it goes up, I’m protected.” As Senator has 30-plus drivers, and 800,000 litres of fuel a year representing 20%-plus of operating costs, Thomson is convinced that hedging 35,000 litres a month (about half) is smart and simple. “We only hedge for between one and three months at the moment,” he says. “But if I could get a price that would keep us within budget, I’d cover for the rest of the year.”