Brambles obtains significant cost savings through tariffs and procurement

The two Brambles businesses in Australia, CHEP and Recall, recently used Energetics' energy procurement services to help them recontract their energy needs. The Energetics team negotiated electricity and gas contracts in every state delivering an overall cost benefit. At the same time Energetics assisted Brambles by optimising the network tariffs for each of their 70 sites.

Key Facts

Client: Brambles
Industry: Transport and Storage
Project: Energy procurement
Lead consultant:

 

Outcome

Procurement strategy
Having re-contracted sites that were expiring imminently, the next step was to develop a procurement strategy in discussion with CHEP and Recall. Energetics prepared a detailed procurement strategy which helped ensure that optimal price outcomes could be achieved from the procurement process.

Billing and tariff reviews
Energetics undertook a detailed billing and tariff review of all sites, including sites managed by landlords, and highlighted significant savings. Some billing errors were identified, but most savings were derived from changes to tariffs and from resets to demand settings.

Background

Brambles is a provider of supply chain and information management solutions through its two primary businesses, CHEP and Recall.

CHEP is a global leader in pallet and container pooling services and helps customers transport products safely and efficiently through the supply chain.

Recall is a global leader in the management of information throughout its lifecycle and provides customers secure and efficient information storage and destruction services.

Brambles has approximately 70 sites across Australia, with an annual energy spend of almost $4 million. These accounts were initially spread across a number of different contracts with 11 different retailers and with expiry on different dates.

The accounts range in consumption from small offices to large industrial sites using over 1,800 MWh of electricity per annum. Its sites are located across WA, SA, NSW, Qld, Vic and the ACT. Brambles also had a number of accounts in rented premises where they were being charged more than necessary.

With such a wide variety of suppliers and contracts, Brambles sought Energetics' assistance to conduct a review of billing accuracy and to develop a strategy for realising tariff savings. In addition the strategy aimed to consolidate retailers to aid contract administration.

Project Objectives

This project had the following objectives:

  • Conduct a bill check to identify any immediate savings and then conduct a follow-up review after 12 months
  • Review the contract position for all sites
  • Develop a strategy for going to market for both electricity and natural gas
  • Conduct tenders based upon the agreed strategy
  • Provide on-going energy support services, such as budgeting

Our Approach

In addition to bill checking and identification of errors, Energetics developed a procurement strategy in conjunction with Brambles.

Taking a strategic approach to energy procurement provides clients with a full understanding of market conditions and highlights the importance of timing and fast decision making in a volatile market. In this case, Brambles was also made fully aware of environmental charges and other costs being passed through by retailers.

This approach ensures Energetics and the client are aligned to the common goal of achieving a successful outcome from the tender process as the client is ready to enter the market when conditions are favourable and is better placed to avoid price uncertainty.

Companies who leave energy contract negotiations until just before their contracts expire have no choice but to take the prices available at the time. This is a risky strategy in a highly volatile market such as electricity. Organisations such as Brambles who take an active long-term approach to the energy market are better placed to minimise their energy costs in the short and long term.