TSD Fuel Program Update

[johndeerefarmer]

Well, that's kind of good to know, glad to hear it wasn't something more systemic (Good Sam again, thanks for nothing!).

I continue to be fascinated by the economics behind this. To your last point, "sell it at a loss", no, I don't THINK they are doing that, but? Are they?!

In my area, Loves, on the app, is 1.99/gallon. TA is 1.33/gallon. Difference of .66/gallon between the two. So, what's going on?! What's the "buy price" right now on a tanker full of diesel per gallon? 1? 2? 1.20? Is TA buying it at 1/gallon and Loves spending 1.75? I've always thought that gas/diesel was a VERY low margin business. Like, if they are selling it for 1.99, they probably paid about 1.70-1.90 per gallon for it. I thought it was a volume business, not a markup/margin business. But, TSD is blowing that all to pieces for me. I sincerely doubt that TA is selling me diesel fuel at 1.33/gallon and losing money. So, let's just pick a number, let's say TA is buying fuel at 1.10 a gallon and selling it at 1.33, making about 20% on the transaction. If TA can buy at 1.10 a gallon, I can't see any reason that Love's can't buy at that price too, which means that if I go to my Loves and pay 1.99/gallon, it's almost 2X markup?! That's not a "low margin" business, in fact, it's an extremely high margin business. That would mean that my fuel up at Loves, assuming I do my truck and transfer tanks (about 200 gallons) would make them close to 150 dollars in 10 minutes? Holy crap! That's a money printing machine (a diesel pump, who would have thought it!).

I just don't get what's going on here from an economic standpoint. I mean, if TA can sell fuel at 1.33/gallon to TSD and make money, why aren't there some gas stations, even small independants, selling diesel at that rate to generate business? It's been boggling my mind since I got the TSD card, I just don't see how you sell a commodity like diesel fuel that entirely fungible and transparently (well, apparently not!) priced all up and down the highway at 20-50% off. It makes no sense to me, I said, jokingly, in another thread, I feel like I could make money now buying from TA and hauling it to Loves, selling it to them for 10% over what I paid for it, and they'd still make .50c per gallon selling it at their posted rate.

Since I don't think that anyone is selling below cost, what I do think that is that, specifically in diesel fuel, there are really 2 markets. The high consumption trucker market, where they pay a "TSD type" price, which is closely linked to the real price of diesel fuel. That's the "normal" low margin business that I thought was the entire fuel market. Then there's the other market, call it the "suckers market" where people pay close to 2X that for the small amounts of diesel that they need. All out of the same pumps from the same station selling the same fuel. Kind of like how you can buy premixed 2 stroke fuel at Lowes for 25/gallon or make your own out of no-E gas for about 3/gallon? Anyone using any appreciable amount of 2 stroke gas is going to pay 3/gallon, the "suckers" are going to pay the "posted rate" at Lowes?

I love my TSD card, and I'm so glad that they do what they do; hopefully the discounts at Loves come back in line, but, for now, it's TA for me. But it boggles my mind every time I fill up and see these huge discounts, I just don't know how they can do what they do, but I'm real glad they do it! I just hope they get into other commodity markets soon, let's find a way to buy gold at 1000/oz.

TA just joined the program and is trying to get truckers and rvers to buy from them by offering the large discount. They can't be making any profit at that price. I imagine once diesel prices go back up Loves and others will increase the discount again and by that time TA's discount will be lower.

I always stop at Loves on my Colorado trips because I am usually towing and the stores are nearly always clean. Even if I only get .18 discount I will still stop because I have already been going there. There is only one TA in Walsenberg CO that I can stop at, so I will add it to my list.

We used to stop at a Pilot in Amarillo and I used my Good Sams card. Now without a TSD discount we will stop at the Toot n Totum down the road. They are not as busy and have premium diesel fuel

When Loves had the good discount I could take my 100 gallon tank and even paying road tax get my diesel cheaper than buying it from the farm supplier without tax. On top of that I could get the road tax back from the state at the end of the year. At the moment with the .18 discount its not worth it for the paperwork

[Overtaxed]

When Loves had the good discount I could take my 100 gallon tank and even paying road tax get my diesel cheaper than buying it from the farm supplier without tax. On top of that I could get the road tax back from the state at the end of the year. At the moment with the .18 discount its not worth it for the paperwork

LOL, I did exactly the same thing. TSD is dramatically better than the price I can get for "red diesel" from my farm supplier, even getting 1000's of gallons at a time, they can't get close to TSD prices and that's without paying the road tax. It's crazy. Could they actually be paying more for untaxed diesel (their price) than I'm paying for taxed?

I'm sure the fact that oil was selling at negative prices recently has caused some pricing dislocations, maybe that's part of it.

But here's the thing I don't understand. If Loves could sell diesel to me at ~1.10 a gallon a few days ago, why isn't there some station somewhere advertising prices like that? If someone can sell at 1.10 and make money, you'd think that other stations can too, and they'd get TONS of traffic if they put up a sign at that price! I guess maybe it's because all the big consumer of idiesel have EFS type cards, they just advertise there/to that group and let those without the cards pay "stupid prices" for it?

[ScopesNC]

TA just joined the program and is trying to get truckers and rvers to buy from them by offering the large discount.

TA and Petro were both part of the program from almost the very start the same as Pilot, Flying J and Loves were. They just never offered such deep discounts as they do now. I think your right though. They are trying to gain truckers and RV'ers with these discounts. Just a guess but I think it'll work with them cheap RV people.
TA and Petros have lost a lot of business to the newer style Loves and Pilots these past few years. You see new Loves and Pilots popping up all over the place. TA's and Petros, not so. Who knew truck stops were such a dog eat dog world ?

[Terry188]

Yes, it sure is an awesome deal for us. Now with more options to choose from.

[Terry188]

I just fueled up at my nearby Loves yesterday. Yesterday's rate was $1.889 / gal. On May 5 I paid $1.27 / gal. Seems the discount isn't as great at Loves anymore. I did a price search around and now Petro and TA seem to be the big discounts. Bummer cause Loves is much more convenient for us.

[Overtaxed]

I just fueled up at my nearby Loves yesterday. Yesterday's rate was $1.889 / gal. On May 5 I paid $1.27 / gal. Seems the discount isn't as great at Loves anymore. I did a price search around and now Petro and TA seem to be the big discounts. Bummer cause Loves is much more convenient for us.

Yeah, loves discount stinks now, I can beat it just by shopping the fuel prices along the highway. TA is really good, 1.43/gallon right now. And, looking at the app, I just had a new one pop up, Kangaroo, at 1.510 a gallon that's quite close to my house. Not bad, although, to be honest, I've NEVER been to a Kangroo, so I have no idea what to expect!

[Whiteley RV]

Love's is no longer highly discounted...currently 16 cents discount off retail...possibly they are not happy with the TA price negotiations.

There are very few TA / PETRO's in the DFW area and for the region for that matter....The loss of the Love's discount is not good.

[Terry188]

Just filled up at The Cash Magic Truck Stop & Casino in Berwick, LA. $1.62 / gal. Not too bad! About $0.55 discount..

[Grand ram]

Got an email this morning from TSD Logistics

Good evening TSD Fuel card holders. We have some great news. TA/Petro has come back to us with some great rates. They will likely be the lowest price out of all of our vendors.

We have also added Kwik Trip and Kwik Star to our discount program with 10 cents off per gallon. We are reaching out to others now to see if we can increase to some of the smaller chains. Our current discount network is TA, Petro, Loves, Road Ranger, SAAP Brothers, Ambest, Kwik Trip and Kwik Star.

Just thought I'd share

Mike

Are you guys talking diesel fuel or unleaded

[FT4NOW]

Are you guys talking diesel fuel or unleaded

Diesel, specifically using truck lanes at truck stops.

Sent from my SM-G950U using Tapatalk