Walmart's New Fuel Management Program

Learn about:

• Walmart's New Fuel Management Program (FMP)

• How FMP Impacts Collect Suppliers

• What FMP Charges Look Like

Things are changing for Walmart's Collect suppliers, again. In August 2022, Walmart rolled out the Collect Pickup Program. This required Collect suppliers to pay two different charges for using Walmart Freight in the US:

Pickup Charge: A charge for Walmart Freight to pick up any shipped items. The dollar amount of the Pickup charge is a percentage of the COGS determined by the item's department every month. Walmart also refers to these as department charges.

Fuel Surcharge: A charge based on the distance to deliver products to its destination plus the factor of current gas prices.

As of February 1, 2024, Walmart rolled out the Fuel Management Program (FMP), in which Walmart will drop the pickup charge and move exclusively to a fuel charge.

Let's dive into what this program looks like and what it means for suppliers. 

What is the Fuel Management Program?

Walmart's Fuel Management Program requires suppliers to pay a fuel charge for Collect shipments. Walmart's objective behind the FMP is to deepen its commitment to its customers by keeping costs low by sharing fuel costs with suppliers.

While this objective is similar to the goal of the Collect Pickup Program, Walmart believes the FMP will better streamline how it shares transportation cost accountability with Collect suppliers to meet everyday low-price commitments. 

Which Suppliers are Impacted?

The FMP applies to all Walmart U.S. Collect suppliers. You can expect to see the FMP charges if:

• You exclusively or partially ship using Collect terms (only your Collect shipments will be charged).

• You're a DSV supplier whose POs are created in the Order Management System and have Collect Freight terms.

• Your POs flow through a consolidation center (charges apply regardless of delivery method).

Exemptions to the FMP charges include:

• E-commerce orders

• Walmart Fulfillment Services and Prepaid suppliers who are backhauled

• Direct imports

The only way to opt out of this program is, if possible, to ship Prepaid exclusively. In doing so, you would be responsible for all Prepaid requirements, like OTIF compliance, warehouse allowances, and returns.

What Do FMP Charges Look Like?

Walmart refers to the FMP charge as a fuel passthrough fee, which occurs as a monthly invoice deduction for fuel charges. The charge is across all departments. 

FMP Billing Process

Here's what suppliers should know about the FMP billing process:

• Fuel charges are deducted monthly from supplier Cost of Goods (COGS) invoices.

• Deductions occur at the 6-digit vendor accounting level.

• If multiple suppliers share a truck, fuel costs are split based on the size of their respective loads.

How FMP Calculates Fuel Cost

Walmart Transportation will continue to utilize Breakthrough Fuel (BTF) to calculate the fuel cost. BTF calculates fuel costs based on the following:

• Actual freight movements and real-time fuel costs.

• Daily fuel price changes matched against geographic locations and shipment days.

• State and local taxes based on route data.

• Capture of regional price differentials across the U.S.

Walmart utilizes BTF data for all Collect shipments, regardless of whether Walmart's fleet or a Walmart third-party carrier completes the shipment. 

What the Deduction Looks Like

The FMP deduction does not have a specific code. When a supplier receives an FMP deduction, the invoice number will start with 7XXXXXXXX. As a reminder, these deductions will appear monthly and be taken from the supplier Cost of Goods invoices.

Stay Informed with SupplierWiki

Understandably, it can be frustrating for Walmart suppliers to continually adjust to new changes and processes, especially when Walmart communicates these changes with little notice or visibility. SupplierWiki is on a mission to improve suppliers' lives by providing them with proactive and transparent communication regarding Walmart's changes and processes. We strive to offer tools and resources that empower suppliers to adapt efficiently and effectively, minimizing disruptions to their operations and fostering stronger partnerships with Walmart.

Sign up for our newsletter to stay informed on big changes and best practices for Walmart suppliers.

Get Better with SupplyPike

As a Walmart supplier, it may feel like many things are out of your control. With SupplyPike, you can take control of your operations and success. Meet with our team to find out how SupplyPike can help you fight deductions, meet compliance goals, and analyze root causes with software tailored specifically for Walmart suppliers.