It seems every few years we need to address this same topic as conditions change in the market surrounding fuel costs. The last time we had rapidly rising fuel costs was back in 2008 when fuel prices exceeded $4.00 per gallon just prior to “The Great Recession” when the economy [gas] tanked after the housing market debacle.
As we now start to close in on prices per gallon nearing $6.00 (recent cost to fill my diesel truck), you must start asking yourself what’s on the horizon and how high can these prices go?
No matter the cause, it seems decisions made by leaders often besets the price of goods and commodities, and most certainly negatively impacts fuel. Since fuel costs are often the second-largest expense to managing a fleet of assets, this can be detrimental to a fleet manager’s bottom line. So, what can a fleet manager do to start mitigating fuel costs?
Over the years, I’ve developed a list of a dozen items that I take to mitigate the impact of fuel costs as a veteran fleet manager. As a consultant with Mercury Associates, a software user at RTA, and a veteran fleet manager, below is a list of things I recommend an organization starts doing to mitigate the rising costs of fuel.
- Leverage your fleet’s Telematic data: A single gallon of fuel can be burned every hour of engine idling. A fleet can reduce the impact of unnecessary idling by implementing good policies to “idle for safety and not comfort”. Today’s engines are equipped with computers that allow fuel consumption, and depending on the vehicle, idling can be regulated by using auto-shutoff after 5 minutes. It’s also a good time to monitor fuel idling percentages by the asset. I’ve found that most assets idle above 30-percent on average and it is very doable to get this close to 10-percent.
- Leverage volume fuel purchases: Fleet operations should have a fuel purchasing contract in place to leverage the lowest rack price available in the market. Purchase consortiums like state contracts or supplier leveraged contracts using a nationwide provider are a good way to reduce prices at the pump.
- Perform regular preventative maintenance: Vehicles running optimally just simply consume less fuel. Ensure that your shop or service provider is maintaining your vehicles at the prescribed interval recommended by the manufacturer. Friction is an engine and fuel killer. Make sure you change your oil at the correct intervals and ensure your vehicle is operating efficiently. And don’t forget about changing your spark plugs at the right time.
- Keep your tires inflated: One of the best ways to reduce fuel costs is to check tire inflation daily during rapidly rising fuel prices. Issue your drivers an inexpensive air gauge and ask them to check air pressures to ensure they are accurate. Most vehicles today are equipped with tire pressure monitoring systems (TPMS) which makes this much easier for the driver. But ensure your drivers understand the importance of the TPMS. Underinflated tires that hinder the rolling resistance force the vehicle to burn more fuel.
- Plan your route to avoid making unnecessary trips: Take a few minutes to plan out your day. This allows you as a driver to minimize the number of miles and stops needed. Many fleets today use logistics software to preplan their driver routes to minimize miles traveled. The fewer miles traveled; the less fuel consumed.
- Avoid traveling during rush-hour traffic to prevent congestion: Plan your day to avoid traveling during your city’s peak traffic hours (7-9 AM and 4-6 PM). Sitting in traffic, going nowhere burns fuel. It may be less expensive and safer just to wait.
- Avoid “jack rabbit” or “jerky” stops and starts: Smooth acceleration and braking saves fuel costs and helps to save wear and tear on the vehicle’s brakes and suspension components. This can be easily monitored using a telematic device along with other critical fuel killer metrics like speeding. Many fleet managers today have a fuel scorecard to help their drivers perform better and safer.
- Drive at speeds that maximize fuel efficiency: It’s known that driving at a slower consistent speed saves fuel. If you have been around long enough, you know when the fuel costs start to rise that some legislator somewhere will introduce a bill to lower the maximum speed limit to 55 miles per hour. Remind your drivers to watch their speed to reduce fuel costs. Use cruise control to maintain constant speeds when highway conditions permit.
- Reduce “drag” on your vehicle by using the air conditioner rather than rolling down windows: The age-old debate has always been, “is it better to use air conditioning which places more strain on the engine and burns more fuel or open the windows?” Open windows cause drag (friction) and friction increases fuel burn. Keep your windows up and use your air conditioning.
- Replace assets in a timely manner: Hopefully, you have a strategy to replace assets at their optimal replacement point when the capital and operating cost curves meet. During the last several decades, fuel efficiency in vehicles has increased significantly, and hanging on to older less fuel-efficient vehicles simply wastes more fuel. Most fleet managers today have a fleet management information system (FMIS) in place to better monitor asset lifecycles to make these critical decisions before a crisis arises. Spec’ing vehicles with the most efficient engine and drivetrain for the intended purpose also aid in fuel savings. (e.g., 6-cylinder v. 8-cylinder engine, etc.)
- Take advantage of Electric Powertrains: With the technology today, fleet managers can purchase more efficient electric and hybrid electric vehicles. If you are too late to the electric party, this may not be an immediate solution, but keep it in mind for the next economic collapse when prices rise again -- because prices will increase again in the future.
- Minimize fuel misuse and prevent fraud: Most fleet experts agree there is an opportunity to reduce fuel costs up to 5 percent through better transactional monitoring. Monitoring fuel transactions lets managers identify drivers fueling personal vehicles, drivers using incorrect fuel (e.g., premium instead of regular), identifying fuel theft during off-hours, and reviewing drivers using higher-priced fuel stations in their areas. Many private contractors are available in the industry to help fleet managers monitor fuel transactions.
Summary
There are many other resources in the industry that can provide information on how to mitigate fuel costs in your fleet operation. Take advantage of the free fleet industry publications like Automotive Fleet, Government Fleet, Transport Topics, Commercial Carrier Journal, NAFA FleetTrends, Fleet Management Weekly, and others who are offering timely tips while we’re all experiencing these rising fuel prices. Lastly, don’t underestimate the power of peer networking to inquire what your fellow fleet professionals are doing to offset their fuel costs.