Glen Sokolis has been helping fleets manage their fuel programs for more than two decades, with fuel-buying experience from the contract to the tank to the truck. He\u2019s the founder and CEO of Sokolis Group, a fuel management consulting company.<\/p>\n
He advises fleets to step back and look at their whole fuel program from top to bottom. He cites fuel management as one of the components that gets lost in most organizations \u2014 even big fleets.<\/p>\n
For instance: If you\u2019re a small operator, your \u201cfuel program\u201d may just be a fuel card. But look at the fuel card you\u2019re using. Does it offer the best discounts?<\/p>\n
If your operations are local, you might be able to have all your drivers fuel at one location and negotiate a deal with that location.<\/p>\n
If you\u2019re a larger company, you might buy fuel at truck stop chains, use mobile fueling, or have bulk fuel delivered, and there are discounts to be had with enough volume.<\/p>\n
The goal is for each fleet to look at its program and decide what\u2019s best for this company \u2014 and to revisit that decision on an ongoing basis.<\/p>\n
\u201cIt\u2019s really an all-encompassing look at how you\u2019re buying fuel,\u201d Sokolis says. \u201cI find most companies sort of set it and forget it and never look back. But a good fuel program is a living, breathing thing.\u201d<\/p>\n Mobile fueling is becoming a more widespread option and something fleets can consider in evaluating their fuel management programs.<\/p>\n Photo: Booster Fuels<\/p>\n<\/figcaption><\/figure>\n The first thing to know for a good fuel program is how many gallons you actually buy, Sokolis stresses.<\/p>\n \u201cYou\u2019d be surprised about how many companies don\u2019t actually know,\u201d he says. \u201cThey know the dollars, but dollars aren\u2019t always going to give me an answer, especially right now when the prices are so high.\u201d<\/p>\n You can\u00a0negotiate deals if you know how many gallons you\u2019re buying, but determining that is often easier said than done.<\/p>\n \u201cA lot of companies don\u2019t buy their fuel from just one source anymore,\u201d Sokolis explains. \u201cThey buy it on a fuel card, and they have a mobile fuel vendor, and they use Ryder, Penske, or some other major lease company to buy their fuel. We\u2019ve had companies come to us that maybe have eight locations, and every one of their locations is using a different fuel card. All these different fuel sources are coming in, and they don\u2019t consolidate it all, so they really don\u2019t have a great handle on how many gallons they\u2019re buying any month or any year.\u201d<\/p>\n Once you\u2019re armed with information on your fleet\u2019s fuel-buying patterns, you can work to negotiate discounts.<\/p>\n In general, Sokolis says, a fleet probably needs to be buying 10,000 gallons or more of fuel per month in order to talk to a fuel vendor or local retailer and negotiate a deal. Talk to some of your fuel suppliers and see if you can consolidate some of your volume for a larger discount. If you\u2019re buying bulk or mobile fuel, determine if you\u2019re getting the best pricing available to you based upon your size, how frequently you get your deliveries, and how well you pay.<\/p>\n Even for smaller operations, just using a fuel card typically provides some kind of a percentage off.<\/p>\n For over-the-road fleets, \u201cuse a fleet fuel card that is widely accepted at truck stops,\u201d Sokolis suggests. If you\u2019re issuing a regular credit card to drivers for fuel purchases, you\u2019re paying a premium over the cash price.<\/p>\n \u201cThis is an expense that most companies don\u2019t even know that they are paying,\u201d he says.<\/p>\n Does your card offer other benefits, such as cardless fueling, discounts on other products and services such as tires, or access to reporting and analytics tools?<\/p>\n One of the common things fleets overlook, Sokolis says, is that there are other fueling options out there.<\/p>\n \u201cThey\u2019re so set in the ways they\u2019re doing things that they might not have looked at the possibilities of going to a different truck stop chain, or consolidating their volume to one specific truck stop chain, or potentially mobile fueling.\u201d<\/p>\n For instance, are you spending a lot of money on labor costs? Because if you are, perhaps you want to look into mobile fueling, where a mobile fueler comes out at night and fuels your vehicles where they\u2019re parked. Your driver gets in the next day, and away he or she goes to start making deliveries. Your drivers aren\u2019t wasting their time fueling up before they can even get started on their work for the day. And you can negotiate discount deals with the mobile fuel vendors.<\/p>\n \u201cOne of the things that has sort of been going away over the years has been bulk fuel on site,\u201d Sokolis says, thanks to environmental regulations and challenges in upkeep. \u201cUnderground tanks always seem to need some upgrade or have some kind of issue,\u201d he says. \u201cAn above ground tank, that occupies a lot of space, and again, there are additional issues. But if you already have a bulk tank and it\u2019s all upgraded and good, you probably want to stay with that and negotiate a deal with your vendor.\u201d<\/p>\n Of course, for many over-the-road fleets, truck stops are a necessary part of their fuel program. If you have a larger fleet, look at consolidating your gallons with a single truck stop chain. \u201cInstead of having your drivers be able to buy fuel at every truck stop available in America, you may want to consolidate down to one of the larger truck stop chains and negotiate a deal,\u201d he says.<\/p>\n \u201cA common problem in fuel-management programs is that fleets don\u2019t understand fuel margins,\u201d Sokolis says. \u201cThey understand their margins in their business, but they don\u2019t understand the margins in a fuel business.<\/p>\n \u201cWhat you want to do when negotiating a deal is have the lowest possible margin that you\u2019re paying in fuel. And for every company, it\u2019s a little bit different. If you\u2019re buying 500 gallons from a vendor, your margin is going to be very large. If you\u2019re buying 500,000 gallons from a vendor, your margin is going to be very small.\u201d<\/p>\n Sokolis recommends aiming for a deal where pricing is based upon some kind of a benchmark, such as the Oil Price Information Service or DTN average.<\/p>\n \u201cYou can negotiate a discount off that benchmark along with some kind of freight rate that goes along with it, so you have consistency in pricing,\u201d he says. \u201cYes, the price is going to go up and down, based upon the market conditions, but your margins are going to remain the same, which ultimately that\u2019s really what you want.\u201d<\/p>\n \u201cFuel companies are having issues with labor, just like everybody else, and a lot of mistakes are made,\u201d Sokolis says. \u201cWe have seen many invoices that were signed off for payment that had the wrong gallons by more than 1,000 gallons and the wrong fuel price by more than $3 a gallon.<\/p>\n \u201cAudit your fuel invoices to make sure that you\u2019re getting what you thought you were going to get and paying for what you thought you were going to be paying. If the vendor makes a half-cent or a one-cent a gallon mistake on your pricing, that can lead to tens of thousands of dollars in missed opportunities where you\u2019re paying more.\u201d<\/p>\n This article first appeared in the June 2022 issue of Heavy Duty Trucking magazine.<\/em><\/p>\n <\/p>\n By Deborah Lockridge Editor in Chief<\/p>\n![\"Mobile](\"https:\/\/fleetimages.bobitstudios.com\/upload\/trucking-info\/content\/article\/2022-06\/boosterfuels-__-720x516-s.jpg\")
1. Know How Much Fuel You\u2019re Buying, And From Where<\/h2>\n
2. Negotiate Discounts<\/h2>\n
3. Evaluate Fueling Options<\/h2>\n
4. Understand Margins<\/h2>\n
5. Audit Your Fuel Bills<\/h2>\n
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