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Understanding methods and certain nuances regarding tried and true ways to reduce fuel spend\u00a0can further help fleet managers curb fuel spend in an area that often shows fluctuation.\u00a0 Photo by Evgeny Gromov via Istockphoto.com<\/p>\n
Fuel prices have been on the rise<\/a> so far in 2019, which is something fleets need to be cognizant of. As of April 22, 2019, conventional retail gasoline prices have been on the rise, with the latest weekly U.S. regular conventional retail gasoline prices resting at $2.84, according to the U.S. Energy Information Administration (EIA).<\/p>\n Fortunately, fuel prices are expected to be down 3% in summer 2019 when compared to 2018 according to EIA, but preparing to manage fuel simply based on tracking trends at the pump isn\u2019t enough. Modern day technology, effective vehicle selection, and driver behavior are major components that also impact fuel spend.<\/p>\n These are tried and true methods that are designed to work in the interest of improving fleet fuel spend, but understanding methods and certain nuances can further help fleet managers curb fuel spend in an area that often shows fluctuation.<\/p>\n Considering the vehicle types a fleet should be incorporating into its overall operations has major impacts on how much fuel is spent, not to mention total cost of ownership (TCO).<\/p>\n Not making intelligent decisions in this area can cause major implications. For example, a fleet utilizing a majority of sedans versus one that has more pickups might end up spending less on fuel as a result of mpg differences. More important, however, is identifying vehicles that are best suited to fit the needs of the organization.<\/p>\n One fleet manager, Peter Belloli, CAFM, associate manager, Sourcing – Fleet – USA\/Canada, MilliporeSigma, said his fleet allows drivers to select the type of vehicle that they utilize for work. Reflecting current vehicle purchasing preferences, Belloli said his driver\u2019s typically select SUVs and CUVs, which generally yield higher mpg. He said this has contributed to a rise in fuel spend for his fleet.<\/p>\n \u201cThe fleet department is cognizant of mpg ratings but being a pharma company, the need to attract\/retain sales talent overrides any approach to offer smaller vehicles,\u201d he said.<\/p>\n Despite this, however, he said that the fleet has been able to offset the costs due the higher resale value that these vehicles types yield. It\u2019s also benefited the fleet in a way that cannot be measured monetarily: driver satisfaction.<\/p>\n \u201cDrivers have been pleased with choices and thus (are) happier,\u201d he said. \u201cNot that many carry a lot of equipment so it is more appreciated from a lifestyle perspective.\u201d<\/p>\n When it\u2019s applicable, fleets should consider rightsizing to help identify vehicles that provide better fuel economy.<\/p>\n \u201cWhen you\u2019re talking about mpg data, are you identifying vehicles in your fleet that for whatever reason are getting a lower than expected mpg, so that you can use that as a jumping off point to find out why that might be the case, and then to make some changes as is appropriate,\u201d said Larissa Clinard, CAFM, fleet manager, J. F. Ahern Co.<\/p>\n Thurman Register, fleet manager for Southern States Cooperative, said rightsizing was a component to addressing fuel spend in his fleet, though had some caveats.<\/p>\n \u201cFleet rightsizing \u2013 as we continue to right size our fleet we have seen fuel patterns change. In some areas we reduced fleet size, in others increased \u2013 however as we move and utilize the assets more efficiently the overall fuel gallons consumed are reduced,\u201d said Register. \u201cWe are seeing a trend in tools and equipment used on our trucks to more electric \u2013 therefore idle times are being reduced to run things such as compressors for air tools, etc.\u201d<\/p>\n But it\u2019s not just the types of vehicles themselves that will have an impact on fuel spend, it\u2019s how they are utilized within an organization.<\/p>\n There are myriad driver behaviors that can have a greater impact on fuel spend more than any other issues, which includes ineffective routing, excessive idling, overspending by purchasing premium fuel types that are not necessary, and fraud.<\/p>\n \u201cAre drivers filling up more than what the vehicles tank capacity is? And is the fuel a different grade than you would be expecting? This could indicate that the fuel card is being used for things other than the vehicle that is assigned to them or could indicate fraudulent activity,\u201d said Clinard.<\/p>\n Excessive idling is a common concern among fleet managers, but being able to identify the reason idling is occurring, whether this means making changes to the fleet policy, such as creating an idling threshold that works best for the company, or identifying problematic drivers where idling is seen occurring the most.<\/p>\n Speaking of problematic drivers, improving driver safety will also have an impact on reducing fuel spend; this includes curbing aggressive driving tendencies.<\/p>\n \u201cAggressive driving (speeding, rapid acceleration and braking) wastes gas,\u201d according to the U.S. Department of Energy. \u201cIt can lower your gas mileage by roughly 15% to 30% at highway speeds and 10% to 40% in stop-and-go traffic.\u201d<\/p>\n When the discussion of reducing fleet fuel spends arises, modern day technologies are also often brought in the conversation. Telematics solutions<\/a> are far and away some of the biggest drivers that fleets consider when looking to technology to assist, and the technology only continues to get better.<\/p>\n \u201cThe evolution of telematics into a powerhouse tool set for fleet managers can be a business differentiator for those that embrace the technology and mine the data for actionable events,\u201d \u00a0said Register.<\/p>\n The implementation of fuel cards also plays a huge role in helping fleets address fuel spend. Belloli mentioned that having a more robust fuel card system has helped him provide a more detailed analysis of payments on fuel card. He detailed the benefits of Level 3 fuel card data, which incorporated into his fleet operations.<\/p>\n \u201cLevel 3 data includes more info as to station address, quantity purchased, fuel grade, date\/time, PIN and can also include more detailed description of non-fuel items purchased inside station (i.e., windshield fluid vs. candy bar) if fleets allow non-fuel purchases. Level 3 just means more detailed data sent by card company vs Level 2 being more bare bones,\u201d said Belloli.<\/p>\n Register also utilized a fleet fuel card program which has helped create new goals for his company to achieve with regards to fuel spend.<\/p>\n \u201cWe have an ongoing fuel management strategy \u2013 piloting several things such as driver push notifications for lowest cost fuel options based on their location, we challenge our divisions to reduce idle time percentages by asset type and function,\u201d he said.<\/p>\n But beyond what fleet vendors and suppliers can offer, contemporary vehicle technologies are also something that fleet managers might want to consider when looking to curb fuel spend.<\/p>\n \u201cThe single thing we consult with fleets about to reduce their fuel spend, is to modernize their fleet, because those older vehicles are polluters. You\u2019re not taking advantage of the technology that\u2019s happened in the last several years,\u201d said Saltzgiver, CAFS, Mercury Associates, Inc., director business development. Saltzgiver was also previously VP of fleet operations for Republic Services and the Coca-Cola Company.<\/p>\n Considering the aforementioned ideas related to vehicle selection, for example, fleets might want to consider utilizing vehicles that have built-in stop and go technology.<\/p>\n \u201cOn average, every hour of idling is a gallon of fuel used,\u201d Saltzgiver said. \u201cThat idling adds up, and that\u2019s how the automotive manufacturers are combating it.\u201d<\/p>\n According to Belloli, other technological advancements that has helped curb fuel spend in his fleet also includes low-resistance tires, active grill shutters, better vehicle aerodynamics, smaller engines, and light weighting of frames\/parts.<\/p>\n Much of the aforementioned practices cannot simply be done independently by the respective fleet manager. This is where third-party help is necessary, and is ultimately aimed to provide an ideal ROI, beyond just saving fuel costs.<\/p>\n \u201cDo you have a partner or program in place where you are getting good data from whoever you are using to manage that fuel spend? For a lot of people that\u2019s a fuel card company or FMC with a fuel card program in place. And are they giving you reliable data that you can drill down and take a look at to make improvements?\u201d said Clinard.<\/p>\n These companies are also designed to help fleet professionals stay abreast of the changes happening within the industry.<\/p>\n Technology exists to make our lives easier and managing fuel spend for fleets is no exception. It\u2019s easy to acknowledge how much fuel spend can help fleets, but staying current as newer technology is implemented and leveraging the capabilities of said technology can be tough.<\/p>\n \u201cOur industry is evolving at such a rapid pace in the technology space it\u2019s easy to get left behind if you are not staying current. The best way to approach that is through key business partners (vendor relationships) \u2013 once they understand your business you can quickly develop and adapt a technology solution that will provide the best ROI,\u201d said Register.<\/p>\n Considering alternative fuels is also a route for fleets to consider when looking to cut back on fuel spend, but there has to be a realistic feasibility to incorporating the technology.<\/p>\n \u201cDue to our wide variety of fleet vehicle types and the rural settings we operate in there is a very limited use case in our fleet for alt-fuel vehicles,\u201d said Register. \u201cWhere it makes sense in our footprint – in the urban, densely populated areas where our vehicles territory is smaller and there is greater infrastructure to alt-fuel sources. Currently we utilize propane autogas as an alt-fuel source in a small portion of our fleet.\u201d<\/p>\n There is consideration by fleets to factor in alt-fuel vehicles, e.g. if the company has a sustainability initiative and is trying to meet its goals, but for some implementing alt-fuels is considered on a case-by-case basis.<\/p>\n \u201cWe have offered hybrids in the past but they don\u2019t always make financial sense as we are on a 36-month replacement cycle. It\u2019s a case-by-case basis when new models come out,\u201d said Belloli.<\/p>\n Alternative fuel vehicles are, on average, more expensive to acquire, and factoring in maintenance and other unique challenges are things to consider.<\/p>\n \u201cI think the biggest issue you have with alternative fuels right now is the incremental cost on the purchase,\u201d said Saltzgiver. \u201cThose become pricey, and it\u2019s hard to distribute that over the life of the vehicle. When the pricing becomes more competitive, or when fuel costs go higher than they are now.\u201d<\/p>\n He added, however, that there are legitimate applications, for instance, if the fleet is domicile and the vehicles need to return to a central location at a certain time, for example, refuse fleets.<\/p>\n by Andy Lundin<\/a><\/p>\n<\/div>\nProper Vehicle Selection<\/h4>\n
Correct Driver Behavior<\/h4>\n
The Latest Technologies<\/h4>\n
Get With the Program<\/h4>\n
Should You Utilize Alt-Fuel Vehicles?<\/h4>\n
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