Of all the expenses a fleet faces, fuel can be one of the most difficult to control. Prices fluctuate constantly, and many fleet managers find themselves at the mercy of the marketplace. But there are ways to keep fuel expenses under control. For Jerry Albertini, senior manager, corporate fleet services, for Simplex Time Recorder in Westminster, MA, information was key to cutting fuel costs. By researching the lowest prices by fuel provider and shifting market share with the company's drivers to these companies, Albertini has managed to save the company $15,000 to $20,000 monthly in fuel expenses.
"We've been able to shift our buying preferences about 19 percent since we started this, so we've been pretty successful at moving people to other brands," Albertini said. 'At one point, about 60 percent of our fuel was bought through the name brand providers. Now, we're down to about 40 percent."
To obtain the data, Albertini contacted his fuel card provider, which keeps track of fuel expenditures, to request that the company's monthly fuel report be broken down by company, so prices could be compared by company.
"Each month, we watch very closely the usage of the card, in terms of regular unleaded, as well as any other type of fuel that's purchased through that card, whether it's mid-grade or premium fuel," Albertini said. "What I watch in particular is the number of gallons and the dollars each month spent on all the various oil providers, whether it's the major companies or the secondhand third-tier providers."
These comparisons showed that second- and third-tier providers' costs per gallon were, on average, at least 10 cents per gallon less than those of the major providers. While 10 cents per gallon may not seem like a big deal, when multiplied by thousands of gallons that most fleets use annually, the savings can be significant.
"There's no question that buying fuel from second- and third-tier providers makes a difference," Albertini said. "It's generally about a 10- to 11 -cent per gallon difference nationwide on average. By shifting the buying preference from the top five to the others, we're saving 10 cents a gallon, and we can drive the same number of miles for less money. It really adds up. By shifting our buying preferences totally to second- and third-tier providers, we can save an additional $15,000 each month with our fleet - down from $45,000. By shifting everybody from the high five providers, it's a potential savings of $30,000 to $45,000 monthly or $400,000 annually. So, I keep working the issue and moving market share where possible. We've reduced our potential savings to less than $15,000 per month with our current campaign. Our next marketing effort will be to further shift our buying preferences to the lowest cost second- and third-tier providers every month," says Albertini. "One thing is certain -marketing and creativity can produce significant results."
"I do an average of what we spend, what I call my high five providers, which is the five highest cost providers, and what the percentages we buy each month through them are, and the average price per gallon of those five. Then I compare that with all the fuel we buy through the second-and third-tier providers; the total gallons we buy through them, and the average price per gallon."
Once the information was gathered, the next step was to relay that information to the company's drivers in the field. This was accomplished with the addition of a special section titled The Fuel Wise Report in the company's Fleet News newsletter each month, which also details how the company is performing in relation to the national averages, benchmarks, and safety related areas.
"I project the price information in a newsletter back to our field to let them know what we spent needlessly on fuel, because we bought it from the major providers," Albertini said. "I let everyone know where we're wasting fuel and dollars. That information goes out in the Fleet News newsletter, summarizing what we spend, and here's how we could have driven more miles for the same dollars, by just shifting our marketing preferences from the heavily marketed fuels to the second- and third-tier providers."
Another strategy to save on fuel expenses is to purchase the most fuel-efficient vehicles possible for each application. This could mean alternative fuels, such as CNG, fuel-efficient gasoline vehicles, or hybrid vehicles, which use a fuel-efficient gasoline engine in combination with an electric motor. Hybrid vehicles, such as the Toyota Prius and Honda Insight, get 50 or more miles per gallon and never need recharging.
Windell Mitchell, fleet manager for King County, WA, has effectively used this approach to reduce fuel expenses.
"One important way we have reduced our fuel expenses is to look at the type of vehicles we're purchasing," Mitchell said. "We are purchasing more fuel-efficient vehicles, and right now we're looking at purchasing hybrid vehicles, such as the Toyota Prius, which use a combination of gas and electricity. We are looking to purchase 50-60 Priuses this year alone. They get a much higher mpg, and difference in price is not that significant, when you look at the total dollar savings in fuel. When you look at total lifecycle costs, you're much better off purchasing those vehicles."
Another way to minimize fuel expenses is to closely monitor your monthly fuel card reports, looking for non-fuel purchases and premium fuel purchases, which can significantly raise costs.
For Debbie Powers, fleet administrator for Sunkist Growers Inc. in Sherman Oaks, CA, this is an important part of the monthly routine.
"You have to monitor your fuel report, to make sure that it isn't out-of-whack every month," Powers said. "For example, to make sure that every Friday night, they're not picking up a six-pack and a pizza along with their fill-up." Powers said exceptions are monitored with the monthly statement. "The monthly statement tells you if it's fuel or a car wash, or something," Powers said. "If it was something other than what the company could code, it says 'other.' Of course, then I can call the driver and say, 'You have an other charge on your gas card, and I need to know what that other is."
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