How Fuel Prices Are Affecting Fleets
REDWOOD CITY and TORRANCE, CA - Pricelock and Automotive Fleet magazine partnered to conduct a survey of commercial and government fleets to gain their insights on fuel pricing and on fuel price protection programs. Survey respondents in total included fleet managers, executives, directors, and others who work at small, medium, and large companies as well as managers in government fleet operations.
The survey found that 99 percent of respondents are concerned with fuel prices this year. When fuel prices rise, 65 percent stated that their company is forced to absorb higher fuel costs and that only 16 percent pass those costs on to their customers.
The top two concerns that fleet managers had were fuel efficiency, 44 percent of respondents, and an inability to control fuel costs, 40 percent. Nearly three-quarters of respondents are willing to have drivers go out of their way to save 25 cents per gallon, and 25 percent of those said they would have drivers travel 5 miles or more.
When it comes to fuel usage, 50 percent of commercial fleets use only gasoline, and 34 percent use a mix of gasoline and diesel. More than 70 percent of government fleets use a mix of gasoline and diesel.
The survey also looked at differences among industries, specifically automotive/transport and construction and how those industries compare to the different industries surveyed overall. In the automotive/transport industry, fleets absorb 44.7 percent of fuel cost increases. In the construction industry, fleets absorb nearly 10-percent more of fuel-related costs, at 54.1 percent. Both industries showed they absorb less in fuel costs than companies in other industries. In addition, both pass on more of their costs to customers. Fleets in the construction industry are able to pass on 24.3 percent and in automotive/transport industry they pass on 23.7 percent.
Of respondents in the construction industry, 43.2 percent said high fuel costs for their fleet impacts negatively impacted earnings. In the automotive/transport market, nearly a third, 31.6 percent, said fuel costs hurt earnings.
When it comes to major concerns fleets have about fuel, construction industry fleets are more concerned about fuel efficiency, with 55.3 percent saying it’s an issue. Among automotive/transport fleets, only 29.3 percent said fuel efficiency is an issue, well below the 44 percent of overall respondents who said they are concerned. Interestingly, in the automotive/transport market, 53.7 percent of fleet managers and other managers involved in fleet said they have no way to control fuel prices, which could contribute to them being less concerned with fuel prices overall.
Although 31 percent of overall respondents said they considered implementing a fuel hedging program, only 35 percent have actually implemented such a program. These tend to be firms with large fleets and high volumes of fuel usage, the survey found.
The online survey began January 20, 2011 and was closed February 18, 2011. A total of 451 people participated in the survey (±4.5% margin of error at a 95% confidence level).
You can download a PDF of the entire survey for free here: 2011 Pricelock Fuel Pricing Survey
Note that results concerning specific industries are not included in the survey linked to above.