The Car and Truck Fleet and Leasing Management Magazine

Controlling Fuel Costs

September 2006, by Chad Simon

A fuel management roundtable, held at this year’s National Association of Fleet Administrators (NAFA) Fleet Management Institute (FMI), in Orlando, Fla., focused on how commercial fleet managers can control fuel costs and improve fuel efficiency in today’s era of escalating fuel prices. Participants included: Tammy Karr, fleet manager, Iowa Glass Depot, Inc., based in Cedar Rapids, Iowa, with more than 750 vehicles; Karen Freeman, fleet manager, Siemens Shared Services, based in Iselin, N.J., with 14,754 vehicles in North America; Henry Paetzel, manager automotive fleet services, General Mills, Inc., based in Minneapolis, with 1,500 vehicles; and Pat Turner, fleet manager, Alcon Laboratories, Inc., based in Fort Worth, Texas, with 1,000 vehicles.

Iowa Glass Depot Uses Fuel Cards
To combat high fuel prices, more fleet managers are turning to fuel management programs. Karr uses the Wright Express (WEX) fuel card to monitor driver behavior, fueling, and purchases, and to ease data management. Cards are assigned to a vehicle, rather than the driver, to prevent drivers from fueling personal vehicles. Each driver is assigned a PIN code to prevent fuel theft by another driver. With the national fuel price average hovering over $3 per gallon, fleets are starting to dump their minivans and SUVs, normally used as a hiring and retention tool, and opting for smaller, more fuel-efficient cars. “Because we’re looking at switching to smaller vehicles, we’re starting to offer driver-paid options, which we never allowed them to do,” says Karr.

Siemens Upfits its Trucks
Also a WEX customer, Freeman uses the service to monitor driver behavior, including both fuel and non-fuel purchases. Siemens’ fleet uses upfitted fuel-efficient trucks for carrying equipment. Freeman also suggests drivers find the cheapest stations nearest to them, “without driving 20 miles to save 5 cents.”

General Mills Charges for Personal Use
Allowing employees personal use of company-provided vehicles and how to charge them is another hotly debated issue. At General Mills, Paetzel permits drivers personal use of their vehicles and charges a fixed cost per month. Paetzel also evaluated hybrids for possible fleet use, but found that at 40-45 mpg, it doesn’t pay for the extra cost of the vehicle.

Alcon Boosts Employee Morale
Turner agrees that hybrids are not the answer to saving money. “The overall motivation for hybrids can’t be based on fuel economy. The real attraction is for those who are environmentally concerned.” Turner also found that by switching to smaller cars, his drivers can significantly increase their mpg; however, he says that it’s tough to economize on fuel by taking away SUVs “because the money you save from going from a mid-size SUV to a sedan is nothing compared to what you’re going to lose in morale and sales.”

Be Proactive
Many fleet managers request that drivers proactively increase fuel economy by driving slower, minimizing hard accelerations and braking, eliminating idling, checking tire pressure, emptying the vehicle of unnecessary tools, checking motor oil and filters, and purchasing the least expensive fuel grade.

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