Best Practices in Managing Fuel Spend

Have you ever heard of the three-body problem?

It’s a classic physics dilemma and thought experiment, a mathematical quandary akin to Schrodinger’s Cat. The three-body problem refers to planets and the layman’s version is this: the position of any two planets in orbit can be calculated down to the millimeter due to the immutable laws of physics. Introduce a third planet, however, and all conventional laws of physics fly out the window, begging the question, “Does physics even matter?”, and maybe on a more existential level, “Is all my good work in a field I love completely meaningless?”

It’s been known to drive scientists bonkers. Maybe you can see where I’m going with this.

In an age where fuel costs are soaring, new vehicles are as rare and costly as uncut diamonds, and the labor shortage drives longer down times, higher repair prices, and longer vehicle cycles, managing fuel spend among every other responsibility can be like trying to solve the three-body problem in fuel, infrastructure, and cost. 

“How do you best use what’s available to you?” asks Arnie Braun, senior director of fleet operations at Cox Automotive. Braun manages about 15,000 vehicles in the fleet.

“We first target reduction in idle through telematics,” he says, “and that’s the start, but there are other root causes that could make a significant impact. How do you identify the factors that drive fuel cost? Routing vehicles efficiently is key, and in today’s world, how do you resolve service calls digitally? Do we need a technician to go out during every call? For almost two years, many people didn’t want anyone in their homes.”

For many fleet managers, the “YouTubeification” of technical, service-oriented calls has added another ball in the air to an already stressed system. But Braun notes that fleet managers don’t work in a vacuum. “We’re constantly trying to operate well, keep technicians available, and keep our customers safe, happy, and healthy.”

Thankfully, less routes means less fuel burned. Braun says routing technology has helped bring clarity to the many metro-type calls his fleets make. “Look at how your business models have changed over the last two years. Were our salespeople just as effective on Zoom or are able to solve customer tickets without sending a technician out?”

Braun says Cox has looked at other solutions as well; he tried some aftermarket equipment with varying levels of success. Braun says speed monitors to limit vehicles worked, but that many seemingly small cost savings need to be reviewed; “Saving $100 on fuel per year also has to be weighed against other impacts such as maintenance, safety, operator efficiency, and sustainability goals.  

Braun stresses the long-known factors for his fleet, such as properly inflated tires and driver behavior. He notes that, “As much as 30% of fuel economy is in your driver’s foot,” and that telematic data can help control speed, improve safety, and yield excellent PM scores.

Looking ahead, Braun is certain a future of alternative fuels may help mitigate some of today’s fuel challenges.  

“We’re trying to target markets where we can harness renewable fuel sources,” he says, “and we’re looking at Tier 1/Tier 2 impact and trying to understand what’s next. For now, ROI can be tough to achieve, so we have to take appropriate steps forward - including piloting various technologies -  and continue to focus on all of the factors that are in our control.” 

 

Let the Tool Do the Job

Like Braun, Abe Stephenson has been in the fleet industry a long time. Stephenson is the fleet and administration manager at Dish (~3,500 vehicles) and after 15 years has some experience handling adversity in fuel costs.

“Several of my strategies haven’t changed,” he says. “Several times per week we report on all fuel transactions – have we hit certain criteria and/or thresholds? Any fueling events larger than tank capacity per vehicle? Fuel cards can only be used three times per day.” 

Stephenson says he monitor after-hours reporting and that skimming has become more of an issue since the onset of the pandemic. 

“Even though we get all that money back when we file those claims, I’m looking forward to chip reader upgrades across the board. When fuel cards all have chip readers, that should offer more security. Fueling behavior matters - how much weight are we carrying per vehicle? If we convert to new product or carry new product, we’ll save a dollar per year for every pound we reduce and dollar more per pound per year. 

Stephenson also mentions the challenge of simply employing people in the long-term. “A high-turnover environment yields drivers immune to laws of accumulation,” he explains, “so I’d rather let the tool do the job. We use Derive on our GM vehicles. We also use inhibitors.”

Stephenson notes that Stellantis doesn’t allow some products and/or services on their vehicles, which became an unexpected challenge for his ProMasters, which feature some of the best cargo space within his fleet. He says using services such as Derive was one of the largest fuel-saving strategies he’d seen to date, and that he also likes how Mobileye helps prevent tailgating and sudden starts and stops, reducing accident rates and keeping vehicles on the road. as to offer.

As a service fleet, he says the aerodynamics of ladder racks, ladders, and other top-vehicle gear is terrible for fuel economy. “Ladder rack upfitters don’t seem terribly concerned about that, though ours is working on a lighter, more aerodynamic solution,” he says.

“If you save me one mile per gallon, that’s gold! We’ve made decisions on which vehicles to acquire based on that alone – that savings can trump an entire lifecycle forecast for competitive vehicles.”

He also says the WEX fuel app helps his team find the lowest-cost stations in the area. “Without adding extra drive and talk time, how can we find those opportunities? We employ many remote technicians who work out of their homes need to know where those stations are.”

Stephenson says he ended the year conducting a fuel station usage analysis incorporating data from the app and other telematics solutions as well as a survey of his team; where do they fuel? How often? Where and why do they refuel during high-volume times?

Using telematics, Stephenson notes one factor of contemporary fuel management that’s entirely manageable is engine idling. “Managing that program can pay up to half of our GPS costs/program. We have goals in place for that, and it’s a primary data point for us to look at.”

With high turnover – roughly half of the fleet vehicles every year – keeping a close bead on how, why, and how often fuel is bought and consumed is another reason Stephenson keeps things simple and tries to let the vehicles and their suite of technology and telematics help him do the job.