The seasonal spike in fuel prices has come early this year and unlike backyard barbeques and beach days, this summer tradition is less than welcome, particularly to fleet managers. Prices typically rise as refineries switch to more expensive summer-grade production and demand increases with more families hitting the road, but this year, we are seeing gasoline and diesel prices hit four- year highs before Memorial Day with some states already creeping toward $4- per-gallon. Fleet budgets are undoubtedly going to take a hit with fuel spend, but there are some steps managers can take to mitigate the impact.
Managing idle time is the easiest and most effective way to reduce fuel spend and realize meaningful savings in a relatively short period of time.
Unfortunately, as temperatures increase, so does the desire to keep the air conditioning running and that comfort can be costly. According to the U.S. Environmental Protection Agency, an idling passenger vehicle wastes 0.5 gallons of fuel an hour and a heavy-duty vehicle can waste as much as a full gallon an hour. If drivers can find a convenient place to step inside for paperwork, phone calls, and other non-driving-related tasks instead of sitting in a running vehicle, it will go a long way to reducing idling times.
Idling also has a negative impact on engines, reducing efficiency and increasing maintenance costs. Adjusting behaviors to cut idling down by even just 10 minutes a day can result in significant savings in both fuel spend and maintenance.
Standard preventative vehicle maintenance can significantly benefit fuel economy and overall operating costs. Some studies have shown that keeping up with regular maintenance can also improve fuel efficiency. Oil changes, filter replacements, and maintaining proper tire pressure require little downtime and will keep vehicles running at peak efficiency.
Manage and Monitor Fuel Spend
Fuel programs through fleet management companies include using fuel cards as a spending control, data capture and reporting, and real-time price monitoring. Fuel cards may be issued to individual drivers or be assigned to vehicles in a pool. They can be restricted to pay-at-the-pump transactions only, and all transactions are monitored and reported so managers can keep track of and flag issues such as a purchase exceeding tank capacity or someone buying premium- grade fuel. Real-time price monitoring is a particularly powerful tool that allows fleet managers to keep tabs on average costs per gallon and per transaction and which vendors have the best prices so drivers can be directed where to fill up.
Address Aggressive Driving
Aggressive driving behaviors such as harsh acceleration, speeding, hard braking, and weaving in and out of traffic can also reduce highway fuel efficiency.
Today’s advanced telematics systems have specific features to address idling as well as these potentially costly and even dangerous driver behaviors. Fleet managers can monitor and tackle these bad habits that not only affect fuel consumption but can also pose safety concerns and even hurt a company’s brand. One tip is to leverage in-cab audible alerts focused on aggressivedriving events. Providing drivers with real-time feedback on inefficient behaviors is effective in reducing fuel spends and improving safety.
Educating drivers about the behaviors that contribute to increased fuel consumption and introducing incentives to improve are keys to affecting
change. Real-time telematics data and driver alerts can help modify driver behaviors by providing immediate feedback such as warning the driver that idling time has surpassed a pre-set limit. Once a fleet has telematics installed, vehicle and driver data can be collected and used to set a true baseline against which to measure improvement. Companies can then set realistic goals everyone can buy into.
At the individual operator level, driver scorecards capture everything from idle times to hard braking and managers can use the information to incentivize drivers to improve. At the organizational level, aggregated data give the big picture for how the fleet is doing as a whole, so everyone can see progress and work together toward achieving the overall goals.
Best Practices Pay Off
The hope is that fuel prices will level off and eventually migrate back down, but hope is not a strategy for managing a fleet’s largest line item. Putting best practices into place to mitigate the effects of today’s spiking fuel prices will continue paying off as a cost-control strategy and as an environmentally responsible one as well. Fleets of all sizes can realize significant cost savings with even minimal changes in driver behavior and regular vehicle maintenance.
About the Author
Brad Jacobs is director of strategic consulting at Merchants Fleet Management where he partners with clients to identify short- and long-term cost savings through optimized lifecycle management, policy development, analysis, and technology implementation.