Escalating fuel prices coupled with an uncertain future and a desire to find alternatives to gasoline to reduce the effects of global warming and dependence on foreign oil have prompted many commercial fleets to “go green.” Some are adding more hybrid and alternative-fuel vehicles, such as ethanol (E-85), to their fleet mix. Others have adopted fuel card programs to monitor employee fuel transactions. Still other fleets reduce fuel consumption by purchasing the most fuel-efficient vehicles on the market.

With fuel costs gaining on depreciation as fleet’s No. 1 expense, many fleet managers implement soft-cost strategies to manage fuel consumption, including encouraging drivers to practice vehicle preventive maintenance and regularly check tire pressure.

The following examples describe how two pharmaceutical fleets control fuel costs while helping preserve the environment by “greening” their fleets.

LOCATION: Princeton, N.J.
FLEET SIZE: 6,000 GM and Subaru cars and SUVs.
FLEET MANAGEMENT COMPANY: Wheels Inc.
VEHICLE REPLACEMENT: 36 months / 65,000 miles.
PERSONAL USE: $70/month flat fee.
FLEET ADMINISTRATION: Joe LaRosa

LaROSA

Responsible for a U.S. and Canadian pharmaceutical and nutritional sales fleet primarily consisting the Chevrolet Impala, Equinox, and Uplander, Pontiac G6, and Subaru Legacy, Joe LaRosa, associate director, worldwide fleet administration, Bristol-Myers Squibb (BMS), says safety, utility, comfort, and fuel efficiency are the most important factors in his decision to add a vehicle to his selector. BMS is currently piloting the Saturn VUE Green Line hybrid SUV.

Through the use of flex-fuel (E-85 ethanol) and fuel-efficient vehicles and GM’s Active Fuel Management technology, which automatically and seamlessly shuts down cylinders when additional power is not necessary, thereby conserving fuel, LaRosa predicts that by 2010, BMS will have met its corporate goal of cutting greenhouse gas emissions by 10 percent since 2004.

“The Impala’s a homerun. Our drivers in the Midwest who are utilizing E-85 have had no complaints about the performance of their vehicles,” said LaRosa.

However, the main problem with ethanol is that it is not readily available outside of the Midwest region.

Another issue cited by LaRosa is the 10-percent loss in efficiency compared to gasoline.

LaRosa uses a fuel card program through Wright Express (in the U.S.) and Wheels Inc. (in Canada) to monitor employee fuel transactions. Through Wheels, all vehicles are supplied oil life monitoring systems and tire inflation monitors, where available, encouraging drivers to proactively maintain their vehicles to achieve optimal fuel efficiency.

Twelve years ago, BMS implemented a non-large-SUV policy in the U.S. “We’ve replaced our SUVs with all-wheel-drive Subaru Legacy sedans. We tell our drivers that if they get a Subaru, they have to make sure it fits within their territory requirements of carrying samples,” said LaRosa. “The Legacy is also good in inclement weather; it gets good gas mileage because of its four-cylinder engine, and resale performance is strong.”

LOCATION: Frazer, PA
FLEET SIZE: 775 Ford, Volvo, and Subaru cars and SUVs.
FLEET MANAGEMENT COMPANY: Automotive Resources International (ARI).
VEHICLE REPLACEMENT: 3 years / 75,000 miles.
PERSONAL USE: Unlimited, reported monthly.
SENIOR FLEET ADMINISTRATOR: Dick Prettyman

PRETTYMAN

After Cephalon’s CEO purchased a 2008 Lexus LS600h L hybrid sedan, he placed an inquiry to evaluate the process of converting the pharmaceutical sales fleet to hybrid vehicles “because he believes it is the right thing to do. We have to balance that with the cost and necessity of retaining a sales force,” said Dick Prettyman, Cephalon’s senior fleet administrator. “Cost sides withthe right thing to do now, but losing and retraining a sales force is the overwhelming concern of sales operations. We looked at a complete one-year flip to hybrid, a three-year roll out to hybrid, and an offering for individuals who want to choose a hybrid. No option has yet been selected.”

Cephalon’s fuel card program – through Wright Express – enables fleet management to monitor driver fuel consumption, including station location, fuel prices and grade used, and purchase frequency, through monthly reports. E-mail alerts are sent to drivers who misuse the system.

To maximize fuel efficiency, Prettyman provides tire gauges to drivers. Through a Pep Boys program, drivers are taught how to regularly check a vehicle’s tire pressure. The fleet’s cars currently average 24.6 mpg, while SUVs average 18.2 mpg.

For the 2008-model year, Cephalon will conduct a hybrid pilot program. The fleet will drop its least fuel-efficient vehicles and introduce the Toyota Prius and replace the gasoline Escape SUV with its hybrid counterpart. Cephalon also plans to drop the Mercury Montego and replace it with the Toyota Camry Hybrid and replace the Ford Explorer SUV with the Mercury Mariner Hybrid and Toyota Highlander Hybrid SUVs.

Prettyman figures that at current fuel prices, the company can recover the extra cost of the hybrids within three years. Including SUVs on its selector list may extend the three-year window, according to Prettyman; however, “sometimes sacrifices must be made to help improve the environment.”

Current hybrid resale performance remains a mystery due to lingering questions concerning hybrid battery lifespan, Prettyman admits, noting that Toyota is developing new hybrid battery technology for roll-out in the next two years.

“It’s all a gamble; the fact there are so many unsold Priuses in the market says that maybe the manufacturers have gotten the low-hanging fruit for hybrids and now there’s a real sales initiative that has to be made to sell these vehicles,” said Prettyman. “I think we’ll have to be more creative in marketing hybrids, maybe to internal employees.”

Lacking the infrastructure for ethanol (E-85) and compressed natural gas (CNG), Cephalon instead turned to the strategy of reducing fuel consumption to improve the organization’s carbon footprint.

“If there were more ethanol stations available, more alt-fuel vehicles would be built. Flex-fuel vehicles aren’t being utilized because it’s too difficult to find stations that sell ethanol. We don’t want to make it an inconvenience to our drivers by going out of theirway to search for fuel,” said Prettyman.

In order to continue the goal of improving fuel efficiency, Prettyman suggests that fleet managers get involved by observing employee driving habits.