Managing Your Fleet Fuel Costs in 2012January 30, 2012
Derek is an analyst at Software Advice. He recently had an article run on managing your fleet fuel costs this year, and we’d love to share his advice with our Xata community.
While the high cost of fuel can be a vexing problem for businesses everywhere, it can be a major obstacle for shippers and carriers. Luckily, there are a few things that companies that manage a fleet can do to manage the rise in fuel prices. Here are 3 ways that companies can help reduce the impact of high fuel prices on their bottom line.
1) Improve Procurement of Fuel
One of the main trends that we’ve seen in the oil and gas market over the last couple of years is increasing volatility. It’s not uncommon for the market to swing 5 cents per gallon on a given day. If you find yourself on the wrong side of a purchasing decision when buying thousands of gallons of gas, you can quickly bleed money and go over budget. There are some automated solutions, such as FuelQuest, on the market that can help companies forecast demand, monitor on-hand fuel, and procure at the best market price. These solutions can help companies avoid buying at the wrong time and bolster their bottom lines—and they can often save 4 to 6 cents per gallon on fuel purchases.
2) Better Manage Your Fleet
After making better fuel purchasing decisions, better managing the fleet is a logical next step. While there are some very impressive new technologies (e.g. eco-friendly engines and aerodynamic trailers) on the market, these can be pricey investments. Where companies can get a far better bang for their buck is in employing highly-skilled drivers that are versed in fuel saving techniques such as smooth acceleration and momentum control. A skilled driver can save, on average, anywhere from 5 to 20 percent in fuel efficiency. A great way to bolster these savings is using Xata fleet management software to monitor things like excessive speeding and idling to address fuel inefficient behaviors as they arise.
3) Plan Routes More Intelligently
A final way to save on fuel costs is to better plan the way that shipments are delivered. This boils down to both delivering along more efficient routes, as well as shipping loads more efficiently. There are a number of technology solutions that have been developed to help fleets shave off fuel costs by planning routes that require fewer miles and fewer stops. One of my favorite examples of how effective route planning technologies can be is how UPS saved on fuel costs by minimizing the number of left-hand turns that drivers make. While just a minor change in the way UPS delivered their packages, it ultimately wound up saving them more than 10 million gallons of gas.
These are just a couple of ideas on how to save on fuel costs. For more strategies to reduce fuel costs, you can visit the Software Advice – an online resource for distribution management software. Derek’s original post can be viewed at the Software Advice blog.