Fuel is one of the largest and most important expenses for businesses. Fuel efficiency is critical With fluctuating prices and fleet managers under pressure to reduce costs. Though some cost factors are outside a business’s control, many strategies exist to reduce fuel expenses. The right fuel management system and policies help you optimize fleet fuel spending with better reporting, streamlined accounting, and real-time data.
Track Your Fuel Expenses
Fuel is one of the largest line items in a fleet’s budget, so it’s no wonder that managing it can be a challenge. However, it’s important to consider how your company can improve its operational and budgeting processes to control fuel costs. With the right tools, fleet managers can spend their time logging mileage, tracking receipts, and submitting manual expense reports. In addition, the lag between purchase and expense data entry can create significant problems. The process is easier for everyone involved with a mobile capture or logistics software solution. Instead of waiting for drivers to return their trip envelopes filled with crinkled receipts, they can upload them instantly, and processing is done in the background.
In addition, other simple changes can reduce the amount of fuel your company uses. For example, by shifting to a three- or four-day workweek, you can help employees avoid extra trips and save on gas. Other strategies include scheduling shifts outside peak traffic hours and encouraging employees to take public transportation or carpool.
Use a Fuel Card
Big or small businesses can save time and money by using fleet fuel gas cards. Fuel cards provide a more secure payment method while providing access to various account tools and card limits that reduce the risk of misuse. Additionally, many programs offer a wide network of gas stations for convenience and cost savings. Fuel cards allow managers to access key reports online immediately, unlike cash or credit cards, which require manual expense reports and lag times. It can significantly cut down on expense processing time. Fleet management fuel cards also allow for various controls, such as daily spending limits and odometer tracking, which can help prevent unauthorized purchases.
Moreover, if a driver attempts to use the card for personal purchases, an alert is sent so that an exception can be made and the account frozen. It can ensure that company-owned vehicles are used for business purposes only. Lastly, some fuel cards even provide rebates on gas for drivers, which can add up over the long run.
Redesign Your Distribution Network
A product supply network must balance cost efficiency, service levels and growth. But achieving this balance can be difficult. For example, when a consumer products company with 14 far-flung distribution centers set about redesigning its network, managers were conflicted over what the best model would look like. To clear up those misperceptions and get everyone on board, the leadership team employed advanced digital simulation tools to help managers understand the optimal company distribution footprint. The company downsized and reshaped its network, reducing costs significantly and improving service levels. It also averted tens of millions in unnecessary investment.
Every year, more than 6 billion gallons of diesel fuel and gasoline are wasted by vehicles that aren’t moving—and that’s in addition to all the harmful emissions these engines produce. Fleet managers can take various steps to minimize wasteful idling in their vehicles. Idling guzzles fuel at varying rates depending on the engine size and type, but it’s estimated that half a gallon of fuel is used for each hour a vehicle is idling. That adds up to a large amount of wasted fuel for your fleet and a drain on your bottom line. One strategy is to educate drivers on the importance of turning off their engines when they’re stopped for extended periods, such as when waiting in a drive-through line. Another is to offer incentives to encourage drivers to be mindful of their idling habits and reduce the amount of fuel their vehicle consumes. Vehicle optimization software also allows fleets to reduce unnecessary idling by optimizing the idle RPM of their trucks. On average, companies that use such a tool save 6 to 10% on fuel within their first month.
Encouraging Fuel-Efficient Driving
Fleet managers can make big improvements to fuel efficiency by focusing on both the vehicles and the driving habits of their drivers. Organizing friendly competitions that reward fuel-efficient driving can motivate drivers and help them save gas money while reducing their environmental footprint. Some common strategies for encouraging fuel-efficient driving include routing the most efficient routes possible, using fleet telematics to encourage more eco-friendly driving habits, and keeping vehicles light by limiting personal cargo and eliminating unnecessary equipment. Routine maintenance can improve fuel efficiency by ensuring that tires are properly inflated, and engines operate at peak performance.
In addition, avoiding higher-cost fuels is another key way to minimize the fuel your fleet consumes. Ensure that all drivers know to steer clear of full-service and premium fuels (unless the vehicle requires them), as these typically cost several cents per gallon more than self-service and regular unleaded. Mobile app technology can also help drivers avoid high-cost fuels by directing them to the nearest and lowest-cost options.