Reducing Fuel Expenditure Is The Key To Maintaining Profits

During the recession many companies turned to fuel management solutions to decrease their monthly expenditure and help improve cash flow. Whilst the economy is showing signs of recovery it is vital that companies maintain their fuel economy to keep hold of the savings they have made. UK wide the second largest expense during the recession was fuel costs, and so to function effectively going forward the same caution towards fuel expenditure needs to be applied.

Fuel cards are one option that can be used, and are really simple and effective. They allow fleet managers to look at who is buying their fuel where, who has the best miles per gallon performance, and how many litres are being bought in each transaction. From the data from fuel cards, fleet managers can see if there are any anomalies in miles per litre performance. A common reason for this occurrence is that the employee is not driving their vehicle very ‘fuel efficiently’. Action needs to be taken by the employer to counter this; such as driver training courses and education on the effects that speeding, harsh acceleration and engine idling have on the vehicle’s fuel performance.

From fuel card reports, fleet managers can direct their employees to the cheapest forecourts. Although the cost of all fuel is rising, there is still a degree of variation in the price per litre being offered in forecourts around the UK. This is another common reason that one employee would have a higher miles per litre ratio than their colleagues. Research has found that in April this year fuel prices at different forecourts differed by up to 10p a litre. For a fleet where the average consumption per year is 30,000 miles, this is a large variation in price, and it is clear that money can be saved by identifying the cheaper forecourts.

As the first signs of economic growth occur, we are finding that fleet managers are keeping their focus on fuel management, rather than focusing on other areas of their role, because the cost of fuel is getting so high. For even a small fleet of mobile workers the cost of purchasing fuel per month is reaching into thousands of pounds. The financial pressure of fuel costs has opened fleet manager’s minds as to the savings that they can make with a good fuel management system.

Other key factors in fuel management are; purchasing more fuel efficient vehicles, employing smarter working practises (such as route optimisation), and installing vehicle tracking systems. Employees may like to be involved in searching for a more fuel efficient vehicle, as they will often use their company vehicle for personal journeys and as a result of a more efficient car, they will owe the company less money in expenses. From speaking to our customers we have found that employees ‘sign up’ to fuel management techniques much more enthusiastically if they are given an option to be involved. The training that they receive is likely to be remembered, and adopted, much more easily.

Route optimisation can cover things as simple as encouraging your employees to give each other lifts to work, to planning routes to avoid congestion at the time of day employees are travelling, although the later is much easier with a vehicle tracking system. Businesses can help their employees with route optimisation by encouraging them to conduct more business by email, phone and web services such as Skype, rather than face to face communications, which are not always necessary. Finding more efficient ways to ensure that customer/employee meetings are not cancelled on route, even if it does put a little more pressure on admin staff, can mean the difference between paying bonuses from one month to the next.

To many businesses a vehicle tracking system is the ideal solution not only to reduce fuel expenditure but to help improve overall fleet management. Many of the leading tracking systems include features that allow fleet managers to monitor their employees driving performance. As mentioned earlier in this article speeding, excessive idling and harsh braking & acceleration are some of the most common examples of inefficient driving. A vehicle tracking system is able to monitor this kind of driving behaviour and generate reports offering greater insight into where employee driving habits need to be improved. A statement that is often quoted by tracking suppliers is “if a company is able to save 1 litre of fuel per day, per vehicle then the tracking system will pay for itself”.