How to Effectively Reduce Fleet Fuel Costs
As a fleet manager, one of your top priorities is to keep fuel spend as low as possible. Not only that but to always be on the lookout for new and effective methods to reduce fuel spend even further. It’s a daunting part of your job, no doubt, especially considering the massive fluctuations in gasoline and diesel prices over the past decade.
In this intensive, deep-diving article we will take a close look at how to effectively reduce fleet fuel costs. That includes all of the various methods and best practices that are being used today in many different industries. We will also provide actionable suggestions and ideas that you can use to reduce the fuel costs for your particular fleet. When finished, the ideas and methods you’ve learned can be turned into immediate actions that will lower your fleet’s fuel spend significantly. Enjoy.
Part 1- The Right Vehicle for the Job
Nothing says ‘fuel waste’ like larger, gas-guzzling vehicles being used when smaller, lighter, gas-sipping vehicles could be used in their place. Yes, many fleets will have several different types of vehicles being used regularly. Also, many of those vehicles, by design, are larger and use more fuel.
But the fact remains that some, maybe many vehicles in any given fleet could be reduced in size with no noticeable difference in the tasks that they perform. Below are a few examples of the wrong vehicle being used for the wrong task, as well as some solutions for correcting the situation.
Adding Hybrid Vehicles to your Fleet
Wherever possible the use of ‘green’ hybrid vehicles if highly recommend. This is especially true for vehicles that will be used in a suburban or urban setting. Not only do they use less fuel but, since hybrids produce fewer greenhouse gases, they’re also better for the environment. Also, there are federal and state government incentives that can lower the cost to purchase and/or lower the amount of taxes paid per vehicle.
Reducing or Eliminating Personal Use of Fleet Vehicles
Many organizations allow their employees to use vehicles from their fleet for personal use. In some instances, this is given as an added incentive and in others, it might simply be necessary. On the other hand, there are many situations where employees are allowed to use fleet vehicles and abuse the privilege, using them for more than is allowed, and using fuel in the process.
There is also the problem of insurance and accidents which, inevitably, do happen. If vehicles in your fleet are being damaged or destroyed the cost to repair and/or replace them could put a huge hole in your budget. It could also increase your organization’s insurance costs substantially. For these reasons reducing or eliminating personal use of fleet vehicles is a financially sound move that fleet managers often make. It could also save your organization a bundle on fuel.
Ride-sharing and Carpooling
Depending on your company or organization’s industry you may have situations where several people need to be transported from one location to another frequently. Under these circumstances, it would be best to arrange for one vehicle to do the transporting rather than several, for obvious reasons. Not only will it save fuel but, while underway, there is a good chance that ideas will be shared, solutions will be developed and relationships will be built that could very well benefit your company.
Reducing the Weight of Unnecessary Tools and Materials
It goes without saying that the more a vehicle weighs the worse gas mileage it will get. In many cases, the employees driving the vehicles in your fleet will tend to accumulate a lot of extra, unnecessary tools and materials in their vehicles, especially in the construction industry. Many of these tools can be quite heavy and bulky.
A good idea is to instruct your people to remove anything that’s not 100% needed to perform the job at hand. Also, to clear out vehicles on a regular, ongoing basis. You should also create a directive that only job-related tools and materials will be allowed in company vehicles. Occasional inspections would be a good way to enforce these rules, at least until you feel that they’re being followed.
Purchasing Long-distance Vehicles with a Cruise Control Option
Several studies have shown that constantly increasing and reducing speeds on the highway can waste upwards of 10% of a vehicle’s fuel. While cruise control Is not recommended to use in an urban setting, on the highway being able to set a speed and stick with it could lead to substantial fuel savings.
Choose Crossover Vehicles instead of SUVs
You might think that the difference between an SUV and a crossover-type vehicle would be negligible but, in fact, crossovers provide equal, or better, performance while costing less and using about 11% less fuel. Feature-wise they are about equal also, making the choice of crossovers over SUVs an easy one.
The same goes for minivans vs mid-size sedans. The typical mid-size sedan can hold just as many passengers, doesn’t need to be up-fitted, and gets better gas mileage than a minivan. Remember, you want to get the smallest vehicle that will do the job correctly without it being more than is absolutely necessary.
Tighten the Rules for Company Vehicles
Depending on the industry your organization is involved in the number of employees who earn the right to use company-provided vehicle might be rather large. While the rules for this vary from company to company, 12,000 miles a year seems to be the average minimum to be eligible for the privilege. Again, depending on the industry and the size of your fleet, increasing this number to 15,000 miles a year (or more) would reduce the number of marginal drivers using a fleet vehicle. This would then reduce your fuel and fleet costs, possibly by quite a few dollars.
Putting in Place a Training Program for All Drivers
One of the biggest problems when trying to reduce fuel costs is that the most important aspect of vehicle control is often completely out of your control; the driver. If your fleet drivers are out on the road driving erratically, making jackrabbit starts after every stop, and not following best practices while driving, they can waste an awful lot of fuel.
That says nothing to the fact that, if your fleet drivers aren’t following the rules of the road, they could be endangering themselves and others. The risk of accidents increases as well as liability and the loss or damage to a vehicle. It’s for these reasons that a training program should be part of your organization’s normal routine whenever a new driver, or employee who will drive a fleet vehicle, is hired.
Part 2- Better Regulating the Purchase of Fuel
Depending on the size of your organization’s fleet your fuel spend every month might be massive. The challenge in this situation is regulating who, when, and where fuel can be purchased so that you can control and track fuel usage best. In most cases, this involves setting rules for everyone who drives a fleet vehicle to follow or implementing a system that they all must use.
Below are several excellent suggestions and ideas that you can put in place that will help you to regulate and control fuel usage across all the vehicles in your fleet. With controls in place, your job will be much easier and you might also find more ways to reduce fuel costs from the data you receive.
Creating a Fuel Management Program
If your organization doesn’t have a fuel management program already in place your first task is to put one in place, pronto. Without a fuel management program, with its accompanying rules and regulations, you have virtually no control over the fuel expenditures being made by the drivers in your fleet. Once you do, however, the amount of control you have will increase substantially over several important factors;
- Who can (and can not) purchase fuel
- Where fuel can be purchased, specifically
- What type of fuel can be purchased
- What time of day fuel can be purchased
- How fuel can be purchased
Issuing Fuel Cards for the Entire Fleet
One of the best ways to track fuel costs (and thus better control them in the long run) is to issue a fuel card to everyone in your organization. That would go for anyone who drives a vehicle and purchases fuel for that vehicle. The numbers and data that you will get when the entire fleet is using fuel cards will be immense, no doubt. However, there are many different software programs that you can use to makes sense of the data. The best part is that, once you have all that data analyzed, it can open your eyes to areas where fuel is being wasted, overused, or pilfered.
Setting Rules for the Use of A/C
There’s no doubt that using the air conditioner in any vehicle increases the drain on the engine and lowers the fuel economy. Truth be told, if you are in an area of the country where the heat is oppressive, this might not be a viable plan. There’s a point in which the comfort of employees outweighs the extra fuel used by using the A/C. That goes double for men and women working in high-stress industries such as law enforcement, emergency services, and so forth.
That being said, it must be noted that air conditioners reduce gasoline efficiency by upwards of 20% depending on the vehicle type and size. One suggestion is to enforce a 72�F rule to minimize the use of air conditioning as well as informing drivers to not use air-conditioning in place of air vents and windows when possible.
Use GPS Vehicle Tracking Devices
GPS vehicle tracking provides several excellent features and benefits for managing fuel costs. It is also relatively simple and inexpensive to put a vehicle tracking system into any size feet. The benefits of GPS vehicle tracking are as follows:
- They can track vehicle maintenance and performance
- They can track trip distance, parking and idle time, fuel usage and speed
- They can track the performance of a particular driver
- They allow for improved fuel management
- They can prevent the theft of a vehicle
- You can get a report (and analysis of that report) for each vehicle in the fleet
GPS vehicle tracking might be one of the most cost-productive changes that you can make to a fleet. The data it can provide can tell you if, for example, one of your drivers is stealing gas, driving erratically or parking and idling for hours on end. Yes, some drivers are against being tracked but, frankly, as a fleet manager, this shouldn’t be your concern. Drivers that are performing their job correctly and following rules and procedures have nothing to fear from GPS vehicle tracking devices and the data they provide.
Using Fuel Hedging to Better Control Fuel Costs
If you are the fleet manager for a large, multi-national fleet, you might want to look into fuel hedging. Frankly, we aren’t going to go into fuel hedging because most of the fleet managers who will read this article won’t be involved with the type of massive fleets that can benefit from this practice. No offense to the excellent and experienced fleet managers reading right now but, If you’re in charge of a massive, multinational fleet of vehicles, you’ve likely heard of fuel hedging already and know how it works. Plus, for any fleets smaller than that, fuel hedging probably won’t be possible due to the very large investment costs involved.
Using Only ‘Regular’ Fuel, not ‘Premium”
Here’s a fact, premium gasoline has absolutely no benefit over regular gasoline whatsoever, especially in a vehicle that’s been calibrated for regular unleaded. Unless your fleet is made up of Lamborghinis, Maseratis, and other high-end performance cars, there’s no reason to let your drivers purchase premium gasoline. As a fleet manager, you will see gasoline costs drop substantially when your fleet vehicles are only using regular gas. Why? Because premium gasoline is usually between $.10 and $.25 higher per gallon depending on the area of the country where your organization is located.
Directing Drivers to Purchase Fuel in the Morning (when possible)
Frankly, the validity of this tip is not 100% guaranteed. However, Kelly Blue Book does suggest buying gasoline in the morning. The reason; gasoline is denser in the morning. Since gasoline is sold based on volume, not density, buying it when the weather is colder means more gas will be dispensed. Of course, in many cases, it simply won’t be possible to purchase in the morning as a vehicle’s fuel might run dry in the middle of the afternoon. Plus, and again being frank, the savings here are probably negligible (no matter what Kelly Blue Book says).
Part 3- Maintaining Your Fleet to Save Fuel
So far we’ve looked at the drivers who are driving the vehicles in your fleet and the gasoline that is fueling those vehicles. In this section, we will take a look at another important factor that can reduce fuel costs significantly; Fleet maintenance.
It goes without saying that a well-maintained vehicle that is running in top condition and at maximum efficiency will use significantly less fuel. Below are some of the methods and techniques that you can use to stay on top of maintenance and make sure that every vehicle in your fleet is running strong
Putting Preventive Maintenance Measures in Place Fleet-wide
One of the best ways to keep a vehicle running efficiently is to make sure that it never has a chance to run inefficiently. Preventive maintenance means bringing in vehicles before, for example, their tires go bald or they are 1000 miles over the limit for their next oil change.
Wheel alignment, air filters, engine coolant, and many other parts can all “go bad” relatively quickly depending on where your fleet is located. Putting preventive maintenance measures in place across the fleet will keep these things from happening and keep all of your vehicles running in top condition. In turn, this will reduce fuel costs significantly.
Removing Extraneous Devices from Vehicles
A lot of extraneous devices can cause drag that reduces fuel efficiency and increases consumption. Objects like bug deflector shields, flags, ‘car bras’, and more should be removed in order to increase efficiency. Also, this will keep all the vehicles in your fleet looking consistently the same.
Reducing the Time that Vehicles in the Fleet Sit at Idle
Much of what we’re talking about today deals with increasing the mileage that the vehicles in your fleet can attain. It goes without saying that when a vehicle gets 0 miles per gallon, that’s not a good thing. However, when a vehicle is idling in place, that is exactly the amount of miles per gallon it’s getting: zero. Some might not believe that idling uses all that much extra fuel. Let’s take a look at some facts that dispel this notion:
- The same amount of gasoline is used to idle for 30 seconds than is used to restart the engine.
- Idling not only uses gasoline but also puts more wear and tear on the vehicle’s engine
- Idling is actually tougher on a vehicle’s engine than restarting the engine
- Idling creates more greenhouse gases then if the vehicle was turned off, obviously
- An engine at idle uses about half a gallon of fuel every hour
Some of the solutions that you can put into effect to reduce idling include:
- Directing that, for stops of more than 30 seconds, the engine be turned off
- If your drivers are going to eat fast food direct them to park and go inside rather than use the drive-through window. This also goes for using the bathroom, talking on the phone, etc.,
- Purchase vehicles with the new Start/Stop system included. This system automatically shuts the vehicle off when it is stopped and immediately restarts the engine when the driver re-engages the accelerator.
Increasing the Aerodynamics of your Fleet Vehicles
Anything that causes drag on a vehicle will cause the engine to work harder and thus reduce fuel efficiency, sometimes drastically. In fact, the faster a vehicle is going, the more fuel is wasted if that vehicle isn’t aerodynamic.
Now, while you might believe that the vehicles being made today have been designed by engineers to be incredibly aerodynamic, that’s not always the case. Indeed, there are plenty of SUVs, vans and trucks on the road that have incredibly poor aerodynamics. The question is, what can you do to increase their aerodynamics and reduce fuel consumption. Below are several excellent methods:
- Direct that your drivers keep their windows rolled up at all times. At highway speeds, the aerodynamic drag caused by a wide-open window can decrease fuel efficiency by upwards of 10%.
- Have aerodynamic mirrors installed on your vehicles
- If your fleet consists of several pickup trucks, make sure that the tailgate is always up. Even better, make sure that they use a tonneau cover.
- Purchase fleet vehicles that have been designed to provide excellent aerodynamics
Direct Drivers to Check Tire Pressure Frequently
Did you know that an underinflated tire can reduce fuel economy by 2% for each pound of pressure below the recommended level? At 4 to 5 psi below the recommended tire pressure, fuel consumption increases by a whopping 10%. Even worse, the more pressure is lost, the more fuel is used. That doesn’t even include the fact that you can reduce the life of a tire by 15% when it is underinflated.
Statistically, 1 out of every 4 drivers is operating a fleet vehicle with at least one tire that is underinflated. If you are managing a large fleet the amount of fuel that is possibly being wasted could be enormous, as well as the extra cost per year to purchase new tires. Besides implementing a directive to check tire pressure frequently, providing a fuel pressure gauge to every driver is an excellent idea.
Part 4- Miscellaneous Tips to Reduce Fuel Spend and Increase Efficiency
The rest of the ideas, methods, and advice that we have today covers several other factors and areas where you can possibly reduce fuel consumption and increase efficiency.
Providing Fuel Saving Tips to Fleet Drivers
One thing a competent fleet manager does is communicate regularly with all of their drivers. Whatever communication platform you use, sharing fuel-saving tips with your drivers is a great idea. Everything from avoiding jackrabbit starts to when is the right time of day to purchase gasoline.
This should also include things that you might assume drivers would already know but, let’s be honest, nothing good ever comes out of assuming. For example, maintaining posted highway speeds, using safe driving habits, and, as we’ve mentioned already, checking their tires to make sure they are properly inflated.
Putting Together an In-House Fuel Reduction Team
Depending on the size of your organization and the number of subordinates that do you have working for you, putting together an in-house fuel reduction team could be a fantastic idea. Of course, if you are managing a small fleet for, say, a local law enforcement agency or food delivery service, that might not be possible. If it is, however, having a few extra hands to help you implement fuel-saving procedures and programs can be a lifesaver.
Use Routing Software to Reduce Mileage
Depending on the industry that your organization is in and the type of fleet you are managing, efficient routing could save you quite a bit in fuel costs. Proper routing can significantly cut down on the mileage that your vehicles are seeing and thus reduce fuel costs while also increasing time efficiency. Optimizing trip routing also reduces the amount of backtracking and unnecessary travel while in turn reducing the wear and tear on your vehicles.
Better Anticipation of Daily and Weekly Traffic Flow
Nothing reduces fuel efficiency and increases fuel usage more than vehicles that are stuck sitting in traffic. This is especially true for larger vehicles but can be a fuel waster with smaller vehicles as well. Today there is software that can forecast what traffic will be like on any given day of the week, allowing your fleet vehicles to do their best to avoid it.
Depending on the town or city where your fleet is working, you might also consider sending them out at different times of the day to avoid traffic altogether. This is similar to, for example, employees who go into work at a later time to avoid rush-hour. In any case, the more that your fleet vehicles can avoid sitting and idling in traffic (and wasting fuel) the better.
Keep a Sharp Eye on Fuel Prices
If your fleet is large enough that your organization purchases fuel in bulk, keeping an eye on the ever-changing fuel market is vitally important. Fuel costs have a tendency to go up and down rather sporadically. If you’re keeping an eye on them, you will notice when the prices drop significantly and be able to purchase fuel at that time. The resulting savings could be significant.
Take Advantage of Technology
This last bit of advice goes to the fact that today there is a myriad of software programs that can help a fleet manager to do their job better. From GPS tracking to data analytics and more, as a fleet manager, it behooves you to use as much software as possible to make your job not only easier but more efficient and effective. If reducing fuel costs is your goal, today’s modern software is the key to reaching that goal.
As we stated at the beginning of this article, one of your most important tasks as a fleet manager is to monitor, control, and, whenever possible, reduce the amount of fuel that your fleet is using. The techniques, methods and tips that you’ve just read should very much help you to do just that. Some will be more applicable to your particular situation than others, no doubt, but all of them have some value.
If you have any questions about this article or need advice, please let us know and someone will get back to you ASAP.