Without fuel, a vocational truck, van, or SUV isn’t going anywhere. Managing fuel costs and use is extremely important when it comes to budgets and fleet expenses.
“With fuel accounting for 60% of a fleet’s total operating costs, it’s important for managers to have visibility and insights to manage it best,” said Tim Murray, director of sales for Shell Fleet Solutions.
What is a Fuel Management Program?
A fuel management program offers better visibility into fuel behaviors, allowing fleet managers to control and monitor fuel consumption, as well as its associated costs.
“By encouraging efficient driver behavior and implementing an effective data-driven solution, fleets can better manage fuel expenses — as well as factors that affect it — in real-time,” said Murray of Shell Fleet Solutions.
Ethan Sweeney, director of Customer Success for Vnomics, noted that “a fuel management program is a great way for fleets to not only reduce their operating costs and emissions but also productively increase driver engagement.”
Even with lower prices per gallon the past few years, fuel remains one of a fleet’s largest monthly expenses.
“Gaining control over that spend is a balancing act that involves managing vehicle schedules, driver behavior, regulatory requirements, and data management. A well-designed fuel management program typically involves software and telematics that help an operator integrate their many moving parts into a ‘system’ that provides greater visibility into their fuel use. Therefore providing greater opportunities for increased fuel efficiencies, higher driver productivity, and better reporting,” said Jim Pederson, VP, North America National Sales for World Kinect Energy Services.
And, just like the term, Charlie Mahoney, business development for Derive Systems, noted, “just like the term, reviewing all aspects of sourcing, acquiring and dispersing along with consuming is all part of this role.”
A fuel management program drives cost savings by allowing businesses to accurately track fuel spend, correct costly driving behaviors, perform preventive maintenance, monitor for fraud, and boost sustainability, Murray added.
According to Jim Pederson, VP, North America National Sales for World Kinect Energy Services, the benefits of a fuel management program include:
- Greater control over fuel use, including unauthorized use and theft prevention.
- Ability to track use by driver and or vehicle.
- Improved visibility into driver behavior and fuel consumption.
- Easier access to data for reporting.
“A well planned and managed fuel management program will not only reduce fuel consumption, costs and emissions but also increase driver engagement,” Sweeney said.
Elements of a Successful Program
Every successful fuel management program has clearly defined achievable goals actionable by drivers.
“Elements include insight and planning for the operation along with understanding that while most fleet professionals have visibility of the assets, most cannot control the driver,” said Mahoney of Derive Systems.
The result of achieving those goals will have a positive impact on the fleet, whether it be lowering operating costs, reducing carbon footprint, and/or improving driver engagement and retention, according to Sweeney of Vnomics.
“Management of the program requires accurate and relevant data with clearly defined, easily communicated, and relatable KPIs that are completely under the control of the driver. This last point is important — drivers need to know that they are being measured on what is within their control. Otherwise, the program can lead to frustration,” Sweeney said.
By gaining access to valuable usage metrics and fuel data in real-time, according to Murray of Shell, the elements of a successful fuel management program include:
- Insightful reporting to identify areas for improvement.
- Practicing efficient driving habits, such as reducing time spent idling and following the speed limit to avoid wasting fuel.
- Using quality fuel and oil products to extend the lifetime of a vehicle.
- Performing proactive maintenance regularly to ensure vehicles are operating at peak performance, which helps reduce fuel consumption.
- Utilizing telematics to avoid fraudulent fuel skimming that often takes place at the pump through vehicle tracking.
- Supporting sustainability by reducing a fleet’s carbon footprint.
The elements of a successful fuel management program will also include “seamless integration with back-office systems, ease of implementation and use, cloud-based software with Smartphone access, and low to no maintenance,” said Pederson of World Kinect Energy Services.
Tips for Creating a Program
Starting with a well-planned program is essential. Like a building: if the foundation isn’t strong, everything can fail. Start by setting a baseline.
“Document your existing fueling processes. Include an inventory of the vehicles that need access to your onsite fuel, the type of fuel they burn, and more,” said Pederson of World Kinect Energy Services.
Next, identify your challenges.
“What data are you missing? Where do you lack visibility? What fuel-related tasks are still manual, such as fuel tickets and back-office data entry,” Pederson added.
Technology is here to help with consistent advances and data analysis tools.
“There’s a lot of extremely intelligent technology out there that provides the data needed to design, implement, and manage a successful fuel management program. It may be available as a software add-on to your current telematics solution, which makes it easy to employ and manage,” said Sweeney of Vnomics.
When designing your fuel program, make sure the goals are clearly defined and actionable by those responsible (most often drivers).
“The result of achieving the goals of your program should also align with and have a positive impact on the organization, whether it be lowering operational costs, adding to the success of green-initiatives, or improving driver engagement and retention. Buy-in from the entire organization, from the top down, and clear communication about the program (early and often) is critical to the success of a fuel management program,” Sweeney said.
Don’t go it alone. Particularly in the fuel management area, many partners can help you create, update, or manage your fuel program.
“Find a trusted partner who knows your business and understands the unique challenges you face to help identify a solution catered to your specific needs,” said Murray of Shell Fleet Solutions.
Mahoney of Derive Systems agreed, adding, “If you are a member of a fleet association, you can find best practices from others that have paved the way and paid the prices for earlier adoption.”
And don’t forget to talk to your current supplier about what they offer.
“Many suppliers offer storage and management solutions that can be leased or built into a fuel agreement. Do your research,” said Pederson of World Kinect Energy Services.
If you already have a fuel management program, it is essential to consistently review your program to ensure you are getting the savings and management benefits you expect. At a minimum, an annual review should be performed.
“It is also important to review as your company and/or fleet size grows. Tank sizes should be relative to fuel delivery needs,” said Pederson of World Kinect Energy Services. “How does their current program line up with what makes a program successful? Know what is important to your operation — and adjust accordingly. For instance, cloud-based programs make it much easier to review and to reconcile from the road. Is that important to you?”
Reviewing your program more often can help increase the potential benefits and identify issues sooner.
“We recommend looking at your programs quarterly. Just like having a flight plan, making adjustments quarterly is an essential part of any program, be it fuel management or others where costs can have an impact on your operation,” said Mahoney of Derive Systems.
Use technology to accurately determine opportunities for improvement and/or potentially replace legacy metrics and KPIs that aren’t entirely under the fleet or driver’s control.
“After you have determined opportunities, define goals that are actionable and aligned with the overall organization’s objectives. Get buy-in from the entire organization (top-down), design a roll-out and management strategy, and communicate it (early and often),” said Sweeney of Vnomics.
Murray of Shell noted a recently increased reliance on fleet fueling data.“Many businesses realize their approach is outdated when they cannot easily collect and process their seemingly countless sources of data. Without the right controls and data, a fleet manager may not have visibility into what drivers are purchasing, significantly impacting the bottom line,” he said.
The Bottom Line
Accurate data is the best way to effectively manage any aspect of fleet operations, and fuel no exception.
“Identify the right fleet solutions provider to bring to light innovative tools and services that reduce operating costs and ease fleet management, including the implementation of a successful fuel management program,” recommended Murray of Shell Fleet Solutions.
You can’t discuss any topic right now without looking at the impact the COVID-19 pandemic has had.
“The global recession brought on by the Coronavirus pandemic has placed a heightened awareness around company spending. Since fuel is one of the largest fleet operating costs, fleets have become more focused on finding an effective fuel management approach to positively impact savings,” Murray added.
Mahoney of Derive Systems added that customers have shared drivers are idling longer driving up vehicle operating costs and driving down vehicle mpg.
For some fleets, onsite fueling is mitigating that extra touchpoint.
“Onsite fleet fueling is when a fuel supplier delivers directly into your vehicle’s fuel tanks. Deliveries are typically scheduled when a fleet is ‘home,’ day or night, so drivers come to work, and your fleet is ready to go. Onsite fleet fueling also offers more accurate fuel usage by vehicle, as well as fewer issues with tank regulations, insurance, and contamination,” said Pederson of World Kinect Energy Services.
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