When fleets take a proactive approach to fuel management, making even just a few tweaks can reap rewards. Always be sure to look at the total cost of ownership (TCO) when determining powertrain...

When fleets take a proactive approach to fuel management, making even just a few tweaks can reap rewards. Always be sure to look at the total cost of ownership (TCO) when determining powertrain selection. 

Photo: Gettyimages.com

Fuel management has always been a priority of fleets. That’s not surprising considering that fuel is typically a fleet’s largest budget line item. With fuel prices currently at historical highs, an effective fuel management strategy is more important than ever.

Beyond the rising cost of fuel, mixed fleets face the additional challenge of not being able to adopt a “one size fits all” approach. But that doesn’t mean they don’t have opportunities to improve. These tips can help fleets with multiple vehicle classes and fuel types manage fuel better.

1. Dive Into Data

Data can help fleet managers make informed decisions about managing fuel for any vehicle type. Equipping vehicles with telematics is a common way to collect that data.

“Data will help make the best decisions for you and your fleet,” said Brian Fournier, Americas SVP & GM, Fleet for WEX. “Telematics provides actionable insights that can help fleet managers improve their fleet’s performance, including fuel management. Fuel management professionals can leverage data and create an integrated, holistic approach to fuel management to deliver the most success.”

Fournier said that leveraging analytics tools can help fleets get a complete picture of their fuel program. Using analytics and telematics can help fleets:

Better understand fuel consumption and efficiency by vehicle or fuel type.

  • Identify outliers with lower-than-normal mpg that could be replaced with more fuel-efficient models.
  • Understand which makes and models offer the best fuel efficiency.
  • Compare the performance of different fuel types.
  • See how many gallons of fuel electric vehicles are saving.
  • Determine the alternative-fuel vehicles’ ROI (investment vs. fuel savings) compared to their gas or diesel counterparts.
  • Reduce the number of miles traveled.

“Telematics is increasingly becoming a vital tool for fleet managers. It helps monitor unnecessary miles driven and time wasted on activities not related to the job by individual fleet drivers, allowing for optimization of routes that save on mileage,” said Jim Perkins, director of sales and marketing for Shell Fleet Solutions.

Fournier suggested a few places to use telematics as part of a fleet’s fuel management strategy.

“Set up vehicle profiles and review individual vehicle performance against the established vehicle profile,” he recommended. “Take time to review the analytics tool, set up control reports and purchase alerts that identify driver abuse and fraud — closely monitor major metro areas prone to fraudsters.”

2. Use a Fuel Card

Fuel cards are another way mixed fleets can gather data that can provide valuable insights into fuel costs, reduce fraud and misuse, and control how much and what fuel users can purchase, all of which can reduce fuel costs and help fleets better manage their fuel.

“Taking advantage of fleet cards is the simplest strategy for all fleet managers. A fleet card program can help fleets save money immediately and provide valuable insights into fuel costs,” Perkins said. “For example, the most well-known feature of the Shell Fleet Card is that users can save up to 6 cents per gallon at nearly 13,000 Shell stations, but it also helps control and track fuel purchases, which can help prevent fraud and misuse. Fleet cards can provide foresight for future fuel purchases and help determine if a fleet vehicle is operating at maximum fuel efficiency.”

Fournier said that when fuel card data is used with other tools, fleets have an even better picture of the opportunities to improve.

“Fuel cards with limits and controls, telematics, and other analytical tools provide insights into performance and fuel optimization,” he said.

3. Pay Attention to the Price at the Pump

Another data point to pay attention to is the price per gallon at fueling stations. Fournier said the station drivers choose have a significant impact on fuel spend, regardless of what type of asset they’re driving.

“The price of fuel for a mixed fleet at the dispenser is the most objective way to measure and realize savings,” Fournier from Wex said. “When reviewing available data, you will find a significant variance in the price of fuel, sometimes as much as 30 cents per gallon, in the same metropolitan area. Remain diligent in pursuit of the best price that doesn’t disrupt your fleet’s operations. Don’t spend all your time chasing the sign price without using the data you already have to make your decisions.”

4. Skip Trips to the Station

Driving out of the way to get to the fueling station with the best price can waste fuel, but sometimes fleets can save money on fuel by skipping trips to the station altogether. With on-site mobile fueling, the fuel comes to the fleet, not the other way around.

“On-site mobile fueling is another service starting to grow among fleets. Shell TapUp allows fleets to save money by fueling fleets on-site. In doing so, fleets aren’t driving out of their way to stations to fill up. This can reduce mileage and increase productivity, helping fleets save on regular wear and tear to vehicles,” Perkins said. “Our Shell TapUp program has found success among mixed fleets and is a popular option since we provide a variety of fuels, including gasoline and diesel.”

5. Involve Employees

The way employees drive can have a significant impact on fuel economy. Behaviors such as speeding, harsh braking, and excessive idling all waste fuel. Other such factors as the route employees choose, how well they keep tires inflated, the station they visit, and how diligent they are about maintenance also play into fuel spend. Telematics can help fleets identify and correct these issues with drivers.

“Fleet managers can utilize telematics to monitor and enable coaching to avoid idling, assist with route optimization, and help find and fix issues costing fleets at the pump,” Shell’s Perkins said.

Armed with data, fleets can then work to improve driver behavior. One way fleets can do this is to educate drivers on which behaviors can save fuel, then provide incentives to drive more fuel-efficiently.

“I recommend setting up driver campaigns for employees where savings opportunities have been identified. Implement driver reward programs to instill the proper driver behavior. Send email campaigns to your employee population sending a positive message, but also driving home that performance is being monitored,” Wex’s Fournier said. “At the end of the day, driver engagement is critical. It’s important to remember the driver of the vehicle is making the buying decisions so we have to do our best to encourage the right behaviors.”

Specific to delivery fleets, Fournier said some save fuel by changing their hours of operation. “For large metro areas, we’ve also seen hours of delivery shift to non-peak to avoid congested areas, wasteful idle time, and make it easier to access alternative fuel locations,” he said.

6. Evaluate Electric Vehicles

Depending on the vehicle application, electric vehicles (EVs), hybrid electric vehicles (HEVs), and plug-in hybrid electric vehicles (PHEVs) can be an option for fleets to cut fuel costs significantly. Although the up-front cost of the asset may be higher and infrastructure investments are likely necessary, there is still a fuel-to-cost advantage.

Fuel economy for these vehicles is measured in miles per gallon of gasoline-equivalent (MPGe) and kilowatt-hours (kWh) per 100 miles. According to the Department of Energy, today’s light-duty all-electric vehicles (or PHEVs in electric mode) can exceed 130 MPGe and can drive 100 miles consuming only 25–40 kWh.

HEVs also typically achieve better fuel economy and have a cost advantage compared to their conventional counterparts. For instance, FuelEconomy.gov lists the 2021 Toyota Corolla Hybrid at an EPA combined city-and-highway fuel economy estimate of 52 miles per gallon (mpg); compared to the estimate for the conventional 2021 Corolla (four-cylinder, automatic) that rings in at 34 mpg, that’s a massive fuel saving.

Of course, the fuel economy of medium- and heavy-duty all-electric vehicles and PHEVs can vary greatly depending on the load and duty cycle.

Fournier said electric vehicles have a lower cost per mile and can offer more stable pricing, both of which can aid a fuel management strategy.

“EVs are far cheaper to drive than gas-powered vehicles. Nationally, gas-powered vehicles are three to five times more expensive to drive per mile than EVs, according to the Zero Emission Transportation Association,” he said. “Electricity prices are also much more stable and increase more slowly than gasoline and diesel prices, especially if looking at the past year.”

7. Choose Charging Stations Wisely

When it comes to powering electric vehicles, when and where a vehicle is charged can affect costs.

Some utilities charge a lower rate during off-peak hours, so charging vehicles overnight can be cheaper. Fournier of Wex said with vehicles that stay parked for longer periods can reduce costs by using cheaper L2 chargers.

“Compared to public charging rates and DCFC installations, lower power capacity L2 chargers are more affordable and use lower electricity rates,” Fournier said. “Residential electricity is the cheapest fuel available to fleets, so fleet managers with corporate fleets and service vehicles that can go home should explore at-home charging options with their drivers.”

8. Run Total Cost of Ownership for Alternative Fuels

Although the price per gallon of some alternative fuels may be higher, Fournier said looking at the total cost of ownership (TCO) is the true test of whether alt-fuel vehicles can reduce costs.

“Don’t manage your fuel costs in isolation; understanding the total cost of operation is foundational for contemplating alternative fuels,” he advised. “I suggest running TCO assessments on fleet vehicles for traditional internal combustion engines, plug-in hybrid, and full battery-electric equivalents. Take the time to consider if your vehicle make and model, mileage, and use case should have lower fuel and maintenance costs to justify a higher purchase price for alternative fuel vehicles.”

Prices Are High, But Action Can Offset Them

When fleets take a proactive approach to fuel management, making even just a few tweaks can reap rewards.

“In today’s marketplace fuel prices are, unsurprisingly, top of mind for fleet managers,” added Perkins of Shell. “However, there are plenty of ways to reduce costs.”

About the author
Shelley Mika

Shelley Mika

Freelance Writer

Shelley Mika is a freelance writer for Bobit Business Media. She writes regularly for Government Fleet and Work Truck magazines.

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