After depreciation, fuel is the largest cost for fleets. Controlling this often volatile, ever-changing expense is among the biggest challenges for fleet managers.
Truck fleet managers looking for better ways to handle that part of their operation have several tools that they can use to control costs at the pump and during day-to-day operations. Two of the most beneficial are fuel cards and telematics while in-vehicle solutions are also increasing their presence.Fuel cards are the older of these tools, having existed for several decades. But, some high-tech improvements have helped to make fuel cards even more indispensable in running modern truck fleets.
Fuel cards are the older of these tools, having existed for several decades. But, some high-tech improvements have helped to make fuel cards even more indispensable in running modern truck fleets.
Using Fuel Cards
Fleet fuel cards have long been a way for fleet managers to oversee their fleet drivers’ fueling activities and protect the fleet against fraud.
Above all, fuel cards allow the fleet manager to gauge potential areas of improvement and savings.
“The Voyager fleet card is designed for fleets of all sizes and for all class vehicles,” said Ramel Lindsay, Fleet Product Manager at U.S. Bank. “The card can be customized to meet the fleets’ specifications, for example, there is an option for fuel use only, fuel plus other services such as maintenance, car washing, and etc.”
Apart from providing transactional data, fuel cards also provide other data points that allow fleet managers to see their fleets fueling habits and focus on areas of inefficiency.
“The AssetWorks TRIPCard gives fleets control over their fuel and maintenance purchases and provides insights into spending habits,” said Joe Basile, Vice President of Hardware Solutions for AssetWorks.
According to Basile, the fuel card grants fleet managers the ability to compare outside commercial fuel sales to in-house fuel dispensing in near real-time as they occur, which differs from waiting on a once-monthly statement from a credit card provider.
“Thus, the real time data can alert the fleet manager of potential problems before they compound over a long period of time,” Basile said.
Agreeing with Basile is Bernie Kavanagh, VP, North American Fleet at WEX Inc.
“The WEX Inc. fuel card provides fleet managers with the tools to optimize their fuel spending by allowing drivers to find the lowest cost fueling stations,” Kavanagh said. “We generate scorecards that give drivers the ability to compare how they’re fueling against geographic averages, calling attention to potential savings opportunities.”
The ability to choose what the fleet fuel card can be used for helps to streamline the data captured, which is especially useful for fleet managers when it comes time to review reports.
Fleet managers know this too well, sometimes reviewing reports can become a daunting task when the fleet manager has to review hundreds of pages worth of monthly transactions. This creates extra work for fleet managers.
“The fuel card offers control similar to those offered on personal credit cards (e.g., fraud protection). Clients can identify potential misuse or abuse of fuel cards when using the TRIPCard due to its near real-time integration with our Fleet Focus fleet maintenance software program,” Basile said.
Additionally, fleet cards hold drivers accountable for their fuel purchases, fuel use, and tracking weekly miles per gallon (mpg) accurately.
The fleet fuel card serves as a watchdog, in the sense that if a fleet driver attempts to misappropriate fuel or cover up their spending at a fueling station, they will be caught.
Depending on the designated use of the card, whether it’s for fueling only or fueling and other services, each transaction is monitored.
As the fleet driver reports his or her weekly mpg, the fleet manager can weigh that information against the data the fleet fuel card provider generates and reprimand the driver.
“In relation to the fuel card, near real-time monitoring is far superior to detecting potential credit card abuse,” Basile said. “While many credit card companies offer different technologies to detect potential fraud, they revolve around their card use alone — and rarely compare retail purchases to fueling done at in-house locations.”
Fleet fuel cards easily integrate with other systems and programs to create a customized analysis of the fleet’s fueling practices, so fleet managers see how that impacts the bottom line.
Evolving Fuel Management Solutions
Fuel management has come a long way and continues to be an integral part of fleet operations. And, with the help of advances in technology, the process is made easier for fleet managers to oversee. In-vehicle devices and online portals are making their way into fuel management operations.
A trend that is picking up steam is fleets slowly migrating to the radio frequency identification (RFID) realm. RFID is used to tag objects, in this case, the fleet vehicle, and track them.
“The FleetJournal III (FJ3) is an on-board vehicle device that combines fully-automated, hands-free fueling (automatic capture of odometer, engine hours, diagnostic trouble codes, and engine measurements) and it provides fleet managers full confidence that every gallon dispensed has been put in the authorized vehicle (at all in-house fuel sites) as their dispensers will only dispense fuel when an FJ3 installed vehicle is present,” Basile said. “Fleet managers are also guaranteed an accurate odometer and engine hour reading without any human intervention as it is captured automatically from the vehicle’s engine control module (ECM).”
Online platforms help the fleet manager access fuel data and then easily incorporate that information.
“Fleets can do all of their account management online (e.g., set up new drivers, request new cards, change the driver identification number associated with the card),” Lindsay with U.S. Bank said. "And, through Voyager's online portal Fleet Commander Online, they have the ability to view real time transaction data and reports.”
According to Lindsay, there is also a daily account maintenance file for fleets allowing fleet managers to take data and pull that into their systems on a daily basis.
As fleet managers look for more ways to standardize processes, they can turn to programs that help monitor other areas of fleet operations and link them together. In doing so, the fleet manager would get a more holistic view of their operations while also keeping fuel management in sight.
“Fleet Focus can then do the fuel transaction comparisons and the information is available in real-time,” Basile said.
The biggest advantage to online portals, maintenance programs, and in-cab solutions is the passage of data in real time. The fleet manager does not have to wait on reports; he or she can receive notifications of suspicious fueling activity via text message or e-mail. Fleet managers can address drivers and problem areas almost immediately.
Differing from other in-vehicle technology providers, Derive Systems offers fleet managers a software solution through engine calibrations that also helps fleets achieve overall savings.
“Unlike a lot of other turn-key products, we provide a software solution that has customizable elements for each of our clients,” said Tom Kanewske, senior director of Business Development at Derive Systems.
From the start, Derive works closely with customers to understand the specific needs of their fleet in order to create a calibration for them.
By accessing the car’s engine through the OBD-II port, changes are made to a vehicle’s engine calibration to provide peak fuel efficiency. These tweaks don’t take up needed space, don’t add further weight, and don’t require additional manpower to manage.
After taking into consideration fluctuations in fuel prices, Derive Systems guarantees a one-year ROI. “On average, we provide fuel savings of 6-12% to our customers,” Kanewske said.
While significant cost savings is a major advantage of implementing this solution, it isn’t the only one. With Derive’s solution fleet vehicles emit fewer greenhouse gasses (GHG). Plus, with certain modifications such as speed limiters, Derive’s technology can make the vehicles considerably safer.
Solutions like this may prove to be the future of the fuel management space, and it’s important for fleet managers to keep an eye on such a technology.
“While the market has seen fairly large pricing fluctuations as of late, fleet managers still have to monitor total usage and other details such as mpg by vehicle class,” Basile said.
Instead of focusing on driver behaviors, these evolving fuel management solutions put the emphasis on data and the vehicle.
Taking Fuel Management High-Tech
There can be little argument that telematics has changed the way fleets collect and use data to improve fleet efficiency and overall operations.
Chris Ransom, manager of Solution Architects for Verizon Networkfleet, defines the issue of fuel management broadly.
“At a high level, fuel management is just a function of two things: distance and behavior,” Ransom said. “What you do within the distance and behavior parameters really drive what you’re talking about, so if you drive better and drive less, you’re going to use less fuel.”
The solution to the problem of fuel management for truck fleets is pretty straightforward for Toby Weir-Jones, product line management director, FleetOutlook for CalAmp. “There are two parts to managing fuel. The first is the most obvious — use less of it. The second is an extension
“There are two parts to managing fuel. The first is the most obvious — use less of it. The second is an extension of that goal, but is more about yield,” he said. “If a driver has to visit six sites during a day and we can find a way to get him to all six in 7.5 hours instead of 9 hours, the data suggests that he’ll be more efficient in all the driving conditions he encounters that day. It’s a combination of reduced idle time — for example, arriving at the scheduled time so the customer is ready — more consistent over-the-road movement, due to fewer traffic delays and more intelligent routing, and managing driver behavior so we don’t see as much abrupt acceleration and braking.”
Telematics has helped fleets tackle both fuel management and overall inefficiency in a number of ways.
Among the most common are routing efficiency and reduction in idling. The latter, in particular, was a long-suspected waste of fuel, but it took the introduction of telematics and its ability to measure idling to identify the extent of the problem, and take steps to curtail it for fuel and emissions savings.
“Telematics, or GPS vehicle tracking, is especially helpful in achieving greater fleet fuel efficiency by making it possible to better manage routes, vehicle speed, idling time, fuel cards, and vehicle maintenance,” said Scott Sutarik, Business Development, OEM Sales Manager, Geotab Inc.
Elliot Batcheller, VP of Operations for GPS Insight, identified idling as still one of the biggest areas truck fleets can address to limit fuel spend.
“The primary focus for all fleets should be the reduction of true idle time,” said Batcheller. “True idle time is defined as the time a vehicle sits idle with the engine on and without the vehicle’s power takeoff (PTO) engaged. Once an idle time initiative has been put in place and that behavior addressed, speeding and aggressive driving, e.g. high rpm/rapid acceleration are typically addressed as those behaviors result in suboptimal engine performance and thus reduced mpg.”
While idling may have been one of the big revelations about fuel waste in the early days of telematics, WEX’s Kavanagh noted that, for many truck fleets, routing is where the biggest gains in fuel savings have been seen.
“That’s why a lot of time telematics is integrated with some sort of routing tool,” Kavanagh observed. “Some of the newer technology is designed to get a truck back on route from the point it left, not just from the point it’s not at. This is especially helpful in areas such as sanitation where a vehicle may have certain pickup points. Simply getting back on the route would cause them to miss spots or need to backtrack, thus increasing fuel usage.”
This is an example of industry-specific approaches that may net fleets even more efficiency and fuel gains. There are others as well.
“For example, service fleets, (e.g. mechanical contractors, landscapers, plumbing companies, etc.), tend to focus on optimizing their dispatch operations and/or improving the daily service schedules/routes of their drivers to decrease total miles traveled without a corresponding reduction in revenue,” Batcheller said. “Additionally, many organizations are using navigation devices enabled with real-time traffic that are integrated with their GPS devices to route drivers around traffic areas, ensuring higher productivity and less idle time in traffic. Fuel Card Integration has also become a key component of the major TSP’s solutions as it allows for fuel card transaction validation and the identification of fuel slippage in the field.”
Finding New Telematics Frontiers
While routing, idling, hard acceleration and the other well-known causes of fuel waste will continue to be the top of mind for fleet managers. There are new areas that telematics has helped fleet managers identify as a potential area of saving fuel.
Ransom of Verizon Networkfleet noted that “wasted” miles — those miles that are racked up by a driver running an errand or using the vehicle during off-hours are one of the new areas that fleet managers have identified through telematics-driven data collection.
“Technology has opened up many new opportunities for managing fuel better. Now it’s possible to send in-cab alerts to drivers for speeding, idling, and harsh acceleration,” said Sutarik of Geotab. “You can also integrate fuel cards with telematics for better security and management. By having insight into fuel costs and KPIs across the entire fleet you can stay in control and prevent possible fraud.”
It may be getting better insight and management of driver behavior that is the newest, and, perhaps most important, frontier in the area of fuel management and technology, particularly in the areas of gamification and scorecarding.
For Mark Wallin, VP of Product Management for Telogis, connecting the truck, the driver, and the work together is the key formula for increased efficiency. Scorecarding and gamification are a big piece of that.
“A more effective fuel management program must include the driver. If your fuel management goals are related to driver behavior and optimizing routes to drive fewer overall miles, then the ideal is to empower the drivers to achieve those goals. By introducing a gamification app that delivers a daily fuel management scorecard you are empowering your teams to self-correct and introducing friendly competition among those in their groups,” he said. “Everyone wants to be at the top of that leaderboard. You will also find more opportunities to reward and encourage the ones who do well and train the ones who fall short.”
And, gamification and scorecarding have benefits beyond fuel management.
“The ultimate part of gamification in addition to saving fuel is keeping drivers safe — in terms of speeding and harsh braking,” said Joe Castelli, VP Fleet and Commercial Operations, LoJack Corp.
While scorecarding and gamification may be growing in popularity in terms of helping both controlling fuel spend and improving safety and overall efficiency, it still has some way to go before it matures, according to WEX’s Kavanagh.
“We’re just scratching the surface of what the story can be,” he said. “Fueling data tells a fairly detailed story; however, when you add additional data points such as telematics, traffic/maintenance data, etc. it begins to reveal a different picture. This view allows you to impact driver behavior in a meaningful way.”
Showing how the driver’s actions fit into the bottom line is another way that scorecarding is benefiting fleets.
“We believe the driver scorecard is an essential tool to support and develop your employees and give them visibility into how their actions directly impact their paycheck and the company’s bottom line,” said Weir-Jones of CalAmp.
Immediate feedback is another area that will help fleets control fuel cost, according to Sutarik.
“In-vehicle coaching makes it possible to send the driver an alert in real-time so they can correct the behavior immediately. For example, you can tell them to stop idling or speeding,” he said.
Getting the Biggest Gains
Scorecarding and gamification to help monitor and change driver may have some of the biggest gains truck fleets have made in terms of improving fuel management, but for Verizon Networkfleet’s Ransom, the initial, and perhaps biggest, gains in fuel management had a surprising origin.
“The Great Recession of 2008 especially for companies that used vehicles to do their business was their gain,” he said. “They had to work very quickly to manage their entire business better — particularly fuel. Fuel was very expensive in 2008. The No. 1 gain was really to focus them on fuel management — that doesn’t mean they weren’t focused on fuel management at that time — but it was incumbent on businesses that wanted to survive to reduce their costs and do it very, very quickly, and we’re talking about examining more efficient vehicles and alternative-fuel vehicles, and technologies such as fuel cards and GPS, and telematics, and fuel management, and routing software. That was the fastest acceleration of fuel-related technologies I’ve seen in my lifetime. It was the No. 1 gain if you take that out a little bit — the variety or combination of solutions that was really the biggest gain for companies.”
Geotab’s Sutarik sees the ability to have access to real-time data as one of the biggest gains fleets have derived in terms of fuel management.
“This data makes it possible to view trends, concerns, and opportunities instantaneously,” he said. “Having information on fleet and driver behavior gives fleets the tools needed to implement cost savings rapidly as opportunities arise.”
Building on that, diving deeper into the real costs associated with fuel has been another big gain for fleets, according to WEX’s Kavanagh.
“Instead of saying I can get 3 cents at station X or 1 cent at station Y or nothing at station Z, they’re looking at what it’s going to take to get to station X,” he said. “It becomes more than just the price at the station, as it’s really about the true cost of fueling for the vehicle.”
But, all of the benefits of managing fuel may not show up directly on a company (or fleet) balance sheet. Some of the savings and benefits may be more intangible, according to LoJack’s Castelli.
“One that might not show up on the balance sheet is the opportunity for a company to make a green statement,” he said. “It becomes a good promotional opportunity along the lines of my provider is trying to do something for the environment, trying to reduce carbon footprint. This is a heck of a tool to use for a promotional statement.”
Another gain may be more fundamental, according to Telogis’ Wallin. It’s an understanding of how the vehicle, the driver, and the work all fit together. “When you look at fuel management — the way in which you do work — from the way you develop your territories, how do you drive to your job sites, how you determine most efficient route, how do you ensure those routes are best — that work is really driving your fuel usage,” he said. “Having a way to optimize that is another one of those levers you can use to look at your entire enterprise and manage it much more effectively and achieve the fuel savings you’re looking for.”
The next step in truck fuel management is a combining of the best of both worlds in the form of integrating fuel cards and telematics.
“We find that this is the most common integration that customers turn on,” said Batcheller of GPS Insight. “The ability for fleets to monitor their fuel card transactions based on a number of factors, to include the location of the vehicle, to identify fraud and to simplify IFTA reporting for tax purposes is a no-brainer and easily one of the most significant gains in fuel management for fleets as far as telematics is concerned.”