FleetMatics occasionally publishes guest posts with interesting content relevant to our audience. Derek Singleton joined Software Advice after graduating from Occidental College with a degree in political science. He writes about various topics related to ERP software with particular interest in the manufacturing and distribution software markets.
Over the last few years, everyone has been feeling the pinch from the rising cost of fuel. Many businesses and fuel procurement offices have assumed that if they could just get past a couple of tough years, that fuel costs will stabilize. If there’s one thing that’s become clear over couple year, it’s that high oil prices are here to stay. 2011 set a record for highest average inflation-adjusted fuel price, and 2012 is projected to keep pace with those levels.
While the high cost of fuel can be a vexing problem for businesses everywhere, it’s can be a major obstacle for shippers and carriers. Luckily, there are a few things that companies that manage a fleet can do to manage the rise in fuel prices. Here are two ways that companies help reduce the impact of high fuel prices on their bottom line.
- Improve Procurement of Fuel – One of the main trends that we’ve seen in the oil and gas market over the last couple of years is increasing volatility. It’s not uncommon for the market to swing five cents per gallon on a given day. If you find yourself on the wrong side of a purchasing decision when buying thousands of gallons of gas, you can quickly bleed money and go over budget. There are some automated solutions, such as FuelQuest, on the market that can help companies forecast demand, monitor on-hand fuel, and procure at the best market price. These solutions can help companies avoid buying at the wrong time and bolster their bottom lines-and they can often save four to six cents per gallon on fuel purchases.
- Better Manage Your Fleet – After making better fuel purchasing decisions, better fleet management is a logical next step. While there are some very impressive new technologies (e.g. eco-friendly engines and aerodynamic trailers) on the market, these can be pricey investments. Where companies can get a far better bang for their buck is in employing highly-skilled drivers that are versed in fuel saving technique such as smooth acceleration and momentum control. A skilled driver can save, on average, anywhere from five to 20 percent in fuel efficiency. Another boon is keeping tire pressures at proper inflation levels as a three percent variance in air pressure impacts fuel efficiency by one percent.
- Plan Routes More Intelligently – A final way save on fuel costs is to better plan the way that shipments are delivered. This boils down to both delivering along more efficient manner routes as well as shipping loads more efficiently. There are a number of technology solutions that have been developed to help fleets shave off fuel costs by planning routes that require fewer miles and fewer stops. One of my favorite examples of how effective route planning technologies can be is how UPS saved on fuel costs by minimizing the number of left-hand turns that drivers make. While was just a minor change in the way UPS delivered their packages, it ultimately wound up saving them more than 10 million gallons of gas.
These are just a couple of ideas on how to save on fuel costs. For more strategies to reduce fuel costs, you can visit the Software Advice – a website that reviews distribution software. The original post can be viewed at: Three Strategies for Reducing Fuel Costs in 2012.
