June 29, 2008

Fuel Management: Ten ways for businesses to cut fuel costs

Ask the Fuel Expert

Jack Lee

Remember the good old days...about a year-and-a-half ago? Prices at the pumps were hovering below the one-dollar-per-litre mark and they stayed that way for weeks.

Well, the good old days are gone forever and today we live in a world where fuel prices seem to go up by the hour. Now pundits speculate on living with oil prices running up to $200 US per barrel.

As consumers, many of us have adjusted our lifestyles. We try to drive less. Some have chosen to car pool, while others have dumped their gas-guzzlers for more fuel-efficient vehicles.

For business, the good old days meant fuel up and go. Little attention was paid to managing fuel. But in the past year, the price of oil has doubled, cutting deeper than ever into profits and causing owners and managers to adopt a new fuel consciousness.

In other words, although you can’t control the price of fuel, you can control your fuel consumption. The answer is Fuel Management.

Any business can improve its fuel efficiency. It starts with a commitment from the head office and cooperation from your people on the road and at the job sites. More and more companies are making changes in their operating practices to cut costs now and to be prepared for even higher costs in the future.

Here are ten strategies that really work.

1. Train and educate your drivers.

It starts with the people who have their foot on the gas pedal. Your drivers can control fuel consumption each time they fire up their engines, and proper training can improve fuel efficiency, economy and emissions.

2. Decrease idling.

Be aware of the time engines idle. No longer can we leave machinery and equipment running all day long. Excessive idling adds to your fuel costs by as much as 50% and can shorten the life of engine oil by 75%, adding more costs.

Initiate a campaign to reduce idling time and reward participants. Allowing an engine to idle more than 3 minutes causes expensive damage which harms efficiency, shortens engine life and increases maintenance costs. It all adds up.

3. Start off slower.

This is another lesson your drivers must be taught. Jackrabbit starts waste fuel and save less than 3 minutes per hour driving, but can result in using 40% more fuel and increase toxic emissions by 400%.

What’s the rush? Ease up on the gas pedal and your efficiencies will improve.

4. Slow down.

Speeding is dangerous, it wastes fuel and creates higher levels of toxic emissions.

Speeds over 100 km/hour drastically impact fuel efficiencies – cars travelling at 120 km/hour use 20% more fuel.

Trucks travelling at 120 km/hour use 50% more fuel and they also emit 100% more carbon monoxide, 50% more hydrocarbons and 31% more nitrogen oxides.

5. Lose weight.

Excess weight places unnecessary strain on your vehicle’s engine and greatly affects its fuel efficiency. By removing as little as 100 pounds you can significantly improve your gas mileage. Check each vehicle and pitch out that unnecessary weight.

6. Use a fuel-management system.

Just paying a monthly fuel bill is not managing your fuel. To begin managing your fuel costs, you need to know how much it really costs to get fuel and be able to track how it is being used.

Did you know that it takes on average 20 minutes for every truck to get fuel every day? In a fleet of only 30 vehicles, that’s at least 10 hours of unproductive time when no deliveries are made and no money earned.

But you are still paying all the costs of fuel just to get fuel, wear and tear, maintenance, insurance and overhead. A fuel management system can eliminate those costs and give you detailed data on how much fuel each vehicle in your fleet is using.

It can even measure overall fuel efficiency, track speeding and idling time and measure greenhouse gas output.

7. Upgrade your fleet.

Whenever possible, invest in modern, fuel-efficient vehicles.

Modern diesel engines are far more fuel-efficient and perform better with modern diesel fuels such as ultra low sulphur diesel and biodiesel.

Though it may seem expensive, new diesel vehicles can save thousands of dollars in maintenance, fuel and productivity per vehicle.

Measure each piece of equipment for fuel efficiency and get rid of the bad ones. Replace and upgrade your equipment regularly. It may hurt now but it will pay you back.

8. Tune-up vehicles regularly.

Do you have a stringent, well-managed maintenance policy? Many companies “fix it when it breaks.”

This attitude costs too much in wasted fuel.

A well-maintained vehicle performs better, improves fuel efficiency, reduces toxic emissions and, in the long run, will cost less to maintain.

9. Pump it up.

Proper tire inflation improves gas mileage. Statistics show improperly inflated tires can cost up to 2 weeks worth of fuel per year.

How big is your fleet? Two weeks per year per vehicle adds up to thousands of dollars in lost profits. In addition, proper inflation results in improved vehicle and braking performance and increases tire life.

10. Implement advanced mobile asset management technology.

You can measure and manage your fleet better when you have the right information.

Tracking miles traveled, average speed and engine efficiency is critical to cutting fuel costs. This information will help your drivers and managers optimize routes with better planning.

Mapping software and GPS will eliminate thousands of unnecessary miles per week. Less time on the road means less fuel consumed, less wear on vehicles, decreased expenditures and overall increased productivity, plus lower toxic emissions.

Mostly, reducing fuel costs is just a shift in mind set – from buying fuel to managing it. It’s also about dropping bad habits and becoming more conscious of fuel use.

Adopting a fuel management strategy or finding a company that can help you manage your fuel is the right route. Stick with it. The effort is worth it. Fuel prices are only going up.

Jack Lee is the President and CEO of 4Refuel, specializing in fuel management solutions. More information is available at www.4Refuel.com. Please send your questions and comments to FuelExpert@4Refuel.com.

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