Managing the Financial Side of Commercial Fleets

10 Fuel Management Strategies That Really Work

It’s in the news again; fuel prices are climbing and fleet managers are looking for ways to manage that largest variable expense. Here are 10 tested strategies that work.

January 2011, by Staff

Sometimes we all have short memories; it was two years ago, in 2008, that fuel pump prices skyrocketed to in excess of $4 per gallon, and fleet managers saw their fuel budgets eaten up before Thanksgiving.

In subsequent months, prices fell even more quickly than they rose, and fuel expense rolled back to a more comfortable level. Unfortunately, that laser-like focus on managing fuel costs, for some fleet managers, fell with it.

Though it may not be "déjà vu all over again," nationwide average fuel prices at the pump are creeping up, and they're now bumping up against the $3 per gallon mark. Whether prices are rising or falling, fleet managers must put strategies in place to manage fuel costs, now and always. Here are 10 of them that work.

1. Downsizing

It is often the first thing that crosses management's mind when fuel costs begin to spike: "Why can't we just use smaller cars?" It isn't a panacea, but if done right, can be a useful weapon in fighting rising fuel prices. Look for models with both cargo and passenger carrying capacity that can handle the driver's mission. Be very careful about dropping more than one class, however (i.e., from full-size to compact, or from 1-ton to ½-ton in a pickup truck). Once the decision is made, it's difficult to turn back, and you'll be stuck with vehicles that can't properly perform the job, but will often end up costing more than those they've replaced. Try to grab a demo from the manufacturer, and have a driver use it for a few months. Get his or her feedback on how it performs, and if it performs well, add the selection for the balance of the current model year, or to the next one depending upon the timing. Track operating expenses carefully - not just fuel efficiency, but tire life, maintenance, and repair as well.

2. Rightsizing

Rightsizing sounds like some kind of business seminar lingo, but what it refers to is the possibility there may simply be too many vehicles in your fleet. This includes redundant territories, surplus vehicles, or vehicles out of service but not sold. Not all use fuel, but some do, which adds to overall fuel expense.

Check with all field locations and ensure the number of vehicles equals the number of drivers. Branch offices sometimes like to keep a surplus vehicle tucked away for use on various company errands. Don't let them. It is the fleet manager's job to track and manage expenses associated with the operation of company vehicles, not to manage how much a clerk in the office is reimbursed for taking a deposit to the bank, or pick up office supplies. Get rid of these surplus vehicles. Their cost goes beyond just fuel; they must be insured, unless fully depreciated, and then there's a lease or finance cost, tags, inspections - do the math.

3. Keep It Clean

Don't let cars go without regular washing. Dirt, grime, oil, grease, and especially salt can damage the finish, but believe it or not, they add weight as well as increase aerodynamic drag, which reduces fuel efficiency.

This is particularly true in the winter. After it snows, ensure drivers clean and de-ice vehicles from top to bottom and bumper to bumper. Accumulated ice and snow on a car or truck can add 100 lbs. or more to the weight, not to mention limit visibility, creating a safety hazard. Keep ice scrapers and snow brushes handy, or provide them for all vehicles.

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