How fleet managers can reduce or even eliminate fuel use
Fuel represents approximately 60 percent of total operating costs for the average fleet. This means that for Fleet Managers who want to optimize their operations and reduce costs, it’s a prime target for reducing or eliminating entirely.
As fuel prices can fluctuate significantly, this makes fleet operating expenses volatile. Over the past couple of years, low fuel prices have helped many fleet managers to reach their P&L targets, but as prices creep back up with market uncertainties, this will again become a concern for many. Price volatility can also make it hard to accurately predict what your operating costs will be, adding pressure to many businesses as fleet expenses directly affect the bottom line.
From an environmental perspective, many businesses have established targets to reduce their carbon footprint. For those organizations with large fleets, savings must be found in fuel use in order to meet these targets.
Audit Current Fuel Usage
Before you can set realistic targets to cut your fleet’s fuel consumption, you must first establish baseline data in order to know exactly how much fuel you’re currently using.
You’ll need data for a significant period to smooth out any seasonal fluctuations or irregularities, with a year being the optimum amount of time. However, if you don’t have access to a whole year’s worth of data, you will be able to get started with data from one quarter.
Getting baseline data for fleet fuel consumption can be incredibly simple if your business operates its own tank where all vehicles fill up from. It becomes harder when vehicles fill up on the road or the fleet consists of company cars or employee-owned vehicles (a grey fleet).
Many fleet managers use fuel cards to track usage or take mileage data for company cars and grey fleets from employee mileage claim submissions and convert this into fuel use.
If your fleet has a telematics system fitted in all vehicles, then you can pull simple reports of fuel usage for the entire fleet, and also on a vehicle by vehicle basis.
Strategies for Reducing Fuel Use
Reduce Fleet Mileage
The simplest way to reduce fuel usage is to cut mileage. For service fleets, this entails undertaking route optimization exercises to identify outlying jobs, incompatible timeslots, crossover between routes, and extra miles traveled to avoid traffic hotspots. A mileage management system can result in savings of up to 10 percent of fuel costs.
In order to do this, you must first collate and monitor data on your fleet’s mileage and routes to identify areas for improvement. This requires a vehicle telematics solution that utilizes GPS tracking to record real-time vehicle locations. Routes can be replayed to allow dispatch to analyze route structures and identify inefficiencies.
Route optimization doesn’t just reduce fleet mileage, but also speeds up route completion times, releasing driver hours for productive work. And since depreciation, lease costs, accident, and maintenance costs are all proportional to miles traveled fewer miles travelled results in lower secondary costs.
Even getting lost notably increases mileage and fuel costs. Fitting company vehicles with a sat nav system can save many wasted miles and a lot of wasted time.
Encourage Alternatives to Driving
If your fleet consists of company cars that employees use to attend meetings, incentivize the use of videoconferencing, which is increasingly accepted as an alternative to face-to-face meetings. You could also mandate the use of public transport where a journey is easily achievable by bus or train.
If the fleet consists of company cars, the implementation of remote working days could also be considered to reduce employees’ weekly commuting mileage. Some businesses have implemented an additional mileage allowance for employees who take another employee to work, with a tax-free payment to the passenger so that both parties are incentivized to ride share.
Consider other methods of financing travel; instead of providing a fuel or vehicle allowance, some organizations provide employees with a travel allowance that can be used across a wide range of transport options. If the allowance isn’t used within the month, the remainder to be refunded or exchanged for another benefit.
Where employees do receive a mileage allowance, it’s also important not to reimburse mileage above the approved allowance rates. Otherwise, this can financially incentivize drivers to drive more miles.
Driver Training and Engagement to Instill a Fuel Saving Culture
It can be a great challenge to engage employees in fuel saving strategies, especially for businesses with grey fleets or company cars, and where employees receive fuel allowances.
In order to instill first an awareness of fuel consumption, and then a culture of fuel saving, you will need to set targets and monitoring measures, define clear policies, and then follow all of this up with consistent and clear communication with employees.
Eco Driver Training
Providing training on eco-driving techniques for drivers can reduce fuel consumption by as much as 15 percent and increase the range of EVs by up to 20 percent.
Training and fleet management systems complement each other well. While training is initially highly effective, it can suffer from impact fade over time. To counter this, the ongoing presence and feedback on driver behavior from a telematics system can help ensure that the improvements last.
Once poor performing drivers have been identified, fleet managers should engage with them to find out why they’re using more fuel than others. It could be due to issues with the vehicle, a challenging duty cycle, or routes that naturally result in more idling.
Providing individual guidance and resolving underlying route issues will be greatly more effective for engaging the driver in fuel saving rather than pursuing disciplinary action.
Incentive schemes and competitions to reward your most fuel-efficient drivers can be a highly effective way to promote fuel efficient driving. This could be in the form of individual leagues or group competitions. Just be sure to make the playing field level for all participants and allow for natural differences in fuel efficiency between different grades of vehicles and duty cycles. Going the
Next Step and Eliminating Fuel Use
Once your business has made steps to reduce fuel consumption, the next target is to start to eliminate the use of fuel entirely.
Many companies and municipalities have already made huge steps in this direction and their results prove that transitioning your fleet to electric will result in the greatest financial and environmental savings over time.
For fleet managers who want to both reduce fuel expenditure and vehicle emissions, electric vehicles (EVs) are an increasingly popular option. EVs also have the additional benefit of emitting zero emissions from the tailpipe and reducing noise pollution, therefore improving the quality of the urban environment.
Before leasing or purchasing EVs for your fleet, it’s important to right size each vehicle to their required duty cycle, and to be confident as to which vehicles would make the best candidates for replacement. In order to do this, you need access to the data that will make the case for you.
The Electric Vehicle Suitability Assessment from FleetCarma provides the conclusive data you need to plan your EV acquisitions and ensure that each purchase will generate the fastest savings and greatest environmental efficiencies, enabling you to:
- Support budgetary decisions by accurately forecasting ROI
- Forecast fleet wide savings
- Understand the total cost of ownership per vehicle
- Evaluate multi-year procurement plans, tailored to your fleet
- Calculate the reduction of GHGs based on possible fleet compositions
Adding EVs to a Company Car Pool
EVs need to be fully utilized to benefit from the best operational savings. This enables the higher cost of purchase to be paid back faster by the savings in fuel usage. Creating an EV car pool, managed through a scheduling system can help to achieve these optimal usage levels.
In order to ensure that employees have a smooth transition to using the new EVs, which will in turn increase their engagement and acceptance of the new vehicles, you will also need to invest in building an appropriate charging infrastructure.
Other Strategies for Reducing Fuel Use
There are a wide range of management strategies to reduce fuel usage across the entire operations. For detailed, practical guidance, check out our guides to reducing transport demand, and improving vehicle and driver efficiency.