Fuel is one of the biggest expenses when managing a fleet. Any volatility in the pricing can significantly change this cost. With fuel prices steadily increasing this year, it’s increasingly important to find solutions that mitigate any dents in profitability caused by this.
Even small improvements in fuel usage can generate a sizeable profit boost. But what are those improvements and what can fleet managers do to optimise fuel management?
Here are some things you can do to help get a handle of fuel costs:
Replace old fuel guzzlers with fuel efficient vehicles
One way to reduce fuel costs is to upgrade your fleet and purchase or lease more fuel efficient vehicles. This is a quick way to improve the efficiency of your fleet and can help to dramatically reduce fuel costs.
However, the cost of doing this can be financially prohibitive and not cost effective. The vehicles might not actually be that old and in some cases a decent service will help bring the vehicles up to an acceptable level.
Betting on an upward trend
An alternative, particularly for large fleets, is fuel hedging that helps protect companies from fluctuating fuel prices. Essentially, businesses buy oil commodity options to lock into fixed price in advance.
While most expect fuel prices to rise over the long-term, there remains less certainty in the short to medium-term, which we can see through the recent fluctuations in Australian fuel prices currently. If timed right, businesses can take advantage of the ups and downs in fuel pricing. But, you may need a crystal ball to help you guess when changes are likely to occur.
At least with a flat price locked in for the year, you can better manage the fleet efficiency of your fleet.
Reduce your fuel costs by 50 per cent by understanding consumption
One of the biggest costs to business is the misuse of company vehicles or fuel cards. One of our customers, LeFand Services, was finding workers were using company cards to buy fuel for personal trips.
LeFand Services implemented TomTom Telematics fleet management solution, Webfleet, LINK 510 and its driver terminals. This enabled the company to better understand how much petrol each driver was using and whether it was being used for company or personal use. By improving its understanding of how drivers were using their vehicles and fuel cards, LeFand Services was able to reduce its fuel costs by 50 per cent.
LeFand services isn’t the only business wrestling with these costs either. According to our research, a third of people that have driven a company car in the last year have logged personal trips under work. This is a huge cost for any business, which telematics can help to reduce.
Take 20 per cent off fuel costs by improving driver behaviour
It’s no secret, employees drive fleet vehicles in a very different manner to how they would drive their personal cars. At the end of the day, it’s not their vehicle and they don’t have to foot the bill for petrol and maintenance costs.
This can significantly impact the consumption of fuel. In fact, improving driver behaviour can result in fuel savings of up to 10 per cent, even going so high as 20 per cent for aggressive drivers.
But, changing an employee’s driving behaviour is no easy task. Success in doing so can help to unlock the door to more effective cost and road risk management.
One way to achieve this is through telematics technology, which empower drivers by providing them with the tools that ‘trigger’ and offer the ‘ability’ to help improve their driving behaviour and performance behind the wheel.
For example, TomTom Telematics OptiDrive 360 coupled with WEBFLEET enables businesses to receive real-time feedback, collate different data points and analyse driving styles to see exactly how their drivers are performing. From speeding, driving events, fuel consumption to idling, green speed, gear shifting and harsh cornering, telematics solutions can provide a vast array of data for fleet managers to monitor.
Businesses can then use these insights to reward good behaviour and promote a better, safer and more economical driving style, reducing fuel costs in the process.
For more information on how to reduce fuel costs, download our whitepaper here
Don’t let fuel guzzle away the finances and let technology optimise your fleet today.