Rising fuel prices are putting the pinch on businesses everywhere. Many businesses and fuel procurement offices assumed that if they could weather a few tough years, fuel costs would eventually stabilize. That assumption is providing to be incorrect. For better or worse, high oil prices are here to stay.
For fleet managers and independent owner-operators everywhere, effectively managing fuel costs will be critical to profitability in 2012. Luckily, companies have a few options on the table to help coping with the rise in fuel prices. Here are three strategies that companies can use to minimize the impact of high fuel prices on their bottom line.
Improve Fuel Purchasing – In addition to the price of oil rising, the market has also become increasingly volatile. Swings of five cents per gallon in a day are fairly common these days. Building some predictability into fuel procurement can help fleets make smarter buying decisions. There are a number of options to accomplish this but one that can help smaller fleets is the 360 Small Business Fleet Card. This card offers a 1% savings at the fuel pump at over 19,000 stations nationwide.
Better Manage Your Fleet – 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 get a far better bang for their buck is in smaller operational changes. For instance, employing highly-skilled drivers that are versed in fuel saving technique such as smooth acceleration and momentum control can save 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. These are just a couple of ideas. For a list of best practices, visit the EPA SmartWay website that aggregates best practices.
Plan Routes More Intelligently – A final way to save on fuel costs is to better plan the way that shipments are delivered. This boils down to delivering along more efficient manner routes as well as shipping loads more efficiently. There are a variety of route planning technologies available in transportation management systems. 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 drivers make. While this 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. What strategies are you seeing work. Please feel free to leave me a comment over at Software Advice – a website that reviews distribution management software. The original post can be viewed at: Three Strategies for Reducing Fuel Costs in 2012.