Those working in the transportation industry are all well aware of the hardships posed by the recent spike in gas prices. Fuel shortages lead to rising prices and severely threaten an economy that runs on fossil fuels.
Several issues are plaguing the fleet business, and rising fuel costs are a major one. Constraints in the supply chain, increased consumer demand, rising commodity prices, and the greatest inflation rate in 40 years have contributed to rising fleet expenses. Companies feel the effects of the increased cost of petroleum just like regular customers do. As of April 25, 2022, the average diesel price in the United States was above $5 per gallon, according to the American Automobile Association (AAA). When fuel is one of a fleet’s highest costs, managers are under additional pressure to keep expenses in check as gas prices climb. For successful fleet management, fuel costs should be maintained at reasonable levels.
What Do Expensive Fuel Costs Mean For Vehicle Fleets?
Rising fuel costs make the fleet business unmanageable as it may lead to losses. These costs may drive the collapse of some businesses. Rising prices at the pump have contributed to a trend toward more people purchasing electric automobiles. Companies looking to upgrade their fleet weigh the pros and downsides of purchasing diesel vehicles vs electric vehicles.
Most businesses see a more significant and rapid return on investment (ROI) with an EV as petrol costs continue to rise. While an electric vehicle’s purchase price may be higher than an internal combustion engine car, the cost savings accrued throughout ownership and operation are often substantial.
Fully electric vehicles, for instance, never need regular maintenance; thus, their ownership costs are cheaper than those of conventional automobiles. Saving money on gas is an obvious and significant perk of driving an EV. Electric vehicles have a conversion efficiency of 3 – 4 times higher than conventional vehicles, resulting in lower operating costs. Electricity’s average cost is lower than that of other fuels, contributing to the move of fleets to electric cars.
Here are a few ways to reduce fuel costs to make fleet business more sustainable.
1. Slow down the rate of aggressive driving
31% of fuel efficiency can be affected by how aggressively drivers drive. Aggressive driving behaviors include excessive speeding, quick acceleration, severe braking and maneuvering, and violating stop signs, all detrimental to fuel economy.
The use of telematics technology makes it much easier to provide feedback to drivers and encourage them to adopt safer practices while driving. Businesses should create a scorecard to assess each driver’s level of driving efficiency objectively. To encourage drivers to strive for the top spots on the leaderboard, it is helpful to publicize the results and provide incentives to the best performers.
The rules and alerts provided by telematics can be used to provide immediate feedback to drivers. If a driver is speeding, braking suddenly, or acting aggressively, they will receive feedback in the form of audible warnings in their vehicles. Other strategies for reducing aggressive driving include rewarding safe drivers with recognition awards and broadening safety and training programs.
2. Regularly check the pressure in vehicle tires
According to the U.S. Energy Dept., a decrease of 0.2% in gas mileage can be attributed to under-inflated tires for each 1 PSI drop in overall tire pressure. The research shows by keeping an eye on tire pressure, firms can save money on gas. Temperature changes can also alter tire pressure, so it’s essential to monitor it regularly. This phenomenon is true in particularly cold or scorching environments.
A Tire Pressure Monitoring System report can determine the optimal tire pressure. Before setting out on a trip, drivers should also double-check their tire pressure. Tire pressure can be included in the drivers’ vehicle inspection (DVIR) protocol or set up for automatic email maintenance reminders with telematics.
3. Initiate routine inspections of the fleet
Better gas mileage is one of the many benefits of routine car maintenance. Using the motor oil grade suggested by the manufacturer can boost gas mileage by 1%-2%.
An oil change, new air filters, or other preventative maintenance can increase gas mileage by as much as 40 %. Expenses can quickly add up when minor auto repairs are not handled. Through fleet management software, vehicle wear and tear can be reduced, engine problems can be identified, maintenance schedules can be created and followed, and vital information about the engine may be gleaned.
4. Find a car that’s perfect for the job at hand
Firms need to choose the right vehicle for the job. The fuel prices will rise if they use a big truck for a small distance and a little load. To save money on gas, firms should choose the right car for the job. Using small cars that have smaller engines that use less gas is an excellent idea. However, the load being transported is the ultimate guide for what vehicle should be chosen.
For instance, the Automotive Fleet one logistics firm has seen a 70% to 100% improvement in fuel efficiency thanks to purchasing vehicles with engine sizes tailored to specific routes. One alternative for fleet management is to use electric vehicles for lesser loads. Potential cost saving opportunities might be found with the help of analytics provided by a telematics service provider.
5. Fuel Cards
Using a gasoline card that discounts petrol purchases, cash back or points, and sometimes savings on other vehicle expenses (repair, oil changes) is another way to cut down on fleet fuel costs.
A further feature of fuel cards is the ability to track vehicles and drivers, allowing businesses to pinpoint inefficient drivers or vehicles and make necessary adjustments to reduce fuel consumption. Fuel cards for fleets eliminate the need for paper receipts and streamline drivers’ payment and tracking processes. Information about individual drivers and the business as a whole is readily available for download by fleet managers. Firms should simply import their receipts into Quickbooks to keep track of their gas money.
Despite the increased fuel costs, there are all these different steps businesses can take to encourage cost savings. Businesses should also consider the additional costs they have to incur in pricing their goods and services. This step makes sure that they are making a profit.