How to manage fleet fuel usage most efficiently
July 20, 2022
Many fleets are navigating growth expectations despite ongoing original equipment manufacturer (OEM) production delays and supply chain restraints. In fact, our 2022 Market Pulse Survey showed 91% of respondents are facing challenges to tighten operating spend as inflation soars to record highs. While these priorities may feel nearly impossible to overcome due to current market trends, focusing on controllable factors can put your fleet on the fast track to meet all of your business objectives.
Optimizing fleet fuel spend is a low hanging fruit opportunity
Did you know that fuel accounts for over 30% of U.S. and more than 35% of Canada fleet spend? At these significant percentages and with fuel prices recently reaching an all-time high, the sticker shock at the pump makes it more important than ever to:
- Gain a full understanding of your holistic fleet fuel usage and spend,
- Plan for fuel budget increases, and
- Identify action areas where you can reduce fleet fuel costs.
Fuel pricing forecasting
Despite prices beginning to come down slightly, budgeting for fleet fuel costs is especially challenging due to the instability of fuel prices. The Energy Information Administration (EIA) and Natural Resources Canada (NRC) anticipate continued high costs through summer. Both agencies are predicting further decreases in the second half of the year, but all signs point to higher fuel prices remaining for some time compared to 12-month averages. This impact is caused by geopolitical turmoil in Ukraine, ongoing supply chain issues, and inflation.
Recommendations to manage your fleet fuel spend
As these global circumstances cause fuel prices to skyrocket, apply these three strategies to controllable factors to maximize your fleet fuel cost savings potential:
1 - Choose your fleet vehicles wisely
Ensuring you have the most fuel-efficient vehicles for each job application in your fleet is a critical step in reducing fuel consumption and overall fleet spend. Increased volatility in the price of crude oil continues to impact rising fuel prices. This presents a strong opportunity to consider other vehicle types such as hybrid or electric vehicles (EVs) to reduce reliance on fuel. Among the respondents of our 2022 Market Pulse Survey, 82% have begun their fleet electrification journey. Arc by Element™ offers end-to-end EV support for your fleet transition.
2 - Take action with telematics insights
Aggressive driving, idling and speeding lead to wasteful fuel spend. Fleet telematics solutions provide easy access to vehicle and driver data insights such as fuel economy improvements to empower fleet operational efficiencies and minimize driver behaviors that lead to unnecessary fuel costs.
Cases of fleet fuel theft often rise drastically as costs increase. Fuel fraud is detected when a fuel card is used without the fleet vehicle present or with irregular re-fueling such as filling over the tank capacity. Unfortunately, fuel misuse is easily masked due to inflated prices at the pump. With the detailed metrics provided by Fuel EKG™, fleet managers can more easily identify and address fleet fuel fraud.
The robust view you will gain of your current fuel usage through telematics data provides a foundation to review fuel expense budgets with your finance teams, set realistic expectations of projected fuel spend, and identify opportunities to improve the overall efficiency of your fleet fuel spend and overall fleet performance.
3 - Pay the lowest price for fuel
While the cost of fuel and the circumstances contributing to rising prices are out of your control, selecting the lowest cost fuel station is a simple way to optimize your spend. Element’s Supplier Locator helps fleet drivers identify the closest and lowest cost gas stations. By requiring your drivers to take advantage of this technology and to fill up with the OEM recommended fuel grade, you can mitigate overspending at the pump.
Fuel is one of the top three highest costs among fleet expenses. Focusing on the leading spend items provides the largest opportunities for maximum cost reduction when looking for ways to reduce total cost of ownership and offset inflationary expense pressures.
Consult with Element experts for suitable, fuel-efficient vehicle alternatives and to learn more about how our diverse suite of connectivity solutions can meet the needs of your fleet.
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