5 Tips for Trimming Your Fuel Costs
With the price of fuel hovering at just under $4 per gallon, companies with fleets of cars and trucks are feeling a pinch on their profits as they spend more getting their vehicles from place to place.
Truly the best way to limit consumption is to drive less, but that isn't always possible for many businesses. Small practices like limiting excess weight in a vehicle or keeping windows rolled up can make an impact over time, but often it takes more "big picture" thinking to make dramatic gains in fuel consumption.
Here are a few creative ways to change your business' operations with big returns.
1. Train your drivers to drive
Driving habits, such as how you start and stop your vehicle or how you shift gears, may seem like inconsequential habits when it comes to fuel efficiency, but bad driving can rack up enormous fuel bills. In fact, depending on its size, as much as 33 percent of a vehicle's fuel consumption is affected by how the driver operates it, Jason Mathers, project manager at the Environmental Defense Fund and author of a white paper on how truck fleets can reduce fuel consumption, says.
"We've all been in a taxi, and we all know that stereotypical bad taxi ride," Mathers says. "The more that your drivers fit that driving style, the more of a problem you have."
Mathers recommends teaching your drivers not to accelerate too quickly or slam on the brakes, as these habits consume gas quickly. Jonathan Byrnes, author of "Islands of Profit in a Sea of Red Ink" and president of Jonathan Byrnes & Co, a consulting company, says drivers need to be taught and reminded to drive steadily and know when to turn off a vehicle when at a standstill.
Additionally, both drivers and companies need to be aware of traffic patterns and the time of day when delivering a load or driving a vehicle, as many routing algorithms do not take these things into account. Avoiding heavy traffic and red lights will mean less starting and stopping.
If you've educated and reminded your drivers to drive in a more fuel-efficient way but it's not saving as much money as you'd hoped, try incentivizing the practice. If you have one driver per delivery or vehicle, you can track the miles per gallon used in a given amount of time. At the end of a week or month, offer a reward, such as a gift certificate, to the driver with the best MPG.
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2. Slow down
The optimal speed for most trucks to drive and get the best mileage may be 55 miles per hour, but most drive much faster than that, Jan Fransoo, a visiting professor at the Massachusetts Institute of Technology, says.
Reducing a truck's average speed from 70 miles per hour to just 65, can translate into a reduction in fuel consumption by 6 percent, while reducing by another 5 miles per hour to 60 will give you an additional reduction of 7.5 percent, Fransoo says.
Christopher Jackson, national field coach for College Hunks Hauling Junk, a moving and disposal company, says the company encourages employees to slow down not only to save fuel, but because its vehicles act as advertisements. The bright orange trucks display the company's colorful cartoon logo and contact information for services.
"It's a billboard," he says. "We'd rather our guys drive a little bit slower to keep that billboard out there a little bit longer. That's part of our branding that inherently keeps our fuel costs down."
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3. Monitor idling
If your sales associates have turned their cars into an office or if your drivers are sitting in the air conditioning between deliveries, they're using an enormous amount of fuel — a quarter to a half gallon of fuel per hour or more to be exact, according to data from the U.S. Department of Energy.
Mathers recommends encouraging drivers to cut down on idling by finding other venues to do work and get out of the car, in addition to investing in telematics or GPS software to extract data from a vehicle's internal computer.
Cox Communications, a telecommunications and wireless company, integrated GPS technology into 5,000 vehicles in its fleet. The company began using GeoManager GPS, a mobile resource management system, to monitor idle time, provide a vehicle's position to supervisors and dispatchers, and provide historic travel data. The company's system reduced idling time by providing tighter routing so employees went from job to job more efficiently and with less down time in between.
In one year the company reduced idling time by 84 percent, in addition to decreasing mileage by 15 percent and cutting fuel consumption by almost 8, Mark Leuenberger, assistant vice president of supply chain services and fleet management, says. These combined have saved the company nearly $2 million in fuel costs.
Though the new technology cost Cox, Leuenberger says the equipment has paid for itself for the business and the environment.
"At Cox, we look for projects that are good for the environment and the business," Leuenberger says. "It's important for us that projects have a good return on investment."
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4. Cut down on unnecessary trips
Take a look at how often you're delivering to a given customer. Are you dropping off products three times a week at a customer's request when you could really be doing it once or twice?
"In the old days when route optimization started, people simply took the order pattern as a given because customers were always right," Byrnes says. "Your job was to respond in the most cost-effective way. What's really changed from then to now over the past 30 years is that really good companies have become very tied and very intimate in operations with their customers."
Use these ties to your advantage by evaluating how often you realistically need to deliver with your customers. Since the most effective way to reduce fuel consumption is to drive less, reducing the number of trips you take will mean big savings, Byrnes says. Optimizing joint costs will also save your customers money, since generally inventory holding costs are much lower — or nonexistent — compared to those associated with delivering an additional load.
Jackson said College Hunks Hauling Junk often gets creative with optimizing its routes and ensuring it doesn't make unnecessary trips by looking at the bigger picture. Sometimes the company will get warehouse or storage units in places they drive often to to cut down on distances traveled, or drivers will add one customer's load to another.
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5. Empower your people
When making changes to driving practices or installing new technology, keep employees at the forefront and they'll thank you with savings.
Leuenberger says Cox Communications was as open as possible with its employees about the changes it made to its fleet, which in turn made them more receptive to the new technology and practices.
"Communication is very in implementing changes to business practices," he says. "We wanted to make sure our employees knew about the changes and the benefits they provide."
Jackson says one of the biggest ways it maximizes its fuel is by putting the best practices in the hands of its employees by giving them the tools to make better decisions.
Every day, employees of College Hunks Hauling Junk gather for a "daily huddle," where they go over fuel costs and efficiency from the day before, set goals, and discuss ways to improve. Jackson says drivers are encouraged to think of their trucks as small businesses within the company.
"We empower them to make the decisions that impact those costs on a daily basis," he says. "Technology can only take you so far. They're the ones that have the ability to make those decisions on the fly and either make us more efficient or less efficient."
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