Stanford economist Frank Wolak estimates the global price of oil will sustain at its current low cost of $50 to $70 per barrel for the next 10 to 20 years. And with these low fuel prices, some in the trucking industry are reconsidering the economics of investment in fuel efficiency and alternative fuels—and investing more in the assets they currently own.
When fuel is expensive, investing in newer, more fuel-efficient vehicles or alternative fuel fleets makes a lot of sense. It can be a great investment in the future of your business. However, as fuel costs drop, and the production of domestic U.S. oil is on the rise, the wisdom of such investments starts to look a little less obvious. The savings accumulated from low fuel costs can strategically be invested in the assets you already own. As long as they are in compliance with emissions standards, trucking companies can save money and maintain their older vehicles.
And regardless of the financial climate, GPS tracking software can even help reduce fuel consumption and decrease the risk of vehicle depreciation.
A big part of how much fuel a vehicle uses is the skill of the driver and the condition of the vehicle. Real-time tracking catches speeding, abrupt breaking, and excessive idling, all of which increase fuel use—and recordings of these behaviors via telematics make great training tools to help drivers improve their behavior.
To assist drivers, dispatchers use GPS software to locate in real time the most efficient routes and easily assign jobs to the closest drivers. And drivers can in turn communicate directly with dispatchers and their office to get help and confirm jobs so that deliveries are made in a timely and productive manner.
Most importantly, high company costs are many times associated with vehicle abuse and accidents. Telematics can provide valuable information on a vehicle’s mechanical condition so that trucks get the timely maintenance they need to not only run properly, but also keep drivers safe. Instant event replays additionally allow fleet owners to see where and when a vehicle encountered problems. And provide the best insight into a vehicles mechanical condition and external factors that can impact its wear and tear.
With the money saved from low fuel costs, think twice about throwing away your old vehicles to buy new ones. Investing in software that can help maintain the assets you already have can be an even larger money saver.