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Why Lower Fuel Prices Don't Mean What You Think


Fuel consumption hits a company in its wallet as the money paid out for gas takes a bite out of the budget. Lowering those costs is an obvious reason to use less fuel and saving money is a satisfying indicator of that success.

The problem is that when fuel prices drop, fuel costs drop even if fuel use stays the same.

Falling fuel prices might not be a problem if money were all that mattered, but it isn’t. More and more fleets are making reduced fuel use an organizational goal. Lowering greenhouse gas emissions by improving fuel economy is the basis of fuel regulation.

When a fleet manager tries to reduce fuel use by giving other personnel fuel cost targets, falling fuel prices virtually ensure failure by making it look like the organization has met its goals when it has not.

A manager could set total fuel use targets instead, tracking gallons rather than dollars, but ultimately that is almost as deceptive. To illustrate why, imagine a delivery van with a set route every day. Now imagine that business falls off and the van is driving around half-empty. It’s obvious that a half-empty van wastes more fuel than a full one driving the same route, but since the fuel use is the same, the manager counting gallons won’t know. 

What fleets need to measure instead is load-specific fuel consumption—how much work each gallon of fuel does. With an eye on load to fuel ratios, a manager can accurately assess fuel efficiency across the fleet even if both the price of fuel and the amount of business the fleet changes radically.

The reason most fleet managers can’t do this is that work load and fuel use are usually the responsibility of different people, or even different departments. Tracking load-specific fuel consumption requires drawing together information that is usually kept separate. Ultimately, improving communication across departments is good for most organizations, but it is seldom easy and requires deliberate intent.

Fortunately, fleet management software is great at bringing together information in a useful way. Once a fleet begins tracking its load-specific fuel consumption, the software can help bring those numbers lower fast by bringing together data on the three places where inefficiency typically hides: driver behavior, mechanical issues, and routing.

Erratic driving, fast acceleration, hard braking, and speeding, all waste fuel. GPS tracking can catch all three in real time, record the episode, and alter the manager who can later work with the driver to prevent a repeat of the problem. Real-time tracking of all vehicles in a fleet also makes it easier to spot redundancies in the routes. Managers can then contact drivers and solve the problem. GPS fleet management software can also spot mechanical problems early, allowing the maintenance department to address issues promptly, before the vehicle’s gas mileage drops too far.

Bring down load-specific fuel consumption and not only will the organization meet its emissions-reduction commitments, but when fuel costs rise again (as they surely will), the budget will look good.

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