The American Transportation Research Institute issued a report(1) in June 2023 with some unsettling news for fleets: carrier operational expenses rose to $2.251 per mile in 2022, and spiking fuel prices were largely to blame. Fuel costs rose 53.7% over 2021.
While fuel is not the only contributor to expenses-per-mile, it’s a major factor. Fuel prices have reached historic highs in the years since 2020—impacted by everything from COVID-19 to supply chain disruptions to the Russian invasion of Ukraine. To add insult to injury, fuel seems to be the one expense over which fleet managers have zero control. Or so they think.
Fleets can contend with the fluctuations of fuel costs in more ways than one. In this blog, we explore proven ways to lower your fleet’s fuel usage.
Why Reducing Fleet Fuel Costs Is Essential to Your Bottom Line
It’s no surprise to fleet managers that the unpredictability of fuel costs—and their seemingly permanent high prices—take a direct toll on the bottom line. It’s vital to reduce fuel costs in your fleet for more reasons than just maintaining strong revenue. When your bottom line suffers, you’re forced to make decisions that have other negative impacts(2) on your business like laying off staff, selling equipment, or taking on debt.
In order to reduce fleet fuel costs, you need to make investments in technology solutions and operational changes that support safer driving behavior. While these investments might seem like a cash drain up front, they ultimately have a positive impact on your bottom line. The right technology and high-performing drivers mean a more stable budget—and one that is resilient to the volatility of the oil industry.
Understanding the Basics of Fleet Fuel Costs
Fleets typically shell out 60% of their total operating budgets for fuel(3), making it essential for fleet managers to keep tabs on this expense. With fuel occupying the majority of operational expenses (OpEx), fleet management is concerned with shaving OpEx everywhere else possible to contend with ever-rising fuel costs. Without proven solutions in place to wrangle fuel costs and gain more control over this part of OpEx, fleet managers are at the whim of the oil market—a bad place to be. Slip out of this chokehold by starting with technology.
How to Reduce Fleet Fuel Consumption with Technology
Consider combining the following solutions for more control over fuel costs and a healthier operation overall:
Technology That Reduces Aggressive Driving and Speeding
The U.S. Department of Energy found(4) that aggressive driving behavior, characterized by speeding and rapid acceleration and braking, can lower highway gas mileage by 15% – 30%. Fleet management technology that offers ways to monitor these behaviors and help drivers reduce them through self-coaching improves fuel economy as a whole. The right in-cab cameras capture 100% of driving time, and AI-driven systems prompt drivers in real time to slow down or take other measures that not only cut fuel costs related to aggressive driving but improve safety as well.
Tech-Based Incentive Programs
Consider opting for fleet management software that allows you to directly tie driver performance to an incentive program. (More on the behavioral benefits of doing so below.) Technology-wise, your software should help you demonstrate clear cost-related changes top drivers make, such as fewest hard-braking instances. When you can pull statistics from your fleet management solution that show which drivers deserve to be rewarded for cost-cutting performance, you’ll motivate other drivers to step it up.
Software to Minimize Behaviors Such as Idling
Fleet management software now offers telematics(5) which give fleet managers comprehensive views of fuel consumption. Telematics delivers information on the correlation between certain driving behaviors and fuel usage such as idling—helping managers to give feedback to drivers(6) about how to reduce these types of behaviors and thus fuel costs.
Tools to Optimize Route Planning
The right fleet management solution also incorporates route optimization technology so fleet managers can ensure drivers are achieving maximum fuel efficiency by driving routes that use the least amount of gas. Whether that be avoiding areas with high levels of traffic congestion or rearranging stops to optimize travel time, route optimization solutions help to reduce idling times and subsequent fuel waste while ensuring drivers are only driving the distances they need to get the job done.
AI-Driven Maintenance Programs
Artificial intelligence (AI) and machine learning (ML) have made their way into fleet management systems for the better. AI- and ML-based predictive maintenance systems gather and analyze data about fuel consumption(7)—among other points—to help managers proactively schedule vehicle maintenance. By getting ahead of maintenance needs, fleets can avoid the money leaks associated with fuel-inefficient vehicles.
Fuel Cards
Fuel cards are an easy way to track how much fuel your fleet uses. Typically part of fleet management software, fuel cards are report cards for your fuel usage. The most helpful type of fuel card will give you real-time fuel data and information such as fuel transaction history, vehicle miles-per-gallon comparisons, and even fraud prevention. Using fuel cards allows you to set fuel efficiency targets and accurately monitor if you are on the right track to reach them.
Behavioral Changes to Increase Fuel Efficiency
Technology will only get you so far if your fleet is full of drivers who drive in ways that waste gas. Everything from idling unnecessarily to speeding to hard braking have an effect on fuel usage. You can begin to shift driver behavior to improve fuel efficiency by implementing training that emphasizes and rewards certain behaviors. Eco-based driver training can include modules on everything from anti-idling practices to the importance of keeping vehicles clean and as light as possible to reduce fuel consumption.
Of course, drivers are much more likely to respond to such training and implement these best practices with the right motivation. Don’t underestimate the power of an incentive program for efficient driving. Tactics like employing gamification where drivers compete for top efficiency scores and awarding them with real rewards like money or gift certificates help incentivize drivers to treat fuel costs like their own. Be sure to make your reward system public information for your whole fleet so every driver is aware of what they stand to win if they improve fuel efficiency.
While there are dozens of ways to approach driver coaching, consider implementing self-coaching as part of your method. If you choose the right fleet management system that includes self-coaching capabilities, drivers are more likely to respond positively to feedback from that system than they are a human manager. When corrective action comes from technology instead of a human, it helps to skirt feelings of judgment or wrist-slapping. It’s also a best practice to ensure a frequent cadence for any eco-based driving training so you can continuously improve.
Lastly, transparency is an oft-overlooked but essential aspect of successful driver training and behavioral changes in any fleet. Managers have multiple options when it comes to staying transparent with drivers about fuel consumption goals, including sharing fuel costs, updating drivers on sustainability efforts, discussing fuel efficiency in light of the climate crisis, and more. And if you are considering implementing fleet management systems, it’s always a good idea to share your choices, reasoning, and options ahead of time with your fleet to engender trust and assuage any concerns.
Leveraging Alternative Measures
Beyond the aforementioned tactics and technologies, there are several other avenues fleets can take in their effort to cut down on fuel consumption. Tire management is a major one; the U.S. Department of Energy says(8) “every decrease in pressure by one pound per square inch for four tires can decrease fuel economy by 0.2%.” If fleet managers can establish a cadence for maintaining the right tire inflation, they can increase fuel efficiency while also ensuring longer-lasting tires.
Additionally, no discussion about fuel efficiency would be complete without bringing up eco-friendly business models. While investing in more sustainable vehicles—that don’t rely solely on fossil fuels—might be decades away for some fleets, it’s important to at least stay educated about the market. Fleet managers should look into the benefits of embracing electric vehicles or even hydrogen-powered vehicles. As these technologies evolve and proliferate, they will likely be attainable options one day for fuel-conscious fleets.
Challenges and Considerations
It’s clear that fleet managers have their work cut out when it comes to improving fuel efficiency, but on top of all the changes lie a few more internal challenges to wrestle with. Namely: driver privacy concerns and resistance to change.
If you consider adopting fleet management software to reduce fleet fuel costs, you may be met with pushback from drivers. Drivers don’t relish the thought of technology that monitors their every move—even if it’s in the name of fuel efficiency. But fleets can mitigate these concerns by demonstrating that fleet management technology actually recognizes drivers’ great performance. If you make it clear that your company will be instituting rewards programs or incentives as mentioned above, drivers will be more receptive to the technology. Remember that transparency is key here to addressing privacy fears and overcoming resistance to change.
You’ll also have to figure out how to ensure the accuracy and reliability of your technology solutions. As you consider which fleet management software to implement, look for solution providers that can offer proof and assurance of the performance of their technology. Market leaders will be able to demonstrate the capabilities of their solutions and offer case studies and customer support to ensure you see better fuel efficiency from using their tools.
Start Reducing Fleet Fuel Costs Today
You don’t have to overhaul your fleet’s operations to begin making small changes that add up to smarter fuel usage. Everything from calculating your current fuel economy to staying on top of tire inflation can help. When you’re ready to make an earnest commitment to improving fuel efficiency, consider Netradyne’s AI-driven fleet management software that’s proven to reduce fuel costs for fleets. We’ve helped fleets achieve maximum fuel efficiency—all while improving safety for everyone on the road. Get in touch with one of our experts today to learn more.
Frequently Asked Questions about Fleet Fuel Reduction
Do these steps actually make a difference?
Yes, when you combine fleet management software that monitors everything from vehicle maintenance to driver behavior with other initiatives to change the way your fleet approaches fuel usage, you will see a real difference in your fuel economy.
What are the costs of some of these changes?
While the costs of fleet management technologies and training initiatives vary from provider to provider, these costs will eventually be outweighed by the return on investment in the form of fuel efficiency.
What fleets have successfully implemented such items?
Read about three fleets that have successfully implemented fleet management software:
Sources:
- https://truckingresearch.org/2023/06/an-analysis-of-the-operational-costs-of-trucking-2023-update/
- https://www.linkedin.com/pulse/how-trucking-industry-being-impacted-rising-fuel-afsal-abdul-vaheed/
- https://www.automotive-fleet.com/346725/containing-fuel-spend-is-a-top-fleet-focus-despite-price-stability
- https://www.energy.gov/energysaver/fuel-economy
- https://www.netradyne.com/blog/fleet-management-fuel-cost
- https://afdc.energy.gov/conserve/behavior_strategies.html
- https://www.linkedin.com/pulse/ai-based-predictive-maintenance-reduces-your-cost-10-20-greg-urban/
- https://afdc.energy.gov/conserve/vehicle_maintenance.html
