Buy Smart - On the Road or at Home--Contributed by Mike Meehan VP Business Development
Even the most fuel-efficient fleet can further reduce its fuel spend by how it buys the diesel it must consume. Mike Meehan, vice president of sales for Fleet Advantage, Fort Lauderdale, Fla., which provides equipment financing and lifecycle cost management to large private fleets, contends that no fleet can afford not to be strategic about how it buys fuel.
Meehan recommends taking a data-driven approach to make sure fuel is being purchasing wisely by drivers on the road.
“It comes down to the fleet directing where the drivers should buy fuel,” he explains. “With today’s software, you can program a truck’s route from beginning to end without deviations and advise where to by fuel” at the best price along the way. “A fleet can also benefit by publishing a report each week on fuel buying that will encourage drivers to comply. Drivers will ‘compete’ to not be at the bottom of that list.”
Issuing fuel cards to drivers, he says, can “provide ease of transaction for drivers and effective recordkeeping while also helping avoid fraudulent purchasing.”
Some fuel cards will batch fuel purchases and issue volume-based pricing after a certain period, according to fleet management software provider Fleetio, Birmingham, Ala. The company points out that while those features could potentially save a fleet money, they could also include “added requirements or fees that other cards may not. The key here is to have an idea of what you are currently spending on fuel (and where), and if that trend will continue, increase or decline in the foreseeable future.”
Fleetio also says a number of fleet-management products now integrate with major fuel card providers. This can create a direct link to other vehicle information to provide better analysis and decision-making across a fleet’s operation.
If you can buy bulk fuel, even better, says Fleet Advantage’s Meehan. He argues that “on-site fueling done with any kind of regularity will save the most over the long run compared to fueling only on the road.” He distinguishes, however, between a fleet contracting for on-premises bulk fueling vs. opting for a company that provides mobile on-site fueling.
Meehan says the latter approach “sounds good but, according to the data we’ve seen, there’s always more fuel spend as [those vendors] tend to pump as much fuel as they can at a given time. But a bulk fuel supplier will do the data analytics to show the fleet that installing their above-ground tank sized to the operation will save them compared to fueling on the road, as well as speak in terms of return on investment.”
That’s because the bulk supplier “can build that infrastructure investment into the fleet’s fuel spend or show the cost to capitalize it,” explains Meehan. “Typically, the fuel supplier selected will design, engineer and build the storage and fueling equipment for the fleet” as a turnkey solution.
“Still,” he adds, “the best way to save money on fuel is to burn less of it.”