Combustibles

FUEL CONSUMPTION REDUCTION

The organization has to design and implement policies for vehicle fleet operation, such as maintenance management, breakdown management, spare parts management, control and reduction of fuel consumption, tires management, prevention and reduction of traffic accidents, or the use of owned or outsourced workshops.

The organization has to write and establish the operations manual for the fleet’s vehicles concerning their maintenance, use, safety, fuel consumption, driving, and what to do in case of an accident or breakdown. This manual has to be given and explained to every driver and/or person in charge of the vehicle.

The goal of vehicle operations is that they operate the maximum time possible in order to meet the established service level, with the least possible variable operational costs.

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The organization has to design and establish the adequate measures to control and reduce the fuel consumption and contaminating emissions, because the fuel consumption can account for around 70%-80% of the variable operational costs, and 30% of the direct costs. Fuel consumption is also the main source of contaminating emissions if the vehicles are using fossil fuels like diesel or gas in the fleet.

A vehicle’s fuel consumption depends on internal aspects such as the way the vehicle is driven, type of fuel, vehicle’s age, characteristics of the engine, vehicle’s weight, tires pressure, vehicle’s aerodynamic, vehicle’s schedule of use, advancement and rolling resistance, vehicle’s equipment and on external aspects such as weather conditions, seasonal factors, traffic conditions; type of routes, road’s condition, and fuel’s quality.

The main measures will be taken over the vehicle’s drivers, because they are the ones that cause the most impacts on the vehicle’s fuel reduction. The main ones are: train drivers efficiently, use devices that help them driving, and help and correct the way they drive; also classify drivers who have the lesser fuel consumption and share their best practices with the rest of the drivers; and/or implement a system of incentives for the fuel’s reduction.

Other measures for the vehicle’s fuel reduction are the following: use speed limiters, tires with low rolling resistance; do the needed maintenance in the established period of time, and under the manufacturer’s instructions. Use devices that turn off the motor during idle time, and aerodynamic devices; plan the route ahead of time, control the private use of the vehicle, as well as using the right pressure for the tires and controlling the load weight that’s being transported; avoid jamming, assign the vehicles with less fuel consumption to the longest route, and reprogram the motor control center (MCC).

To know the fuel’s consumption, it has to be measured. If we use a telematic service and/or fuel cards system, it’d be automatically reported, if not, the organiztion has to establish:

  • A person in charge of reporting this data, that could be the vehicle’s driver or a person in charge of a set of vehicles
  • A way to do this is introducing the data to the system directly, or by communicating it to the maintenance manager via text (SMS), email or fax

This data could be reported each time the vehicle is refueled, or every certain period of time like weekly or monthly. At the same time, the traveled distance and date must be reported too in order to calculate the fuel’s consumption by liters per 100 kilometers/miles.

The data for vehicle’s consumption could be analyzed and structured applying the following techniques.

  • Descriptive statistics: present and characterize a set of data like average consumption, maximum and minimum consumption, consumption range, that the 20% of  drivers, vehicles, routes, etc. produce 80% of the fuel’s consumption
  • Lineal or multiple regression models: create a relation between a variable with one or multiple variables, such as creating a relation between fuel consumption and the distance traveled
  • Variance analysis: find difference between data groups like knowing if there’s any difference between vehicle’s brands, routes, drivers, etc. in the fuel consumption
  • Multivariate analysis: analyze simultaneously a set of multivariate data, like identifying behavioral patterns such as drivers with the highest fuel consumption are those that are 32 years old, with 3 years of experience, haven’t received an efficient driving course, and drive in an aggressive way
  • Operations research: use mathematical models in order to find the best optimal solution for a problem with limited resources like optimizing routes, the fleet’s size, etc. to reduce the total fuel’s consumption

The information obtained for the reduction and control of fuel applying these techniques are the following.

  • Identify the drivers, vehicles and routes with higher fuel consumption than expected.
  • Identify the drivers that don’t have an efficient way of driving
  • Identify the drivers that go over the speeding limit
  • Identify if it’s viable to incorporate idle time devices that turn off the engine during the stops
  • Identify if it’s possible to buy a private fuel deposit where the vehicles can refuel, and for this reason the fuel price would be lower
  • It allows the organization to plan the route ahead of time, finding the shorter or with less traffic route
  • It allows the organization to control the misuse of the vehicles
  • It allows the organization to know if the fuel is used for private use
  • Assign vehicles with less fuel consumption to the longest routes
  • Identify behavioral patterns related with fuel consumption
  • It allows the organization to know if hybrid or electric vehicles meet the fleet’s operational requirements in order to be acquired

If the organization is the owner of the vehicles, it’s advised to own a private fuel deposit where the fleet’s vehicles can refuel, this gives certain advantages like paying less for fuel when buying high volumes, having an easy and effective refuel control, and refuel flexibility.

Using hedging derivative financial instruments like futures and/or options over the fuel’s price, the organization could cover their fuel’s needs in order to benefit from the low in prices or have a fixed fuel’s price for a determined period of time.

If the fleet uses alternative fuels, the most advisable thing would be to share recharging facilities with other organizations, due to their costs.

JMFI´m a Fleet Management expert, and the manager of Advanced Fleet Management Consulting, that provides Fleet Management Consultancy Services.