August, 2003

Controlling Fuel Costs for Smaller Fleets

By Hollis Allen

As business owners with small to mid-size fleets have watched gas and diesel prices fluctuate dramatically over the past year, they continue to be concerned with controlling costs and making their businesses more efficient. According to Reuters and the Associated Press, retail gasoline prices may rise even higher in the coming months amid sharp drops in fuel supply. For those who oversee fleet operations within their companies, the high cost of fuel is justifiably becoming a major concern. But there are steps business owners can take to do their part in keeping their fuel costs at a manageable level.

One way to manage fluctuating fuel costs is by working with a fleet management company to implement a fuel card program. These programs enable business owners to track the cost of fuel for all drivers in the company, and do so in a way that is efficient and timely. Businesses that are involved in a fuel card program, offered by fleet services companies, may receive a separate ID number for each driver that is immediately recorded electronically at the point of fuel purchase. Drivers carry a single card to purchase their fuel and have access to more fueling locations than any individual retailer's card.

At the end of the month, the fleet manager receives one report that tracks all fuel purchases. Because the program provides detailed information about each driver and the vehicle in one easy-to-read report, as well as exception reports that help pinpoint unauthorized purchases, companies are better able to control costs while giving their drivers maximum convenience.

Fuel card programs enable companies to focus more attention on their businesses instead of spending time contending with issues pertaining to fuel, how it's purchased, how it's paid for, whether or not the charges were correct and were billed to the right department. In addition, these programs can ensure fleet vehicles are in line with lease terms, which can pave the way for the business to maximize the equity at the end of each lease.

There are other simple things businesses can do to help keep fuel costs down-in fact, many that seem to be almost basic. Driving wisely and maintaining vehicles on a routine basis go a long way in improving mileage and increasing efficiencies. Business owners can talk to company drivers about simple techniques to follow that can make a big difference in the long run. The following are just a few pointers:

• Go easy on the brakes and gas pedal. Avoid "jackrabbit" starts by accelerating gradually whenever possible. Also, anticipate stops to avoid sudden braking.
• Slow down. You can improve your gas mileage about 15 percent by driving at 55 mph rather than 65 mph.
• Avoid long idles. Turn off the engine if you anticipate a long wait time. Idling burns more gas than restarting the engine. (Two minutes is generally the balance between how much fuel is used idling compared with the amount of fuel required to restart the vehicle.)
• Keep tires properly inflated and aligned. Periodic wheel alignments and keeping tires inflated to your vehicle's recommended pressure can improve gas mileage.
• Get regular engine tune-ups and car maintenance checks. Tune-ups improve performance as well as gas mileage. Check your owner's manual for recommended maintenance schedules. By following the manufacturer's recommendations, you should be able to avoid fuel economy problems due to worn spark plugs, dragging brakes, low transmission fluid, or the transmission not going into high gear.
• Check your vehicle's air filter regularly. A dirty air filter can also adversely affect gas mileage.

Finally, although a little less obvious than the above, holding onto vehicles with high mileage can also mean higher fuel costs. Knowing when to dispose of older vehicles-a process known in the fleet management industry as "cycling"-can impact the bottom line by ensuring that vehicles are replaced at appropriate intervals to achieve optimum performance, in addition to the best resale value.

Hollis Allen is the manager of Enterprise Fleet Services' National Service Department. Visit the company's website at www.enterprise.com/fleets or call toll-free 1-877-23-FLEET.