How to Reduce Fleet Fuel Costs

How do you manage fleet fuel consumption?

Fuel is one of those inevitabilities in the fleet world. You need it in order to effectively operate your fleet, so you don't have much power over the impact it has on your budget regardless of whether you purchase fuel from stations or have an on-site fuel tank. However, you can take some strategic steps to lower your fuel usage - and reduce the fuel costs incurred through waste and fuel theft.

Creating a system for tracking fuel, either through fuel log spreadsheets or a fuel management software, allows you to get insights into your current fuel usage and identifies opportunities for improvement in your fleet, such as choosing assets based on fuel efficiency and optimizing drivers' routes in order to minimize the impact of fuel's variability in price.

How to Calculate Fuel Costs

Based on fleet industry benchmarks, fuel is responsible for 50% of costs associated with operating a fleet. Here are some steps you can take to get a better understanding of fuel's impact on your fleet.

1. Create a system for collecting data: many fleets use spreadsheets or software to track fuel expenses
2. Regularly upload fuel transactions: keep track of fuel purchases for each vehicle, either through your fuel card system, on-site fueling platform or by collecting receipts from drivers
3. Track odometer readings alongside fuel: by tracking your mileage, you can draw a clear picture of each vehicle's fuel efficiency
4. Calculate total and individual fuel expenses: determine your reporting period (monthly, quarterly, annually) and track your total fuel expenses over that time, as well as the total expenses per vehicle
5. Log the fuel cost per mile over time: if you track your mileage alongside fuel, you can see how much each vehicle costs per mile driven and identify high-use vehicles to try and cut costs

Tips to Reduce Fleet Fuel Costs

Focus on vehicles with a good fuel economy

When purchasing new vehicles, prioritize makes and models with a high fuel efficiency. If your fleet's use-case allows, consider adopting hybrid or electric vehicles.

Keep track of the fuel economy of your existing assets in order to see which vehicles are over- or under-performing. You should pay close attention to the fuel economy of all your vehicles, but especially those that are outliers in terms of miles per gallon. If a vehicle consumes a significantly higher amount of fuel than other vehicles of the same or similar model, something worth investigating is likely going on.

Balance out the utilization of your assets

By tracking and balancing asset utilization, you will not only extend the lifespan of your vehicles, it also helps distribute fuel consumption evenly across your fleet.

Implement a schedule that ensures even use of all your vehicles, preventing excessive wear and tear on individual assets. If you're tracking odometer readings, you can run monthly reports to see which vehicles are being over- or under-utilized and can change up routes and assignments to create more balance.

Track and manage vehicle idling

Vehicle idling is one of the primary contributors to unnecessary fuel consumption. If you have onboard telematics devices in your vehicles, you can run reports to track vehicle idle times and identify any problematic patterns.

Coach your drivers on the importance of proper usage and set expectations around idling standards to help reduce the burden of burned fuel.

How to Manage Fleet Fuel Costs

1. Cost Tracking with Fuel Management Software

Whether your mobile assets get 20, 10 or only five miles per gallon, you need a fuel management system to manage and monitor fuel consumption and determine costs. That’s because, in terms of operational costs, fuel is the largest ongoing expense for fleets.

If you have dozens or hundreds of assets spread across several locations, trying to manually calculate total fuel costs can be a daunting task.

All of those drivers filling up at the pump multiple times per week (potentially daily even), can hinder a fleet fuel management plan that relies on manual entries. Spreadsheets with hundreds of rows eagerly await your input, while your mind is focused on troubleshooting other fleet issues.

Not only is this process mundane and prone to error, it’s not conducive to optimal productivity.

With fuel management software, you’ll be able to track fuel usage and automatically calculate fuel costs in real time.

This allows fleet managers to focus on the greater mission at hand and maximize operational efficiencies - while making work life a little bit easier.

2. Integrate Fueling Systems with Fuel Management Software

Although there are countless moving parts (literally), fleet fuel management doesn’t have to be complicated. There is no need for bulky hardware or complex and expensive programs.

Fleet managers have enough to worry about and spending time manually entering fuel entries from ripped and damaged receipts is not ideal.

Using fleet fuel cards or your on-site fueling system and integrating them directly with a fuel management software is the best solution to manage fuel costs.

This allows data to flow seamlessly from the time of the fuel purchase directly to the cloud-based fleet management software, without the need for any data entry or calculations.

With the best fleet fuel cards, you can limit fraudulent charges while also taking advantage of rewards and other promotional benefits.

3. An Automatic Digital Fuel Economy Calculator

One of the other benefits of using a fuel management software is having a solution to automatically calculate fuel economy.

Instead of having to browse around the internet to find a reliable fuel economy calculator and enter fuel information for each asset, fleet managers can use fuel management software, to automatically calculate fuel economy metrics for each asset.

Since managing costs, forecasting and budgeting are primary goals of fleet management, this feature presents the ability to instantly track fuel costs and even create custom reports.

The insights from using the automatic fuel economy calculator will provide fleet managers with the necessary data to analyze and take the best course of action in order to reduce fuel costs.

One aspect this could have a tremendous impact on is budgeting and a vehicle replacement strategy.

If assets start to approach a mileage or years in use that you’ve determined to be a time to replace, you could evaluate the asset’s fuel economy to see if it might be an opportunity to explore electric vehicles or even biodiesel.

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