With the current forecast for stable fuel prices, fleet managers are finding it difficult to reduce fuel costs. Several years ago it was perhaps a switch to alternative fuels such as compressed natural gas or propane auto gas that led to fuel-cost savings. It was relatively easy to recoup the additional cost of alternative fuel and technology because of the drastic price differential. Today, however, is a different story. Top management often requests fleet managers to reduce costs. Even with current fuel prices, a large chunk of an agency’s budget is often fuel. This creates a challenging environment for almost every fleet manager. Proper management and a little outside-of-the-box thinking can yield savings. Reducing energy directly correlates to reducing fuel consumption which in turn reduces fuel costs. Thus far, most fleet managers have picked the low-hanging fruit — reducing unnecessary idling. Going beyond this, the next step can be actively and proactively managing an energy plan.
Current fleet operations — build on what you have Taking a global look at current fleet operations from time to time provides insights and strategies for squeezing a few more pennies out of an already tight operation. Starting from the ground up, everything energy-related can be an opportunity for improvement. Begin with shop operations where reducing energy reduces dollars spent. Consider simple things such as upgraded LED lighting and energy efficient shop equipment. Although the savings may not be directly related to vehicle operations, reducing costs is a meaningful endeavor in the eyes of upper management. Also, it is critical to champion current efforts. Beyond the big rolling billboards of vehicles, overall operations and accomplishments of a fleet often go unnoticed.
Fleet maintenance and utilization Streamlining and improving fleet maintenance practices are other areas to review. There are several maintenance practices to consider. One of the larger fleet expenses is underutilized vehicles. Most fleets have them, and make considerable effort to justify them. Whether it is a backup vehicle or a specialty vehicle used for limited applications, these are often the highest cost-per-mile units. Many times these cannot simply be eliminated without a plan to provide users the proper equipment to continue operations. Establishing strategic relationships with equipment rental companies or short-term leasing companies are suggested options. Government agencies may have the opportunity to form intergovernmental agreements for the purpose of sharing underutilized equipment. In the end, eliminating equipment without affecting operations will contribute to energy and cost reductions.
Future acquisitions Fuel prices are predicted to remain low and stable for the next several years; however, this is not a guarantee. Oil prices can be extremely volatile, which can be triggered by small events. The challenge is planning for unpredictability. Creating strategies to increase efficiency can provide some shielding during an unpredictable event. It may be a balancing act between fleet standardization with a one-size-fits-all approach and right-sizing specific vehicles based on operational requirements. In the end, look at the entire operation from a utilization, application and standardization perspective. The answer is finding the balance and actively managing the operation in a continuously changing environment.
If you would like to discuss this or any other fleet issue with NTEA, contact Chris Lyon, NTEA Director of Fleet Relations, at chris@ntea.com.
Product options. NTEA offers a variety of products to meet your company’s needs on Shop NTEA (including the 2017 Fleet Purchasing Outlook, Cross-Border Compliance Guide, and Rear Visibility FMVSS 111 Field of View [Rearview Camera] Conformity Manual and Kit).