To paraphrase an old adage, “You can’t control what you don’t measure.” Nowhere is this truer than in fleet fuel usage. In fact, successful fuel management starts with successful fuel monitoring.
But, once you have a monitoring program in place, how can you use the information to optimize fuel usage throughout your fleet?
In this article, we discuss the basics of fuel monitoring, why it’s important, and how you can use fuel monitoring data to optimize fleet activities across the board.
Benefits Of Comprehensive Fuel Monitoring
The concept of fuel monitoring may seem very basic, but the data it produces and the way you put that data to use is anything but basic. Here are just a few ways that fuel monitoring may contribute to the successful operation of a fleet-based business.
1) Fuel Efficiency
Every fleet manager knows that fuel efficiency is one of the cornerstones of their day-to-day activity.
With fuel efficiency numbers in hand, you can make more informed and cost-effective decisions when it comes to things like:
- Routes driven
- Driving behavior
- Overall spending
- Vehicle operation
- Vehicle maintenance
This kind of data may also reveal solutions that can help managers improve one or all of these activities for a single vehicle or the entire fleet.
For example, fuel monitoring may reveal that one of your vehicles is idling more than the rest and wasting four gallons, or $15-worth of fuel every day. If the vehicle operates five days a week for a full year, that’s around $4,000 down the drain.
And that’s just one vehicle.
Analyzing fuel efficiency throughout the fleet can help you control spending and improve profits across the board
2) Fuel Theft
Diesel and gas are critical for the successful operation of your fleet, so identifying and eliminating fuel theft is one of the most beneficial things you can do with fuel monitoring data.
Fuel theft can take many forms both internally and externally, including:
- Outright theft (from lost or stolen fuel cards)
- Fuel skimming
- Odometer tampering
- Inaccurate reporting
- Unauthorized purchases
And that’s just the tip of the iceberg. In many businesses, fuel theft happens more often than anyone would like to admit, can go undetected for years, and can become a very real drain on your bottom line.
A fuel monitoring program can help drivers and managers pinpoint where and when fuel theft — be it accidental or intentional — might occur and reveal ways that all involved can avoid these mistakes and reduce future drains on the business’s profits.
If you’re using a fuel card to pay for gas and diesel (more on this later), be sure to use one that contains modern security features, including EMV chips and pre-use card activation.
Here’s how those two technologies work together to prevent fuel theft.
EMV Chips
An EMV (or Europay, MasterCard, and Visa) chip is a tiny microchip embedded in the plastic of the fleet card that generates a unique code every time your driver swipes to pay for fuel.
These codes are only valid once and cannot be used for any future transaction. That means if someone records your transaction and attempts to use the numbers to buy something else, the system will deny payment for that purchase.
Pre-Use Card Activation
With pre-use card activation, drivers must first activate the business gas card by sending a text from a specific linked cell phone number (i.e., their business or personal number).
If everything is correct, the system turns the card on and, when the driver swipes it to pay for fuel, authorizes the transaction. On the other hand, if something is incorrect, the card stays inactive when the driver swipes it to pay for fuel, and the system refuses the transaction.
This unique feature of modern fleet gas cards makes it nearly impossible for an unauthorized individual to make a purchase if the card is lost or stolen.
How? Because that individual likely won’t have the linked cell phone number and, therefore, won’t be able to activate the card no matter how many times they try.
Modern smart fuel cards also come with other security features you can employ to reduce and prevent fuel theft in all its forms. We’ll discuss some of those features when we talk about how to build a fuel monitoring system in the next section.
3) Maintenance Costs
Fuel monitoring can also help your business control another major expense: Maintenance.
Telematics often reveals small problems early on that, if left unattended, can spread to other, larger and more expensive systems throughout the vehicle.
Dealing with those small problems as soon as they develop can help you avoid the major problems that can cost your business hundreds, if not thousands, of dollars in repairs and the bottlenecks that may come from fleet vehicles being out of service.
Fuel monitoring can also help you stay on top of preventative vehicle maintenance to make sure all the vehicles in your fleet are operating safely and efficientl
4) Recordkeeping
Legacy fuel monitoring programs rely heavily on paper receipts to make their recordkeeping successful.
While this has worked in the past, improvements in technology mean that modern recordkeeping can utilize real-time digital data to make common and repetitive tasks much easier.
These tasks include:
- Maintaining fuel logs
- Invoicing
- Payroll
- Paying fuel taxes
Digital recordkeeping is also simpler for your drivers (who, let’s face it, already have enough to contend with on the road).
With some fleet credit cards, purchases are automatically recorded (including digital copies of any receipts) so that expenses don’t get lost or forgotten.
5) Fuel Spending
One of the most important aspects of fuel monitoring is the impact it can have on overall spending.
Even if your business isn’t concerned with fuel efficiency, fuel theft, maintenance costs, or recordkeeping right now, you may still want to focus on controlling what you spend filling up the tank of each vehicle.
While that often means finding the best price per gallon, it can also mean monitoring vehicle systems (typically through pre– and post-trip inspections) to make sure everything is running at peak efficiency.
With the help of vehicle tracking and fuel monitoring, you may be able to cut cents (or even dollars) off of each fill-up and even increase profit margins.
How To Optimize Fuel Usage
1) Refine Regular Routes
Depending on the type of fleet you run, your vehicles may visit the same destinations (or, at least, the same areas) on a regular basis. In such cases, you’ll likely be faced with multiple ways of reaching those destinations and areas.
Use telematics, and a good monitoring program, to identify fuel-efficient routes that satisfy the variables your fleet needs, including:
- Maximizing activity along the way
- Steering clear of high-traffic areas
- Avoiding rush-hour delays
- Staying away from rough roads that can cause vehicle damage
Then, once you’ve identified those routes, make them a regular part of the directions you provide to your drivers so they’ll get in the habit of using those corridors more often.
2) Improve Driver Behavior
Inefficient use of fleet vehicles can lead to more miles driven, wasted fuel, and increased wear and tear — all things that can cost your business money without providing a return.
Use your fuel monitoring program — and the telematics that make it possible — to identify negative behaviors such as excessive idling, rough stops and starts, aggressive cornering, and inconsistent highway speeds (just to name a few).
Then, train drivers to exhibit positive behaviors that improve fuel mileage.
You can even use the information coming in to design training programs for new drivers that get them into good habits right from the start.
3) Customize Maintenance Schedules
As we touched on earlier, preventative maintenance protects your fleet from expensive emergency breakdown repairs and saves your business money in day-to-day use.
Use telematics and fleet monitoring software to develop customized maintenance schedules. For example, data may reveal that the oil filters in Vehicle A wear out quicker than in Vehicle B.
With that information, you can schedule oil and filter changes for Vehicle A earlier in the cycle (e.g., every 2000 miles instead of 3000 miles) in order to avoid the reduction in power and efficiency that comes with a clogged filter and restricted oil flow.
With the help of monitoring data, you will be better positioned to customize each vehicle’s maintenance schedule to get the most out of this important asset.
4) Centralize Fuel Purchasing
Consider setting up a centralized department for fuel purchasing. It can be a single individual or a group of individuals, but they should be tasked with monitoring, refining, and optimizing the way your fleet purchases fuel while out in the field.
For example, give one or two employees the responsibility of taking the fuel monitoring data, analyzing it, and finding ways to:
- Establish spending controls
- Create rules and guidelines for drivers
- Manage business gas cards
- Compare suppliers
- Identify cost-saving opportunities
- Make sure drivers purchase fuel promptly and efficiently
Creating a centralized fuel purchasing department or manager can help ensure that cost-cutting measures aren’t being overlooked because of a breakdown in communication between managers, owners, and others with a controlling stake in your business.
5) Build Driver Accountability
Drivers are the front line in your fight against low fuel efficiency and high fuel spending. Building driver accountability into your workflow is one of the best things you can do to help your business stay on the road to success.
To do this, use the fuel monitoring data to incentivize good driving behavior. Set clear expectations, guidelines, and rules for your drivers (e.g., accelerate slowly and smoothly from a stop) so they have a framework in which to operate.
Then, create incentives and rewards for drivers who abide by the rules you’ve set. Finally, monitor the telematics data and distribute rewards to the drivers who improve their accountability and exhibit behaviors that result in high fuel efficiency and low spending.
Throughout it all, provide regular feedback so drivers see what works and what doesn’t.
6) Review Fuel Monitoring Data
To build on the saying we mentioned earlier, “You can’t control what you don’t measure on a regular basis.”
It doesn’t do your business any good to gather fuel monitoring data once and then forget about it entirely.
You don’t have to wade through the information every day — that can be overwhelming — but do your best to establish a schedule and review the data when the time rolls around.
For your business, you may have the time and manpower to monitor fuel data every day. Or, you may choose to do it every week, every two weeks, every month, or every quarter.
Some businesses find it beneficial to do a thorough review every six months. This gives drivers enough time to implement new rules and behaviors and for those changes to become evident in the fuel spending and fuel monitoring data.
It doesn’t matter which schedule you choose, as long as you stick to it. Reviewing your numbers regularly can help you see if the things you are doing are affecting your bottom line for the better or for the worse.
7) Conduct A Cost Analysis
Metric #1: Total Cost Of Ownership
Calculate Total Cost Of Ownership using data gathered from your fuel monitoring program and your tech stack (i.e., your fleet management software, telematics, and smart fuel card software) and the following formula:
Total Cost Of Ownership = Variable Vehicle Costs + Fixed Vehicle Costs
Variable vehicle costs include fuel, tolls, maintenance, repairs, and other expenses that fluctuate over time. Fixed vehicle costs include lease payments, insurance payments, permits, and other expenses that are roughly the same month after month and year after year.
Metric #2: Vehicle Cost Per Mile
Vehicle Cost Per Mile (VCPM) represents how much your business pays for each mile that a vehicle travels. The more efficient your fleet, the smaller this number will be.
You can calculate VCPM by taking the Total Cost Of Ownership for a single vehicle in a given month and dividing it by the total number of miles driven during that month (VCPM = TCO / Total Miles Driven).
For more information on calculating these two important metrics, take a few minutes to read these articles from the Coast blog:
8) Eliminate Non-Essential Weight
Carrying around non-essential weight (e.g., tools and supplies) can seriously reduce your vehicles’ fuel efficiency and increase the price you pay to keep your fleet moving.
Conduct an audit of everything in and on your vehicles and remove things that aren’t absolutely necessary.
9) Distribute Cargo Correctly
A vehicle that is overloaded on one side won’t be as fuel-efficient as a vehicle that is carrying a balanced load.
Find ways to store tools and equipment on both the left and right sides of the vehicle and, whenever possible, position tools, equipment, and cargo so that the weight is centered between the axles.
10) Maintain Tire Pressure
Improperly inflated tires make it harder for the engine to push the vehicle forward. When the engine has to work harder, it uses more fuel.
As a result, a vehicle with improperly inflated tires will have to fill up more often — and your business will spend more on fuel — when compared to the same type of vehicle that runs on properly inflated tires.
11) Make Vehicles More Aerodynamic
Aerodynamic improvements come in all shapes and sizes, but even the smallest among them can help to improve the fuel efficiency of your fleet.
For example, consider adding side skirts (a.k.a., side panels or aerodynamic panel skirts) to the bottom of your semi trailers or between the cab and rear axle of your fleet box trucks.
12) Match The Vehicle To The Job
If you just need to move a technician and their tool bag to a location across town, consider matching the vehicle to the job and using the smallest, most fuel efficient vehicle possible.
For the situation just mentioned, it’s much more fuel-efficient to send your technician in a company car rather than a full-size pickup truck. Why? Because the former gets much better fuel mileage than the latter.
How To Use Smart Fuel Cards With Fuel Monitoring
With the fluctuating nature of gas and diesel prices, fuel monitoring is vital for the success of your fleet. Without it, you’ll miss out on opportunities to make the best use of your assets, and control costs.
If you’re thinking about setting up a new fuel monitoring program — or revamping an existing program — consider making a smart fuel card the foundation on which you build everything else.
Why? Because smart fuel cards and their associated software give you unprecedented control over how your fleet spends money.
In the next few sections, we’ll discuss the core components of a robust fuel monitoring program and how smart fuel cards can make it even better.
1) Define Spending Rules And Limits
One of the first steps in building a fuel monitoring program is to define the spending rules and limits under which your drivers will operate. This information is best listed in your company vehicle policy so that drivers can access it at any time.
Good examples of spending rules and limits that you may want to consider include:
- The type/grade of fuel drivers are allowed to purchase
- The time of day and day of the week they are allowed to make purchases
- The brand of fuel they’re allowed to purchase
- The maximum amount they can spend at any one time or per day/week/month (or both)
Regardless of the rules and limits you choose, be sure that all drivers have been trained in these policies and have agreed to abide by them while they’re on the road.
If you choose to use a smart fuel card in your operation, you can set many of these rules and limits automatically to reduce the risk that a driver forgets or intentionally disregards the policies.
With the right smart fuel card, you can even set the system to flag transactions when a driver uses the wrong grade or the fill-up exceeds the tank capacity of the vehicle in question.
2) Get Accurate Fuel Consumption Data
The cornerstone of any good fuel monitoring program is the data available for analysis. While you could depend on paper receipts for the bulk of that data, there’s a much better and more accurate way to dig deep into your fleet’s fuel use: use a smart fuel card for all purchases.
The most advanced smart fuel cards (like Coast) come with software (a.k.a. a spend management platform) that gives you full visibility into every dollar spent for your fleet.
Smart fuel cards collect more accurate odometer readings to help you compute your mile-per-gallon consumption, through telematics integrations and smart rules that detect when an odometer reading is off.
With a smart fuel card as part of your workflow, you’ll be able to see line item purchase details for your entire fleet every second of the day.
3) Set Up Real-Time Alerts
Real-time notifications can help you stay on top of all of your fleet’s spending no matter when or where it takes place.
For example, you may choose to set the system so that you receive a live notification when a transaction is declined or looks suspicious.
Monitoring these notifications 24-hours a day allows your business to respond immediately if something bad happens so that the issue doesn’t get worse, get more expensive, or do more damage than necessary.
4) Implement Fraud Detection
As we mentioned earlier, fuel theft can become a very real drain on your business’s bottom line if you don’t take steps to prevent it.
The combination of telematics and some advanced smart fuel card software will allow you to set up geofences — virtual geographic boundaries — to detect and prevent fraud and theft.
For fuel purchases, this technology allows you to automatically decline payment if the transaction and company vehicle location don’t match.
5) Review Transactions
No matter how many notifications and real-time alerts you receive, the best way to control spending is to review all transactions within your fuel monitoring program at least once a month.
You could, of course, do this manually and go through fleet receipts one by one. But, let’s be realistic for a moment, if you’ve ever had to deal with paper receipts, how many times have you had everything you need to complete the process?
Nine times out of ten, you’ll be missing receipts because one driver forgot to turn theirs in and another driver lost theirs on the road.
Smart fuel cards eliminate this issue by automatically assembling all the records you need and bringing them together in one place for easy access, review, and reporting.
Build A Fuel Monitoring Program With Coast
Building a fuel monitoring program may seem daunting at first, but the benefits are well worth the time and effort. Coast can help.
The Coast fleet and fuel card can help organizations of any size and structure get a handle on their fleet fuel expenses with Visa acceptance, no-cap/no-minimum-spend rebates, and real-time transaction reporting.
If you’re struggling to keep business expenses in check and optimize fleet fuel usage, take a note from this Coast success story.
Erin Hutson, owner of Saint Louis-based JED Transportation, used Coast’s comprehensive reporting features to gain unparalleled transparency and insights into the business’s fuel expenses.
That meant she could track and analyze spending patterns, identify areas for optimization, and make data-driven decisions quickly and easily.
“After switching to Coast,” Erin says, “our level of confidence really went up because there are real-time controls that we have in place.”
By incorporating these features into all of their daily operations, JED Transportation can not only create or maintain an effective driver coaching program, but they can also aim to minimize expenses and find new ways to conserve fuel throughout their fleet.
To learn more about how Coast can contribute to fuel monitoring and management and improve your fleet activities as a whole, visit CoastPay.com today.
Ready to give Coast a try? Get started here.
And, for more help with all aspects of running your fleet-based business, visit our resource center on CoastPay.com.
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