Fuel is the number two expense for every trucking company and one of the most volatile. Over the years, trucking companies have implemented various strategies to lower and control their fuel expenses.
In recent years, carriers have found ways to mitigate and offset their fuel expenses. These are the top 10 methods trucking fleets use to lower their diesel expenses:
- Driver Behavior and Practices
- Reducing top-end speed and unnecessary idle time
- Adopting of Auxiliary Power Units (APUs) on tractors
- Implementing driver behavior coaching and incentive programs
- Encouraging the use of cruise control
- Providing driver incentive programs to reward best practices
- Power Equipment
- Using lower viscosity engine oils
- Keeping equipment maintained, including tire pressure and rotation frequency and position
- Running 6 X 2 drive axles where permitted
- Adopting the aerodynamic equipment including wheel covers, gap reducers
- Trailing Equipment
- Installing lift axles on trailers to reduce rolling resistance
- Adopting the latest aerodynamic equipment including side skirts and trailer wings
- Equipment Specifications
- Matching truck specification with the area of operation
- Purchasing the latest fuel-efficient truck design
- Install high efficient alternators
- Installing the very latest in safety technology to minimize rapid decelerations and inconsistent speeds
- Fuel Purchasing
- Implementing a fuel-surcharge program
- Buying fuel on wholesale rack index-linked contract
- Negotiating discounts at truck stops or join a buying program
- Trip Planning
- Pre-plan trips for drivers to optimize for:
- Best price
- Out of route miles; and
- What point on the route to fuel
- Buying fuel in locations with lower taxes
- Identifying the optimal time to fuel trucks at truckstops so that idling is minimized
- Implementing a route-line fuel optimization solution
- Planning trip start/end times to avoid areas of high traffic congestion
- Pre-plan trips for drivers to optimize for:
- Customers
- Working with shippers to decrease driver wait times to load and unload since delays of two hours or more results in drivers driving 3.5 mph faster decreasing fuel consumption in the process
- Business Intelligence
- Implementing SONAR’s forecasted overnight change in ULSD- new to the market is a product that we developed at SONAR that provides a look forward of wholesale rack prices, giving fleets visibility on where diesel prices are forecasted to head, with 90% accuracy and down to the rack level. This solution, exclusively offered through SONAR, enables fleets to time their diesel purchases based on the expected change in diesel prices at the wholesale rack.
- The reason this works is that diesel prices at the wholesale rack are linked to trading activity that happens on the CME futures exchange and the time it takes for the prices to change by wholesalers. Wholesalers adjust their prices after trading activity is closed, allowing for SONAR to project where prices are to be the following day. Effectively, SONAR clients get to “arb” the diesel market.
- Corporate Culture
- Successful carriers and independent contractors understand that one of the easiest paths to profitability is not spending money. Fuel, for many carriers, is the second-largest variable expense. Educating drivers and non-drivers on the importance of fuel economy to the sustainability of the business should be a primary objective.
- Provide incentives to improve fuel economy. A growing trend among carriers is the implementation of ‘Driver Scorecards’ to compare behavior and results to desired benchmarks. Utilizing MPG in these scorecards provide a direct feedback loop for drivers to understand how they are performing versus the rest of the fleet. Some carriers have went further and have provided financial incentives for achieving above average MPG, relative to their peers, under similar conditions.
- Weather
- Adoption of the latest weather forecasting technology such as SONAR’s Critical Event Center that overlays extreme weather events on major interstates and freight markets.
- Integration of critical event data such as road surface conditions and ambient temperatures into route planning and navigation software to minimize driver delays to meet delivery and pick-up windows.
As announced yesterday, January 19, Forecasted Overnight ultra low sulfur diesel (ULSD) change and ULSD next-day price are now on available on the SONAR platform and free to current SONAR subscribers through Valentine’s Day. If you are interested in learning more about SONAR or the new Forecasted Overnight ULSD data-set, click here.
