They say that money makes the world go round, but when you manage a fleet of business vehicles, fuel is the true lifeblood of your operation. Of course, fuel and money do go hand in hand – take your fill of the former, and you’ll find your wallet emptying of the latter.
Fortunately, effective fuel management can help you to save thousands of dollars a year by supercharging your fleet’s fuel efficiency, and stamping out fraudulent gas payments and accidental overspending. Not to mention that it can also help to drastically shrink your carbon footprint – something we should all be working towards in 2020.
But what exactly is a fuel management system, and should you be using one? Read on, and we’ll answer all of your burning questions…
What is Fuel Management?
Put simply, fuel management is the process of monitoring and managing your fleet’s fuel consumption. It involves allocating fuel expenses to drivers, keeping track of each vehicle’s fuel inventory and usage, and working to push fuel costs down and fuel efficiency up.
A person who’s in charge of fuel management can often be found analyzing fuel spend budgets to make sure that they’re stuck to, optimizing driving routes for fuel efficiency, and ensuring that individual drivers are doing what they can to avoid wasting precious (read: expensive) gas.
Historically, fuel management was conducted the old-fashioned way – with pen and paper records, and reams upon reams of gas receipts. Fortunately, nowadays, fleets have access to intelligent fuel management systems that make the process a whole lot easier…
What is a Fuel Management System?
Fleet fuel management systems automate the process of fuel management; reporting on your inventory and monitoring your vehicles’ fuel usage, giving you the accurate visibility you need to cut costs and boost fuel efficiency. Automating this process means minimizing the errors you’d be likely to see if you were inputting all of this data manually.
While some companies provide pure fuel management systems, the easiest and most richly beneficial way to get started with automated fuel management is to install a fleet management system that offers strong fuel management capabilities. That way, alongside your fuel reporting features, you’ll also benefit from a range of other useful functions – such as automated route optimization, driver behavior monitoring, and engine maintenance scheduling – which can help you improve fuel efficiency.
For the whole fuel management shebang, we’d also recommend integrating a fuel card system. As well as accurately tracking fuel spend across different stations and drivers, these systems also come with a number of measures to help prevent fuel fraud and overspending.
The Top 4 Benefits of Fuel Management
Whatever fleet fuel management system you plump for, you’ll have to pay for it – so what makes that additional expense truly worthwhile? Here are four awesome benefits to gain from using a fuel management system effectively:
1. Major cost savings
Like we said, a fuel management system will cost a little money – but the fact that it can help you save a ton more should be a key selling point. After all, fuel costs are the second-largest expense that trucking fleets currently face, on average amounting to just under a quarter (24%) of a business’s overall yearly costs. (Fuel costs are outmatched only by driver wages, which account for an average 33% of overall costs.)
So, how can fuel management help you save on gas and diesel costs? Well, simply by giving you complete visibility over your fleet’s fuel usage, empowering you to cut back where you can, reducing fuel spend as you go. It can do this by:
- Keeping track of fuel usage so that you can identify trends – is there a particular car or driver who uses more than they need to?
- Preventing drivers and third-parties from spending your money fraudulently (more on this below!)
- Tracking your drivers’ behavior to ensure they’re not wasting fuel
- Optimizing your drivers’ routes for fuel efficiency
- Alerting you of engine faults (which can lead to reduced fuel efficiency)
If your business adopts a fuel card program, you’ll also be able to cap the amount of money each of your drivers can spend on fuel in a set period (whether by day, week, or month). This can go a long way to preventing overspending among your drivers.
So, what are the numbers? Savings will vary from fleet to fleet, but according to Derive Systems’ savings calculator, a fuel management system could help a fleet of 15 heavy-duty trucks that travel 15,000 miles annually to save $12,285 (and 4,095 gallons of fuel) per year. Meanwhile, a fleet of 15 light-duty vans on the same mileage could save up to $8,190, and leave 2,730 gallons of fuel un-guzzled. Of course, the savings only increase as the fleet size and mileage grows.
Did You Know? Fleets that travel interstate need to be aware that fuel costs can vary massively across different regions of the U.S. Gas in the Western States costs around 20% more than the national average, while in California you can expect to pay about 50% more. In the Midwest and the South, though, you can enjoy gas that’s usually between 5 and 10% cheaper than average.
2. Eco-friendly credentials
In minimizing the volume of gas that your fleet consumes, you’ll also be shrinking your carbon footprint.
Alongside helping you to ensure your fleet adheres to federal emissions standards, this brings with it the obvious benefit of minimizing the damage you inflict on our long-suffering planet, in which fleet businesses can play a big part – in 2018, EPA (the United States Environmental Protection Agency) reported that vehicles were responsible for 28% of the US’ greenhouse gas emissions, with light-duty vehicles spewing out 59% of these emissions, and medium to heavy-duty trucks causing 23%.
But there’s more. Showing yourself to be environmentally conscious as a business can help you to win more clients and customers, and give them another reason to be loyal to you. In a 2020 survey from IBM and the National Retail Federation, just under 80% of participants said they valued sustainability in a company, with more than 70% of these adding that they would pay, on average, 35% more to businesses that are eco-friendly.
So, if it’s a choice between you and your nearest competitor, you’re likely to have the edge if your fleet’s greener than theirs.
3. Supercharged fuel efficiency
As you’re likely to already know, a vehicle’s fuel efficiency is a measure of how effectively it converts fuel into energy. The more fuel efficient a vehicle, the less fuel it needs to travel further. Usually, fuel efficiency is measured in MPG (miles per gallon). You’ll also see this referred to as fuel economy.
Fuel efficiency is an important consideration. After all, it dictates how much fuel your vehicles need to use – and thus, how much you need to spend – to get them where they’re going. While a vehicle’s fuel efficiency will depend in large part on its model and its age (newer vehicles must adhere to certain fuel efficiency standards), the MPG it’s able to achieve will also be affected by how it’s driven, where it’s driven, and the condition it’s kept in.
Depending on the features your fuel management system offers, it should be able to help you with this by:
- Tracking inefficient behavior among your drivers, such as excessive idling, harsh braking, and driving over the speed limit
- Identifying any inefficient routes your drivers are taking – for example, those that include a lot of detours, cover more difficult terrain, or often get clogged with traffic – so you can plot cleaner alternatives
- Helping you keep your vehicles in their most fuel efficient condition by highlighting opportunities for engine maintenance, and enabling you to schedule services
4. Air-tight anti-fraud measures
It’s always a shame when you put your trust in your drivers, and they repay you by siphoning your gas money for their own personal use. But alas, it does happen, and through two main methods:
- Misuse: when a driver uses company money to buy gas for their own personal use.
- Slippage: when a driver uses company money that’s intended for gas to buy personal items.
In both cases, the driver will report their fraudulent purchase as legitimate business fuel spend. Fortunately, using fuel management – and particularly fleet cards – you can go a long way to preventing this.
Fleet card systems can track expenditure, purchased items, and even purchase locations so that you can pinpoint anything suspicious. They can also be used to block purchases on anything that isn’t fuel or maintenance, and set spending caps. With these controls, you can ensure that there’s only enough money free to buy fuel for each journey, minimizing the risk of misuse or slippage.
But it’s not always your own drivers that are out to use your money unlawfully: unfortunately, gas stations are a hotbed for payment fraud from third-parties, suffering from an increased risk of crimes like card skimming (which is when thieves tamper with card machines so that they record card details for them) whenever your drivers fill up.
To combat this, many fleet cards present extra layers of security at the point of sale – for example, drivers may have to enter a personal ID number, or their vehicle’s odometer reading, in order to complete a purchase. This helps to prevent unauthorized people from successfully using your card details, even if they manage to clone them.
Did You Know? As recently as 2019, Visa reported that cybercrime groups were specifically targeting gas stations.These spots are attractive to fraudsters because they tend to lack secure payment technology, especially when compared to other retail establishments.
The Best Fleet Fuel Management Companies
The below fleet management systems offer some of the very best fuel management capabilities that we’ve seen on the market (alongside some other stellar features for managing your fleet). Read on to find out what makes them so great…
Quartix: Best for Small Businesses (one to four vehicles)
There are two key reasons that we recommend Quartix to smaller businesses: firstly, it’s affordable, with prices starting at $14.90 per vehicle, per month (we understand that smaller businesses often have smaller budgets). Secondly, Quartix offers nice, short contract lengths of 12 months. As a new business, things are uncertain, and you may not want to be tied down for years ahead – 12 months is about as short a term as you’ll find in this industry.
Besides those practicalities, Quartix offers some core fuel management features, including: driver behavior monitoring; vehicle servicing and MOT reminders; IFTA fuel tax calculations; fuel card integration with Fleetcheck; and a smart CO2 emissions reporting feature that we’re particularly impressed by!
Samsara: Best for Medium Fleets (five to 25 vehicles)
Samsara tends to be more expensive than Quartix (its average pricing sits between $27 and $33 per vehicle, per month), but you’ll certainly get a lot of bang for your buck here.
This sleek, sophisticated system offers the best fuel usage reporting that we’ve seen. Vehicle by vehicle, these reports show current fuel levels, how much fuel has been used over a specific period, fuel efficiency in MPG, the estimated cost of fuel, the amount of time the engine spends running, and the amount of time spent idling. As well as this, Samsara provides a fantastic automated route optimization feature, which ensures that vehicles travel the shortest distance – thus using as little fuel as possible – to get all jobs done. Samsara also provides gamified driver behavior scores (who isn’t motivated to do better by a little friendly competition?), plus vehicle maintenance scheduling.
Verizon Connect: Best for Large Fleets (26 or more vehicles)
Verizon is our pick for large businesses, simply because it can collect an impressively wide variety of data. This is ideal for large businesses – with lots of different windows for cost-cutting and efficiency-boosting – but not so ideal for smaller, simpler teams. Verizon is also more expensive than Quartix and Samsara, but its price is more than justified by its myriad capabilities.
In terms of fuel management, we’re fans of Verizon’s fuel efficiency report, which breaks down a number of factors to determine how fuel efficient each of your vehicles are. We’re also impressed with its unique lost fuel report, which tells you how much fuel your fleet has lost through overfills and more, as well as its clever carbon footprint report. Verizon also monitors driver behavior, and its more expensive price plans also support maintenance scheduling.
The Types of Fuel Management
Outside of the type of fuel management systems we’ve already covered, it’s also worth understanding two strains of fuel management technology that operate within a vehicle’s mechanics: Active Fuel Management (AFM) and Dynamic Fuel Management (DFM).
These two forms of engine technology, both of which have been developed by General Motors (GM), aim to increase fuel economy without reducing performance (and without the need for smaller, force-inducted engines).
Let’s take a look at active vs. dynamic fuel management, what they are, and how they work:
Active Fuel Management (AFM)
What is Active Fuel Management?
Also known as Cylinder Deactivation, the Active Fuel Management system was first introduced in 2005. It’s a technology that can recognize when an engine’s full power isn’t needed – namely, in light driving conditions – and automatically shut down half of the engine’s cylinders in response. Then, when the driver demands more power (such as by accelerating), these cylinders are reactivated.
Engines are very powerful things; during everyday driving and cruising, vehicles usually only actually need a fraction of that power, meaning the engine is running less efficiently than it could be. By shutting down cylinders that aren’t actually needed, fuel that would otherwise be burnt and wasted is saved.
How Does it Work?
AFM works thanks to a combination of smart, built-in software and simple hydraulic valves. These work together to recognise when full power isn’t needed, and deactivate either four or three cylinders (depending on whether the engine is eight-cylinder or six-cylinder, respectively). Fuel delivery to these cylinders is halted, while a solenoid system collapses the relevant valve lifters to decrease pumping losses.
Did You Know? Active Fuel Management systems are said to improve fuel efficiency by up to 12%.
Dynamic Fuel Management (DFM)
What is Dynamic Fuel Management?
Introduced in 2019, Dynamic Fuel Management – also known as Dynamic Skip Fire – is Active Fuel Management’s much-improved successor.
The thinking behind Dynamic Fuel Management is the same as that which inspired Active Fuel Management. However, while AFM can only shut down half of an engine’s cylinders at any one time, DFM can shut down as many as are appropriate; this means that the vehicle is always running on as many – or as few – cylinders as it needs, truly optimizing the engine’s efficiency.
How Does it Work?
DFM is somewhat more sophisticated than its older sibling. A complex controller constantly monitors the vehicle’s accelerator pedal, running rapidfire calculations to work out how many cylinders are needed to match the acceleration the driver is pushing for. And when we say rapidfire, we mean it – the controller is capable of solving these calculations 80 times per second.
Meanwhile, an electromechanical system controls the cylinders’ valve actuation, while oil pressure from solenoids control ports in the hydraulic valve lifters, thereby activating and deactivating their latching mechanisms – causing the valves to open and close on demand, and their cylinders to activate and deactivate.
Did You Know? Engines with DFM systems are able to operate as many as 17 different patterns of cylinder use.
Final Thoughts: What’s the Importance of Fuel Management?
We won’t beat about the bush: fuel management is an incredibly important endeavor for any fleet manager. Considering that fuel accounts for almost a quarter of the average fleet’s yearly costs, we’re possibly right in thinking that your fuel spend could stand to be trimmed. And, with fuel management, there are so many ways to get there – whether by fine-tuning your fuel efficiency, capping your budget, or stopping driver slippage. After all, doing so could save you upwards of $10,000 a year (and that’s just for a fleet of 15 vehicles).
There’s also the fact that, in 2020, we all need to pull together and show up when it comes to minimizing our environmental impact. With vehicles the guiltiest culprits behind the US’ greenhouse gas output, both the planet and your carbon footprint could benefit hugely under the guidance of fuel management, which can help you to ensure that your vehicles burn as little fuel as possible to get all of their jobs done.
And it’s not just the earth that’ll thank you – if you tell them about your efforts to be greener, environmentally-conscious clients and customers (that’s about 80% of consumers) are likely to hold you in their favor… which, of course, equals more revenue for you.
So, where to start? As we’ve suggested, try looking into fleet management systems that come with solid fuel management functionalities. As a starting point, check out our favorites: Quartix if you run a simple business and a small fleet, Samsara if your fleet is mid-sized and growing, and Verizon if you run a more large-scale operation. And, of course, check out fuel card programs too, for an extra layer of insight and security. Combined, these systems will provide all you need to cut those costs, go a little greener, and send efficiency through the roof. Good luck!
