Fundamentals of fuel management for city fleets

For most fleets, fuel is the No. 1 cost center, and its fluctuating nature can make managing it tricky. According to a recent benchmarking report, fuel costs made up 50 percent of fleets’ budgets on average. With the right tools and techniques, however, fleets can reduce fuel waste, optimize the fuel economy of their assets and reduce fuel expenses.

The basics of fuel management
Effective fuel management requires robust and accurate data, the analysis of which gives fleets specific insights they can use to implement strategies to help control fuel spend. Fleets can use a number of different fuel tracking methods, from comprehensive spreadsheets to fuel cards, on-site fueling systems and telematics.

While manually tracking data can provide decent results, automated tracking methods are more efficient and reduce the risk of human error, ensuring cleaner data. An added benefit of using automated fuel tracking methods is the ability to integrate the data collected onto a single fleet optimization platform. When all your fleet data is in one place, it interacts to paint a clearer picture of your operation and provides deeper insights into the source of inflated fuel consumption and costs, such as poor preventive maintenance (PM) compliance, mechanical issues, driver behavior issues, extensive idling, and even fuel theft or misuse.

Choosing the best fuel tracking tool for your fleet
While one fuel tracking tool might work great for some fleets, it may not be the best option for others. Understanding your fleet’s needs at both the operational and organizational levels can help inform you which tool makes the most sense in the short- and long-term. Determine what problem or problems you’re trying to solve and get specific. Do you simply need to track fuel transactions, or do you need to use fuel consumption data to help justify the purchase of a new asset to stakeholders?

To address the former problem, fuel cards are likely the best option and keep fuel purchase details together. Choose a fuel card that offers detailed data collection at the pump, including driver ID, odometer readings and the amount of fuel purchased. To address the latter problem, however, more data than fuel purchases is needed—a lot more—so something like telematics or a fuel management system would work better.

Another point to consider is what tool you can get the green light for. Tom Rowlings, assistant fleet manager at the city of Cambridge, Mass., has extensive experience with different tracking tools. After joining the city of Cambridge, he ultimately determined that the problem he wanted to solve was collecting stronger, more usable data to inform fleet decisions. “We never had any way to calculate vehicle downtime, or even return on investment, or overall cost of doing business. There was never a way to capture that. I started looking for fleet management software,” he explains. “Normally, when working in a municipality, the purchase would go to the lowest bidder. But in this case [the tool we wanted] was on the GSA contract, so it makes the process much simpler.”

To meet the goal of capturing usable data, Tom decided that Cambridge needed a tool that provided integration features to consolidate data collected from multiple sources. “With the integrations with other softwares, it allows us to see cost-per-mile. It allows us to see vehicle downtime, vehicle utilization, everything all in one place.”

While establishing the core problem you’re trying to solve can better inform you what fuel tracking tool to use, it’s still important to shop around and ask questions to truly understand how these tools can support your fleet, including what they can and cannot do. After all, the last thing you want to do is implement a system you thought did X, Y and Z, only to find out it doesn’t.

Tips to reduce fuel costs
Because managing fuel costs involves both direct actions, such as optimizing routes and reducing idle time, and indirect actions, like proper PM and driver training, there are immediate actions fleets can take before deciding what and if a new fuel management method is the right way to go.

Fleets can optimize fuel usage and gain better control of fuel spend by understanding the fleet’s specific needs when it comes to fuel tracking. When implementing strategies to reduce fuel costs and choosing the right tools, managing fuel doesn’t have to be a burden—it can be a strategic advantage.

Rachael Plant is a senior content marketing specialist for Fleetio, a fleet management software company that helps organizations track, analyze and improve their fleet operations.