Fleet Management

What Rising Fuel Prices Could Mean for the Fleet Industry in the Short-Term

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Everyone in the fleet industry is aware of the soaring gas prices we have suffered in recent months. This is a severe strain for this industry, which relies on fuel as its lifeblood. And it comes at a time when there has already been significant strain due to the pandemic exacerbating the driver shortage and emphasizing supply chain issues. In short, the fleet industry has a lot of problems right now, and rising fuel prices are one of the biggest. How is this surge affecting the supply chain, and what can fleets do to combat these soaring costs? 

Effects on the Fleet Industry and Supply Chain

The transportation sector is the backbone of our nation’s economy, and rising oil prices are just another blowout of many in the last couple of years. The worst part is that nobody is quite sure what will happen. WDBJ out of Roanoke, VA cites Thomas Duncan, who is an associate professor of Economics at Radford University: “Oil prices are one of those interesting prices because they’re really based on what people think is going to happen with the oil market, so they’re very forward looking.”

The outlook is not favorable right now, and fleet businesses are rapidly losing money. These businesses rely on fuel to keep operating, and they often don’t have wide margins to begin. Small fleet businesses may even struggle to survive these surging prices. WDBJ interviewed Lawrence Companies’ CEO Warren Groseclose, who outlined his company’s current situation: “On a weekly basis we burn about 23,000 gallons of diesel, both on the road and here in the yard, and just in the last week the increase in diesel prices has added about $23,000 weekly to our cost, which on an annual basis is $1.2 million.” 

Ottawa’s Wood TV interviewed Don Quarles, a board member with the Michigan Trucking Association. He has been in the trucking industry for 43 years and claims, “These are the highest prices I have ever seen in my life.” 

This problem is also affecting Ottawa. A Canadian truck driver, Elburn New, says that “It probably costs me over a two-week pay period about $1,800 more for two weeks for the fuel.” 

These extra costs don’t only affect fleet businesses. In the end, they’ll be passed on to the consumer. Whenever there is a strain on the supply chain, the average consumer will likely see it in their grocery and retail stores. Prices for everything are likely to go up when our economy is finally recovering from the pandemic’s terrible effects. Warren Groseclose asks, “[T]he question is how long can they [the trucking industry] sustain that? How long can the American consumer sustain that?”

How Can the Fleet Industry Respond? 

Fleets will undoubtedly have to make adjustments to counteract these record-high gas prices if they want to stay in business. Luckily, technology has come a long way, and there are many tools at a fleet’s disposal that can help achieve this goal. This section will discuss some of those tools, so you aren’t left struggling in the wake of rising fuel prices. 

Route Planning Software

Route planning software is one of the first solutions you should consider if you are looking to reduce your fleet’s fuel use. This tool uses machine learning, algorithms, historical data, and telematics to get your drivers to their destinations throughout the day in the most efficient way possible. It does this by detecting where they may run into traffic, construction sites, school zones, or other delays that slow you down and waste your fuel. It also helps you ensure that you have the correct number of vehicles on the road. This way, you don’t waste your resources, or one vehicle doesn’t have too many or too few stops, rendering it inefficient. With route planning software you can cut your fuel use down significantly, and cut your gas spending even as prices remain high. 

Eliminate Speeding

Driver behavior has a massive impact on your gas bill, and one of the worst culprits is speeding. There are so many reasons your drivers shouldn’t be speeding, not the least of which is their own safety. High-speed accidents are more likely to result in death or severe injury. And, of course, they are also more likely to result in hefty fines. However, speeding is also a massive waste of fuel. For every five miles that your drivers travel over 50 miles per hour, you pay an additional $0.20 per gallon of gas. 

Of course, you can’t be in the passenger seat with your drivers, but you can implement technology that tracks driving behavior. Using telematics and technology like Azuga SpeedSafe, you can track your drivers’ speed and ensure it stays within acceptable parameters. 

Eliminate Idling

Idling is another driver behavior that massively wastes fuel—Idling a truck wastes about 0.8 gallons of fuel per hour. This may not sound like a lot, but you may not know how much your fleet is idling. For example, if they’re stuck in traffic for a long time, taking a break in their car, or taking a phone call in a parking lot, they’re likely idling the engine. They might even be idling their vehicle if they're waiting on customers or colleagues. 

Similar to speeding, you can reduce idling by tracking the behavior. Telematics tells you how long each vehicle spends idling, along with how much fuel you’re wasting. This helps you take targeted action to reduce the habit. 

Cut Down on Fuel Prices with Azuga

Saving on fuel is challenging right now, but it can be done. If you partner with Azuga, we can help make it easy. Check out a demo of our technology and see all we can do for you.