Staying in business

Robin Dickeson of the Society of Motor Manufacturers and Traders, wants you to save fuel, save cash, and, ultimately, save the planet

Fuel is one of the biggest single costs for truck operators, accounting for some 30 per cent of operating costs, so its management is vital. An estimated 30 per cent over-capacity in the UK haulage fleet adds to the pressure and the recession brings even more intense competition and price pressure.
    
In spite of all this, there are almost certainly fleets that still fail to measure their fuel consumption, let alone manage a vital cost. Importantly too, fuel use is directly linked to CO2 emission, so if you know your fuel use, you know how much CO2 your vehicles produce.

Measuring fuel use
Reports from the Society of Motor Manufacturers and Traders and others confirm that a typical heavy truck, doing a more or less average 80,000 miles a year will use around 55,000 litres of fuel, costing about £50,000. Each litre of fuel produces 2.6kg of CO2 so that is 143,000kg or 143 tonnes of carbon dioxide. That sounds a lot, but one needs to measure it against the weight, or volume of goods carried.
    
Over a 10-year period, that truck will deliver goods worth some £100 million. It may cost nearly £700,000 to run and of its operating costs, some £235,000 or 40 per cent, will go to the government as tax revenue. But the issue of the government’s tax take and the haulage industry’s contribution to the nation’s economy and to the chancellor is another story for another time.
    
In the meantime, for a fleet of 50 trucks, the annual fuel bill will probably be around £2.5m and so fuel management is a big bucks deal. Most operators know that and use increasingly sophisticated tools to help them. But surprisingly and sadly, all too many firms still fail to measure and monitor fuel use, let alone properly manage a vital asset. Though of course, these firms are unlikely to survive and be with us in the future.

Management tools
There are few excuses for this failure to manage fuel, as the number and variety of fuel management tools is huge and growing rapidly. They vary from the fuel cards actively promoted by most major fuel suppliers through to sophisticated asset management systems, increasingly linked to real-time satellite truck tracking and diagnostic systems.
    
More immediately you can see an illustration of the range of firms and their products from your desk: Type ‘fuel cards’ or ‘fuel management’ into Google you should get pages and pages of entries for either. Usefully, websites like Fuelcards (www.fuelcards.co.uk) compare cards from different suppliers. Other design, produce and install fuel management systems, mostly to handle fuel dispensing systems and supplies.
    
Truck and engine makers also offer an increasingly sophisticated range of technologies to measure fuel use. For instance, the Cummins RoadRelay system and fleet support software includes an in-cab driver display unit to give instant real-time data on fuel use, trip data, engine operation, oil level and service data. Truck makers’ systems also offer similar services, using information from a growing range of on-board computer systems to give very detailed information about fuel use. For most operators, these systems are a vital tool in their asset management strategies.

Driver training
Day-to-day fuel use management is largely down to the driver. He or she is the front line and his or her foot the gas pedal almost certainly has the greatest influence on an individual truck’s fuel consumption. Because of this, most truck makers and big operators run driver development schemes to help drivers improve their efficiency.
    
This issue of the driver’s contribution is so important that governments have got in on the act. In the UK, the Department for Transport’s Freight Best Practice unit has developed the ‘Safe And Efficient Driving’ programme, Safed, with a growing range of leaflets, web-based advice, case studies and training schemes. Theirs, vehicle makers and many big operators experience show that with as little as a day’s training, an efficient driver can save between 10 and 15 per cent fuel consumption over a less efficient colleague. Go back to that annual fuel bill and even a 10 per cent saving is far too good to miss, particularly when the investment to secure it is very, very modest by comparison.
    
Sadly, the benefits of those training or driver development programmes can leak away like water into sand unless the driver’s performance is properly measured and monitored – another opportunity for fuel management.

Use of fuel cards
Fuel card systems will at the very least measure the amount of fuel that a driver draws. They also mean that a driver doesn’t need to carry and account for so much cash. Increasingly sophisticated on-board systems will measure the amount that an individual truck uses. Many can and report via the internet in real-time, with their data included in wider asset management systems that track vehicles, reporting on everything from vehicle position to load temperature or engine health. These wide-ranging systems also offer the opportunity to precisely measure the costs of each job.
    
The data can inform decisions about fuel buying; for instance the pros and cons of bunkered fuel versus supplies bought at truck stops. One other issue, which the raft of data has shown in more detail, is fuel theft. Previously this was quite difficult to define, but now that operators can and do compare data about fuel purchased and used by each truck, the discrepancies caused by fuel theft show more clearly.
    
A consequence is a growth in devices to stop the bad guys siphoning fuel from trucks. More and more fleets are fitting these generally inexpensive gizmos and seeing them pay for themselves in a matter of months. Tiss, one of the leading and more successful makers of anti-siphon kits reports steadily growing sales to fleets large and small. There is also a big safety benefit as most of these devices stop fuel spillage and as any motorcyclist will tell you, diesel on the road is a very unwelcome waste of money and can land operators in court.

The green aspect
And of course, there is CO2. We all know about the pressure to cut greenhouse gas emissions in general and CO2 in particular. At its most basic, this translates into an entirely reasonable demand to calculate carbon footprints. On that issue, the amount of hot air has pretty much matched the other emissions, but now the message is beginning to get through that if you know your fuel use, you can easily calculate your CO2 emissions.
    
Each litre of diesel burnt, in whatever engine, with whatever exhaust treatment system, if any, or even in a heating system, however else you burn it will produce 2.6kg of CO2. As more and more organisations ask their suppliers, including transport operators to define their carbon footprints, that is important. It is a simple key to understanding CO2 emission. As we saw earlier, it is important to relate the fuel use and emissions to work done. Like the wellknown cost per tonne kilometre, one gets a figure that shows the amount of CO2 per tonne (or per cubic metre) kilometre. A rather daunting expression, but one that we all need to understand if we’re to make a realistic comparison of fuel of emissions efficiency.
    
In any business, cost management is basic and can make the difference between the success and failure of a contract or even the entire business. Effective fuel management is obviously vital, as it tackles probably the biggest single part of an operator's costs.
    
Remember that fuel bill we talked about earlier and the opportunity for a medium size fleet to cut £250,000 from the bottom line? Also, remember that if you are managing you fuel well, some of your competitors will be doing even better. Remember too the 30 per cent over-capacity and the price pressures that brings. Competition is a powerful spur to development and so is the knowledge that if you don't, your competitors will find a way of saving costs and undercutting what you're doing.
    
Whatever else you do about fuel management, doing nothing is not an option, and you’ll need to continually review what you are doing, if you want to stay in business.