Article

Technology to the Rescue

Dispatch and routing systems, fuel purchasing applications and other solutions are proving their fuel-saving worth.

June 2008, TruckingInfo.com - Feature

by Jim Beach, Technology Editor, Technology Editor - Also by this author

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Many fleets are finding that the technologies they have implemented to mange their rolling assets or to record vehicle and driver performance can also help save huge amounts of money related to fuel costs. Essentially, these systems attack the fuel problem from two angles: They help fleets use less fuel, and they help make sure fleets pay the lowest price possible for the fuel they do use.

In the first instance are systems such as fleet management and mobile communications systems and on-board recording devices that monitor vehicle speed, idling time and other operational factors.

Of course, mobile communications tied to fleet management software has long been used by large for-hire carriers to improve their efficiency in terms of route planning and driver communications. And private fleets have used on-board recorders for a number of years to track their drivers and generate electronic logs among other tasks.

Knowing where its trucks are enables a fleet to reduce deadhead and out-of-route miles. That was the driving force behind most fleet management software. The operational efficiencies these systems provide has proven to be very effective, and virtually every large to medium-sized fleet uses some type of these systems.

"The basic premise of this fleet management software is to reduce your deadhead miles by planning better," says Rick Halbrooks, vice president sales, McLeod Software, Birmingham, Ala.

"For instance, one of our early customers was able to save over $200,000 per year just by reducing deadhead miles. So most people realize that if you have more than 25 or so trucks they need a fleet management software package to help manage deadhead miles. That's been the basic return-on-investment proposition for years, that deadhead miles cost you money. And this year, the big critical issue for most of our customers is the price of fuel, so they are looking at ways to reduce fuel use even more. And what we found is that out-of-route miles are a large part of that. Trucking companies are losing money on out-of-route miles."

In response to this demand, McLeod recently introduced an out-of-route module called Fleet Miser for its LoadMaster software customers who also have a mobile communications system and a mileage package such as PC*Miler or Rand McNally.

"The general concept for fleet management software has been to show a return on investment in less than three years, but now with fuel as high as it is we are showing a return on investment in most cases in less than 12 months for our basic transportation management software based on deadhead miles reductions," Halbrooks says. But out-of-route miles cost a fleet even more, because usually, they involve a loaded truck.

Fleets calculate the rate they charge customers based on the miles a mileage program tells them it will take to deliver a load from point A to point B. Each mile a driver deviates from that is no only an extra mile's worth of fuel, but also a mile the fleet is not getting paid for.

With McLeod's Fuel Miser, when a truck deviates from his route, a pop-up window or e-mail is sent to pre-determined people at the carrier's main office, typically a dispatcher or a fleet manager. Sometimes, these instances can be explained by detours due to road construction or accidents. Sometimes, they occur because a driver decides to stop by his home on the way to deliver a load or for other reasons. Once alerted the truck is off route, the dispatcher can contact the driver to find out why. The module allows the carrier to find out the status of the vehicle, and reports can be created by driver for specific date ranges that show all of that driver's out-of-route miles. This report helps identify habitual offenders and fleets can take the appropriate remedial action. The information can also be used during driver reviews or to calculate driver bonuses.

Halbrooks says that at current fuel costs, if out-of-route miles are reduced by 150 miles per truck per month, a fleet can save $100 per month per truck. For a fleet of several hundred or thousand trucks, that can add up to significant savings.

PeopleNet, Minneapolis, recently introduced an MPG Guarantee Program designed to help fleets improve their miles-per-gallon performance. PeopleNet says the goal of its program is to increase mpg from 5 percent to 10 percent. The program involves a year-long collaboration during which PeopleNet Professional Services will audit customer practices, then develop and implement a plan to reduce fuel usage.

The program focuses on fuel purchasing, maintenance, driver habits, operating efficiency and equipment specs to establish benchmarks for each fleet to follow.

ONBOARD RECORDERS

Onboard recorders, on the other hand, monitor driver and vehicle performance by measuring speed, idling time, hard braking, excessive acceleration and other elements. These types of systems, historically used by fleets to ensure safety, can also help save fuel because the things they record can have a direct impact on fuel usage.

Xata Corp., Minneapolis, offers an onboard-recorder-based fleet management system that users can access anywhere via the Internet through its XataNet product. The system helps fleets save fuel by "measuring the things that affect fuel economy," says Tom Flies, senior vice president of product strategy. "We track idle time and our systems can show what mpg you are getting at various speeds. So instead of getting an overall average of 6.5 on a trip, we can show that you are actually getting 7 mpg from 55 to 67 and you lost your fuel economy by driving faster than that, by idling, not using the cruise enough, and by not shifting properly."

The system goes beyond just recording what's happening with the truck, Flies says. "Not only are we keeping score on fuel economy, we are providing the tools to coach drivers to get better fuel economy."

System such as Xata's collect a variety of information fleets can use to improve driver performance. "We are collecting a tremendous amount of data on the vehicle and the driver's activities. We created a set of rules called Smart Checks that different people within a fleet can collect to use as they need."

For instance, if a driver idles for more than 10 percent of the time at a stop, an alert can be sent to the driver manager or maintenance department, or both. These alerts allow different people within a fleet to subscribe to the information they need to effectively manage their part of the operation. The alerts can be sent via email, a page to a cell phone or on screen via XataNet's dashboard user interface.

Mike Baney, CEO of Cadec, Manchester, N.H., says his company's onboard-computer-based fleet management system helps control fuel costs by giving customers "a snapshot of exactly what their baseline is in terms of certain statistics, how many miles are being driven, specific truck statistics such as average speed, idle time, routes and other information." All this information is compiled in the company's Mobius fleet management platform, where fleet managers can look at historical data on these performance indicators.

Baney says many fleets "have no idea how much their trucks are idling. They may think they are idling four to six hours a day, when in reality they are idling 10 or more hours a day. They just don't know. We found examples of trucks idling for hours while sitting in the yard during maintenance sessions.

"Most customers can reduce their idling time just by bringing awareness to it and letting drivers know that this idle time is being monitored and managed."

DRIVER PRODUCTIVITY

Making drivers more productive is another way fleets can reduce fuel usage. "We use driver performance report cards that use key indicators such as idle time, rpms, sudden decelerations or accelerations," Baney says. The system records activities that may waste fuel, such as driving too fast or incorrect shifting." Armed with this information, driver managers can work with their drivers to improve their performance.

Fleets can set targets for their drivers to meet, and the reports the Cadec system generates from these indicators will assign a green, yellow or red notification based on how many of these events fail to meet specifications. These reports can be used in training and to determine performance-based driver bonuses. Using these reports coupled with bonuses for mpg and idle time fleets can provide an incentive for drivers to become more productive.

The Cadec system also can use the data to ensure efficient routes and to manage inventories on trucks so duplicate trips or special runs can be avoided. All of these things equate to savings in terms of fuel use.

Saving fuel is an issue for local and service fleets as well, according to Bert Gillespie, director of sales for QES, San Diego. QES recently introduced OmniVision Metro for local fleets, especially service fleets or other fleets that travel irregular routes.

"These companies want to reduce excessive idling," he says. "A small business owner with 20 or 30 vehicles can be affected as much by excessive idling as a large fleet."

The system relies on terrestrial-based GPS communications, which keeps the cost lower compared to a satellite communications-based system. Users can access the information they need over the Internet via a Web-based application that further reduces the cost. "Company mangers can log in from anywhere they may be to see what's happening in their fleet," Gillespie says.

Once logged into the system, users see pie charts for several areas such as speed, idling and other functions. The pie is cut into red, yellow and green areas. Clicking on the red slice allows managers to concentrate only on the problem vehicles, allowing them to take steps to address that particular vehicle and driver. The system allows historical views using Google Maps that show where the vehicle has been and how long it was at each location.

Magtec, Willowbrook, Ill., recently introduced a Speed and Idle Management feature to its M5K security device that allows fleets managers to remotely control idle and speed.

Bob Morisset, president and CEO, says that following the development of the company's wireless keypad security system, customers began asking for ways to have better control over their vehicles. A dispatcher might be able to see that a driver is speeding, but if the driver fails to respond to his mobile communications messages, there is little the dispatcher or driver manager can do.

The company developed an acceleration control application that allows fleet managers to gradually shut down a speeding truck in this instance. The SIM application follows along in a similar vein.

"Because of the acceleration control application, our people said they could also control idling and speed based on geo-fencing parameters. For instance, if a driver goes into California, where idle time is limited to 5 minutes, the M5K system can shut down an idling truck after 5 minutes while that truck is in California. When the truck leaves the state, the system allows the truck to idle longer.

While many fleets use speed governors, these have to be manually adjusted when a truck is in for maintenance. The M5K SIM product allows the fleet to limit speeds remotely. It's being evaluated by the provincial government in Ontario, Canada, which just passed rules that require truck to be speed-limited at 65 mph. The Magtec application will limit speed to 65 mph while in Ontario, but allow the truck to run at a faster speed outside of the province.

When you can control truck speed that way, "The savings is huge," says Cadec's Baney. The company's Fleet Control cellular-based GPS system allows fleets to control the system remotely. Based on American Trucking Associations figures, he says, a truck traveling 125,000 miles per year will burn $3,000 less fuel over the course of a year if top speed is reduced from 70 mph to 68 mph. Reducing the speed from 70 to 65 mph can save about $7,000 per year.

"I just did one for a 100-unit fleet. Thirty percent of his fleet travels 75 mph or more. Based on $4 a gallon at 75 mph 30 percent of the time, by reducing those 30 trucks from 75 to 68, he is going to save $280,000 annually. And reducing the rest of his fleet from 70 to 68, he is saving $170,000 annually."

PAYING LESS

Fleets also are using software that helps them plan fueling stops along their routes by constantly searching for the lowest-priced fuel. These systems do not help fleets burn less fuel, but help assure that no matter what the price of fuel is at a given time, they are buying the least-expensive product while on the road.

TMW System's Expert Fuel product is one such system. It creates a fueling plan to help minimize the cost of fuel purchased.

"Expert Fuel is a client server application that interfaces with the carrier's existing dispatch and mobile communications system and provides the driver with a route to follow and an optimum fueling plan that tells them where to stop and how much to buy," says David McKinney, of Beachwood, Ohio-based TMW Systems.

The system factors a carrier's negotiated discounts with fuel providers, the mpg of the tractor, purchase constraints such as minimum fuel amounts and creates a fuel purchase plan for the driver to follow.

Mike Alexander, director of driver services for Paschall Truck Lines, Murray, Ky., says saving fuel is a major issue, and the Expert Fuel system has made a real difference.

"Expert Fuel system checks the fuel stops along that route and comes up with a fuel average for that route. Then the system helps us purchase fuel at a price below that average. For instance, on a recent day, the high price in our system was $4.53 a gallon and the low price was $3.77. So just in my fuel network, there was a 76 cent difference between locations," he says.

Paschall runs about 1,000 trucks, and Alexander says that saving a penny a gallon translates into about $30,000 a month in savings.

The system takes a number of factors into account such as fuel taxes, as well as the daily prices, to come up with the best stops. "A lot of times, going 50 or 100 miles further to cross a state line can drop the price 20 cents a gallon. Since we are buying at least 100 gallons per stop, you can see how that can add up," Alexander says.

"The system also factors in the negotiated discounts we have with different vendors, and using this, we have found that things we thought were true no longer are. For instance, we used to fuel in Pennsylvania when we traveled to the Northeast; now we've found it might be better to fuel in New Jersey or Virginia."

When a driver is dispatched, he reports his fuel level and the system generates his fueling plan. Paschall sets a minimum of 100 gallons per stop so drivers don't have to stop more than once or twice a day.

The system can also be set up to evaluate fuel stops that might be off the route a few miles, although the system defaults to look only at stops along the route. "An example of that would be in San Antonio," Alexander says. "Three of the major chains are on I-10 and I-45 just has one. We factor in a 2-mile allowance either way so we can pick up those chains on I-10 if we are running on I-45."

Paschall has been using the software for just over two years and Alexander says their driver compliance has risen to 95 to 96 percent. In the beginning, veteran drivers were somewhat resistant, he says. "They would stop at those locations that are in our fuel network, but they would not always stop at the one the system identified. As prices have increased, however, they have come to understand how important it is to follow the plan."

For their new drivers, on the other hand, the system has been a "Godsend," Alexander says, because "it's one less thing for them to worry about. They get their route, their fueling plan and they are on the way."

As McKinney notes, the key is that no matter what prices are, the system helps ensure the fleet is paying the least amount possible.

It also makes sense of the various kinds of discounts fleets may have with the chain truckstops. "Some things we never considered before were things like rack prices," Alexander says. "Some of our discounts are based on the vendors cost and sometimes, the discount you think is the highest is not the best when you figure their actual costs in. That's something that would be hard to figure out for each vendor at each location each day. This software helps us manage that."

McKinney adds that expecting a driver to figure out the various discounts and fuel taxes is unreasonable. "Drivers have enough to deal with and don't need to be trying to mange these costs as well."

Fleets that lease their vehicles can also take advantage of many of these fuel-saving technology options. PacLease, for instance, offers customers the PacTrac vehicle tracking and monitoring system based on Xata Corp.'s XataNet product. Ryder Truck Rental also offers a vehicle tracking and monitoring package for its customers. A key benefit for leasing customers is that the cost of the system is folded into their lease arrangements, spreading the payments for the system over the term of their lease.

With fuel prices on the rise, the investment necessary for these types of systems is no longer such an impediment. McLeod's Halbrooks says the demand for their Fuel Miser has taken off this year, with orders so far running at three times last year's levels.

"The high prices make the payback so much shorter, our customers look at it almost like free software."

Whatever method fleets choose, cutting fuel usage by even a small amount can lead to large savings over time.

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