October 13, 2009
• Glen Sokolis, Sokolis Group • Bookmark +
If you are exploring ways to improve your fuel management program, on-site fueling could be the right solution for your fuel planning process.
If the terms mobile fleet fueling, on-site fueling, mobile refueling or wet hosing don't ring a bell, let me elaborate. When your fleet is parked off hours, a fuel truck drives to your location and fuels your fleet of trucks right where they are parked.
This practice has become more popular every year. Why? Your company can save a lot of money on drivers' costs by not having to pay them to fuel the vehicle.
Remember, time is money. Look at the numbers:
* Stopping for fuel takes a minimum of 20 minutes.
* The value of the driver and the truck is at least $65 per hour.
* Stopping three times a week for fuel amounts to at least one hour of time or at least $65.
* For a truck that uses 150 gallons a week, that $65 adds 43 cents per gallon to every gallon.
* The cost in lost time for fueling your fleet is $3,250 a truck annually.
However, before you make plans to revamp your fuel program and implement this mobile fleet fueling method, there are a few things you need to know:
1. Choose the proper vendor and check their references.
2. Make sure they have the proper insurance for fuel spills and name you as an additional insured.
3. Choose a company that has the technology for fleet fueling, such as bar code readers, which record all of the necessary fuel data for each individual truck. This is certainly better than a company that writes the gallons manually.
These last two guidelines are the most important, and where we see fuel managers making the most mistakes:
4. Price: Fuel suppliers offer price as cost to retail, cost plus, or our mark up. The most visible and trackable fleet fuel price you should ask for is OPIS Daily Contract average and then your fuel company's margin or mark up over OPIS. If you don't have that pricing agreement, you are most likely paying too much.
5. Audits: As the fleet manager or fuel manager, you do all of the heavy lifting for your fuel management program. Then, if you're like many managers we've worked with, you get to this critical part and drop the ball. It's called a fuel audit. You need to check each invoice to make sure your price is matched against the margin over OPIS that you have negotiated with your fuel vendor.
About 85 percent of the time, no one checks the pricing. Without your knowledge, your fuel company raises their margin because you don't have a contract and you're not auditing your fuel invoices. Before you know it, your margin has gone up 15 cents a gallon. You also may be assessed line item charges for obscure things such as an environmental fee, delivery fee, and invoice fees, among other descriptions. These charges can rack up another $5 to $25 an invoice, and most fleet managers don't realize they shouldn't be charged for them. Don't be fooled.
Mobile fueling is a great way for your fleet to save money on labor costs and out-of-route miles, and it can possibly reduce the number of trucks needed to run your operation. However, most fleet managers always think price. The effective fleet manager thinks and knows cost. So ask yourself, "What is the true cost to fuel my fleet?" You may be surprised.
Glen Sokolis is president of Sokolis Group, a nationwide fuel management and fuel consulting company, www.FuelManagementSokolisGroup.com. You can reach him at gsokolis@sokolisgroup.com or (267) 482-6160.
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