31 Aug Fuel Cost Control
Fuel is the number one (1) variable cost that presents the biggest challenge for leaders in the transportation industry because it’s directly impacted by the laws of supply and demand as well as ramifications from global political events. In short, it’s the most variable of variable costs. As such when the U.S. Economy picks up steam transportation volume increases and fuel prices are usually ahead of the curve. Conversely, when economy starts to slow profit margins dwindle and fuel prices drop behind the curve. Moreover, even with the advent of fuel surcharges if they are not attuned fuel costs will impede profits. There are a plethora of roaring gimmicks to control fuel costs but nothing; nothing has a greater impact on fuel economy than the driver, which can be as much as thirty-five (35) percent. The unpleasant fact is that if the economy continues to grow, the demand for fuel will follow suit as will the escalation of fuel prices. Whether the economy is on the rise or falling like the temperature on a winter night in Minnesota, the only permanent solution is a continuous fuel conservation program.
The key to any project of this nature is the support from senior management and must be driven (pun intended) from the bottom up. A successful fuel conservation program is not a flavor of the month and must become ingrained into the fabric of the organization’s culture much in the same manner of a successful safety program. In short, a fuel conservation program will mirror as well as support the safety initiatives of the organization and assist in the improvement of CSA scores. This will require the development of a fuel conservation team comprised of individuals from all departments as well as levels of organization that are willing to work on a team with consistent goals without regard to organizational rank and/or grade. This will create the buy-in needed to ensure the success of the program. Additionally it will require a project lead that is capable of working and implementing the goals of the team rather than a personal agenda. Please contact me if you’re interested in developing a fuel conservation program to keep your fuel costs under control.