They’re Back…. High Fuel Prices

03 Feb They’re Back…. High Fuel Prices

They’re Back….

It wasn’t too long ago that fuel prices were lingering between $3.80 and $4.40 per gallon. At that point many companies took an aggressive stance on fuel conservation. However, for most it was just a flavor of the month. Many companies joined in on the U.S. EPA “SmartWay” bandwagon which is designed to improve fuel efficiencies and reduced the environmental impact. That is all well and good but unfortunately; if a company doesn’t have an aggressive fuel conservation program in place then being “SmartWay” certified should be considered consistent with permitting the tail to wag the dog or maybe ready, shoot, aim is a better metaphor. There are numerous companies that pay an outside SMA (Subject Matter Expert) to fill out the required documentation. There obviously isn’t anything wrong with being “SmartWay” certified or using an outside resource to fill out the documentation. But the point is are you really impacting fuel economy or the environmental impact if you are not managing the one (1) factor that has a 30 to 35 percent impact of fuel economy, which is the driver? There is not one (1) single technology on the market that will have more of an impact than holding drivers accountable and since you’re now required to hold them accountable for safety (CSA 2010) why not put the tools and controls in place to hold them accountable for fuel performance?

Here are a few suggestions on how to put these controls in place.

• First ensure your equipment is performing to specifications and the preventative maintenance program maintains it as such.

• Put a fuel procurement process in place that will ensure you are maximizing your full- procurement potential. What are you paying compared to pump price? Rebates not cutting it?

• Develop an equipment certification process including some type of notification on the equipment. (Visible decal, sticker or notification on DVIR book.)

• Ensure tire pressures are monitored on a regular basis, no longer that 90 day intervals.

• Obtain a proper driving techniques video from your engine or tractor manufacturer and require the drivers to view and hold accountable for performance.

• There are a plethora of products on the market that will improve fuel economy but don’t waste your hard earned revenue on them until you have set the ground work within the culture of the organization.

• Put a driver performance program in place to ensure they are driving to the technology consistent with the equipment, maximizing fuel economy and equipment life. Compliment effort, reward good performance.

• Be aware that ECM data can be in error up to 12%.

Here are the 16 key factors that impact fuel economy all of which are all controlled primarily by the driver:

The economy is on the rise and along with it will be the accompanying increase demand for fuel and the inherent increase in price. How will you handle this variable cost increase? Are you going to pass the fuel surcharge on to your customers or are you going to attempt to retain a portion that will positively impact your profit-margin?

There are no silver bullets, however in the recent years there are many new technologies that do in fact increase fuel economy including a few oil and fuel additives. However, it is imperative to build the cultural foundation prior to procuring any of these items or you will only obtain a minimal return on your investment. Were you ever successful in getting your child to eat their vegetables after they’ve had the ice cream cone? Again, “Smartway” is a good program, but without corresponding processes, it just an exercise in futility.

Don’t shoot the messenger, but high fuel prices are on their way back.

Please feel free contact me at mike@mcbconsulting.com or 912-571-9149. I will be more than happy to assist you in determining the best overall solutions for you current situation.