Editorial: Cutting Your Fleet’s Fuel Costs

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ewspapers, including this one, always report on the news, however grim it is, but rarely offer solutions. Not so this week.

In this issue we not only write about the high price of diesel, and the prospects for even higher prices in the future, but we also offer some advice from fleet executives who have managed to save their companies substantial amounts of money and reduce their risks in the petroleum market.

While the average national price for retail diesel declined a smidgen last week — 0.2 cent to just over $1.50 a gallon — the average is still nearly 12 cents a gallon higher than one year ago.

And a host of analysts is warning that diesel could go substantially higher in coming months as the home-heating season approaches and competition for distillate increases. Throw in the ongoing political instability in the oil-producing regions and uncertainty about the freaky weather patterns that have gripped the nation since last winter and you have the makings of a potentially steep price rise.

As Bob Costello, the chief economist for American Trucking Associations, put it, fuel price “volatility has increased sharply since 1999, and that makes it very difficult to make business decisions.”

Our Page One story this week offers the strategies that several fleets have adopted to try to beat the fuel price ups and downs.

Those tactics include fuel hedging, which is not for the faint of heart, and a modified version of hedging, which removes the extremes from the equation, limiting the savings but also limiting the risks.

Some fleets have concentrated their fuel purchasing in one truck stop chain or one brand of fuel in order to receive special volume discounts.

ther fleets have negotiated discounts for using a particular fuel card.

And some carriers are letting technology work for them, using real-time price data to direct their drivers to particular regions to buy their fuel, or even to particular truck stops.

Others have cut maximum speeds in order to increase fuel efficiency, and at least a few fleets have begun offering their drivers bonuses for increasing their fuel economy by changing their driving habits.

We hope the examples we’ve cited help you manage your fuel costs. And if you have any additional ideas that you’d like to share with your colleagues on how to trim costs, please share them by forwarding them to us at tteditor@trucking.org.

This story appeared in the Sept. 8 edition of Transport Topics. Subscribe today.