We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we will assume that you are happy to receive all cookies on the Business Car website. However, if you would like to, you can change your cookies at any time
The start point for the best source of fleet information |
Leading industry figures reveal fuel-saving measures that will make a substantial difference to one of a fleet's biggest outgoings. Rachel Burgess reports
In this new age of austerity, businesses, just like the Government and consumers, must make tough decisions regarding cutting expenditure.
An obvious target is fuel, especially as it's the second largest expense in operating a fleet of vehicles.
The first factor fleets should consider is whether they have the best cars for lower fuel costs. Despite many companies fixing a 160g/km CO2 cap on car choice, there is still a massive difference in CO2 output and therefore fuel usage, says Chris Chandler, associate director of Lex Autolease's consultancy services: "There is a 46% difference in sub-160g/km vehicles, with a range from 40-76mpg.
"At the moment, we are seeing very focused action on using the right vehicle in terms of tax and fuel costs."
According to Alphabet, the average CO2 rating of all cars on its leased fleet fell by 9%, from 165/gm to 150g/km, between 2006 and 2010. "The average CO2 rating of cars ordered by Alphabet customers so far this year is 140g/km and is on track to drop to little more than 130g/km in three years' time," says Paul Hollick, general manager sales development. That would translate into fuel savings equivalent to paying 27p per litre less at the pumps compared with seven years ago.
However, Hollick points out that different types of journeys and driving styles have a significant impact on consumption too. And some types of low-CO2 cars, such as hybrids, offer comparatively heavy fuel use on typical business trips such as motorway trips.
Despite that, alternative-fuelled vehicles offer motorists another fuel-saving option in addition to the efficient diesel and petrol cars on the market, says the Society of Motor Manufacturers and Traders.
"Hybrid vehicles use a combination of battery and engine power to lower emissions and enhance mpg while pure electric vehicles cost about £0.01 to £0.02 per mile to run."
Competitive electric vehicles for widespread fleet use aren't yet available, but that will change in the next 12 months. EV fuel cost based on 10,000 miles a year is around £300-£400, compared with petrol at £1200, says Kenneth Bowling at Driving Risk Management. "These vehicles are at present quite suited to city use, although some thought must be given to range and performance to ensure suitability for intended business use. Typically, they are best suited to short trips in congested conditions," he says.
Hybrid vehicles are a more flexible choice for now says Bowling, and choosing these or EVs is an excellent way to demonstrate a company's green credentials. "One down side is perhaps their lack of kerb appeal."
Other options include LPG: almost any petrol-engine car can be converted to run on LPG autogas, says LPG association UKLPG. Fuel savings of around 25% versus diesel can be achieved according to Ingram Legge of Greenfuel: "Savings will vary depending on vehicle, but, for example, a Ford Focus 1.8 will cost around 15p per mile on unleaded, 11ppm on diesel and 8ppm on LPG. LPG can be purchased from over 1400 stations in the UK and averages around 62p per litre.
"However, Smart fleets with a return-to-base operation, can drive down the cost of fuel by a further 15% by installing their own low-cost mini filling stations."
The second area that fleets should examine is fuel cards, which can greatly reduce business costs, says Jakes de Kock, The Fuelcard Company marketing director: "Not only do they give fleets access to exclusive discounts of up to 10p per litre on the national average diesel price, they also help mangers to monitor and control their fuel spend. Fuel cards deliver substantial immediate savings at the pump, which vary depending on the type of fuel card. For example, a company spending £350 a month on fuel per vehicle would save £21 per car or van if they acquired a fuel card (based on an average saving of 6p a litre). Over 12 months, this makes for a saving of £252."
"Fuel cards make costs more visible," says Phil Williams, Euroshell UK fleet sales manager. "Industry experts suggest that by taking note of the 'fuel eternal triangle' - miles driven, volume of fuel purchased and cost of fuel - all underpinned by a disciplined fuel card regime, financial savings of 15-20% can be achieved."
Journey planning has become increasingly ubiquitous over recent years thanks to the popularity of satellite navigation. For fleets, it is now recognised as one way of saving time and, of course, fuel costs.
Telematics company Trafficmaster says it is "generally accepted that satnav cuts down on the number of wrong turns, reducing mileage by 16%". And in research carried out by the firm, customers using its Smartnav system report an average four hours saved per month in journey time.
"Fleet management systems can further take out the guess work of planning the best route," says John Lawrence, sales and marketing director at Trafficmaster. The company's Fleet Director system uses a combination
of vehicle tracking technology, satnav, two-way messaging and reporting,
plus a new function, 'optimum job scheduling capability', that lets the customer send job lists with addresses to Fleet Director and "within minutes the optimum job schedule is calculated and the best routes, avoiding traffic problems, is instantly sent to the appropriate vehicle".
Rival telematics firm Tracker also recommends monitoring private journeys to keep fuel costs down. Managing director Stephen Doran says: "Fleet managers should monitor and report private journeys, monitoring fuel usage while respecting employee privacy. A privacy button ensures the distance travelled is the only data recorded, ensuring mileage based claims are fair and valid."
Other technology - ranging from accurate mileage audits to driver behaviour systems - can also help to reduce fuel consumption.
Services such as GreenRoad, which can save around 10% fuel consumption, give drivers and fleet managers access to an individual driver web portal system. These online tools help managers and drivers assess how they are driving, how driving habits can be improved and to analyse risk by driver, organisation or fleet-wide. These applications are backed up by advice on tailored training and incentive programmes. One of GreenRoad's customers, Sheffield Insulations, has seen a reduction of 9.7% in fuel use since it installed the technology in its vans.
Mileage audit is another area to consider: TMC's Mileage Audit system often means a 25% reduction in overall mileage claims.
Paul Jackson, TMC managing director, says: "TMC Mileage Audit delivers savings primarily by discouraging excessive mileage claims, streamlining expenses administration and delivering management information to support fleet operations.
It costs a flat rate of 99p per driver per month so "it will pay for itself even if fuel and mileage costs per driver fall by less than two business miles per week", says Jackson. The technology "makes it easy for a driver to record individual journeys, enter round trips with a single click, save time by storing regular journeys and even to categorise trip as business or commuting".
"Shopping around for fuel is one of the key ways that a fleet can reduce its overall fuel spend," says Jenny Powley, sales director for Arval's card division.
For example, Arval found there was a 19p differential on diesel between the cheapest and most expensive forecourts in the first week of June, ranging from 115.9p to 134.9p per litre. For unleaded this differential was even higher with a 24p discrepancy across the country - the lowest price at 110.2p per litre compared with the highest cost of 134.2p per litre.
Powley continues: "This demonstrates that fleets can make significant savings if they point their drivers in the direction of cheaper sites, which can be the supermarkets but is not always necessarily the case. Implementing a clear fuel policy on where and when drivers should buy their fuel isn't being over the top - it is actually a very simple way of cutting fleet fuel bills."
However, Powley adds: "It is also a good habit to get into to take advantage of lower cost sites if you happen to be passing one, eliminating both the need to deviate from your route later or to buy at a high cost location.
"Planning fuel purchases into their schedule makes sure drivers buy at the best price and are less likely to panic buy when they run out of fuel and waste time leaving their planned route to find a petrol station."
She concludes: "Evidence suggests that distress fuel purchases, where employees hit the red and find the nearest petrol station, could cost as much as £109 per driver per year in route deviation alone. That doesn't sound a lot but on a 500-strong fleet that adds up to almost £55,000 a year. It is estimated that on average a driver loses five miles each time they fill up: 2.5 miles to find the petrol station and 2.5 miles to get back on route again."
This, however, isn't the only kind of non-essential journey that can be curtailed. A business trip two hours away for a two-hour meeting typically entails spending six hours out of the office - time that can be used to boost productivity in the workplace as well as providing employees with a better work-life balance, says UK director of Tandberg (now part of Cisco) Gary Lloyd: "Using telepresence and video conferencing, rather than travelling to meetings, can save money and time as well as easing some of the environmental consequences of business car travel.
"There are always occasions where physical meetings can be advantageous and in these instances there is still a place for travel and company cars. But what video can do is ensure that people can meet more often in a face-to-face scenario."
He continues: "Video is proven to increase the speed and quality of team decision making. By removing the delay of travel and providing expertise at anytime, businesses can implement new, more efficient business processes resulting in money earned and competitive advantage."
Web conferencing firm Netviewer agrees that no technology can or should substitute face-to-face meetings.
However, Oliver Schwartz from Netviewer says web conferencing is "an excellent alternative for routine or day-to-day business meetings".
He says: "This offers flexibility and efficiency and can be used on the move because all that is required to hold a meeting is a laptop and an internet connection. Web meetings takes seconds to initiate and during meetings participants can share documents on the screen or through file transfer."
Public transport is often not even considered by fleet operators as a viable option for unavoidable business travel, but could cut costs if used wisely.
It can be particularly viable in cities and for sectors with a strong green interest or government pressure to be green, says Kenneth Bowling from Driving Risk Management.
"There are some benefits to businesses, with tax relief on taking public transport, particularly bus travel. Obviously, this is only applicable when personnel don't need to transport equipment, tools, etc."
He admits that on longer journeys the cost of rail or air fare, along with the convenience of door-to-door travel, can sway choice towards the vehicle.
"They key is to have a company policy that encourages use of public transport. And of course, encouraging employees to use public transport is a great way to reduce their work-related road risk."
Rental firm Enterprise advises some customers to consider public transport as one solution of many for business travel. Rob Ingram, director of business rental, says: "We recommend public transport as a
core option if the conditions mean that it is the best and most efficient way of getting from A to B and it can help a business or its employees meet companies' cost objectives.
"But often it requires forethought. Using the train, for example, may only be practical if tickets are booked well enough in advance and the service is both available and to a timetable that is convenient."
"It's surprisingly easy to improve our cars' fuel efficiency by performing a few basic checks," says Nationwide Autocentres technical manager Bill Collins. "Removing any unnecessary accessories and weight from you car is the first step. The main culprits for increasing drag - and increasing fuel consumption by as much as 10% - include roof racks and boxes, and cycle carriers, so if they're not in use, remove them."
Mike Wise, head of Kwik-Fit Fleet, says incorrectly inflated tyres can increase consumption by up to 10% and could reduce tyre life by a quarter.
Closing windows at anything above 20mph reduces drag, while switching off aircon, too, can save around 10% fuel consumption, adds Collins.
"As this is isn't always practical," he says, "it pays to ensure the system is serviced regularly - at least every two years. Finally, don't skimp on servicing. Servicing at specified service intervals ensures your vehicle is running as it should be, and an engine with fresh oil and new filters will run more efficiently than one that has been neglected."
BusinessCar magazine ©2019
Business Car Magazine © 2020 | Business Car is part of NS Media Group.
