If you thought your fleet fueling was going to get cheaper because the spring weather is approaching, check again. Gas prices increased 17 cents last week alone. The national fueling cost for gas is $3.33 a gallon. Most don’t believe the worst is over. It might be time to pull out a pen and paper as a fleet manger and start redoing the old fueling budget for 2011.
Yes, diesel fuel prices have gone up 12 straight weeks and will probably go up several more weeks but what has caused this? We all know that it has been a very cold winter, so we have had a diesel fuel supply issue to start. Out of a barrel of crude oil, it only produces 25% of heating oil or diesel fuel. Basically, there is a competition between heating homes of fleet fueling for trucks. Internal supply and demand issues for the same product battling for pipeline space, storage space, etc.
It certainly seems that “outsourcing” is the buzzword these days across most industries. Fleet fuel management is no exception. If you are the president, finance or operations manager, or even fuel manager at a fleet company, you should know that now is the time to outsource your fuel management. I’m not talking about outsourcing to a company located out of this country in India or China, but to a fuel management team of experts located just outside of Philadelphia. Sokolis Group was founded by Glen Sokolis, a fuel industry expert who has focused on diesel fuel prices, fuel cards, mobile fueling and overall fuel management in almost every aspect of the business for over 20 years.
You spend months putting together your fleet management budget. Looking at all line items to determine if you have accounted for everything your fleet management department needs or if you’re over budget and need to cut. There is always that one line item that worries because it is so unpredictable, fueling. Whether it is your diesel fuel price or gas price for your fuel management, you know in almost all cases it can go anywhere.
I was going to write an article on Friday about what happened to all of those people, who way back when, predicted $100 a barrel for crude oil and increased diesel fuel prices and gas prices right along with it. In fact, I admit, I was one of those people. Wasn’t almost everyone? Well, many things have happened since then.
I wouldn’t expect your fleet fueling prices to fall anytime soon. China ordered banks to hold back more money as reserves in its latest move to control inflation. The government has used a series of interest rate hikes and increases in reserve levels in an effort to slow inflation in its robust economy. This kind of stuff usually helps the markets settle down and keep things like diesel fuel prices from raising. Houston we have a problem. Its call the Middle East, home of sun, fun (if you like getting shot at) and oh yes, oil.
Are you a fleet manager or fuel manager? Are you the president or CFO of a fleet company concerned about your company’s bottom line, again? Are you tired of sitting on the edge of your seat, sweating, worrying and waiting for the Department of Energy to report that diesel fuel prices are up per gallon for the nth week in a row? Accept the inevitable; diesel’s national average price will be what it will be. You can’t control it. It’s out of your hands. However, do not throw in the towel just yet. Take a deep breath, sit back in your chair, roll up your sleeves and empower yourself. Now is the time to gain control over those things that you CAN control. Be your own superhero. Help save your fleet management company. Save time. Save money.
Diesel fuel prices have been climbing and the trucking industry has felt that over the last few months. We all have seen gas prices go up but how much has it been. Let’s call it a new gas price high for the past 28 months. For simple economic here is a new one, supply is good and demand is weak and gas prices still climb and put a pinch on fleet fueling for companies.
The Department of Energy (DOE) just released diesel fuel pricing data that has diesel fuel prices rising for the 10th straight week jumping 7.5 cents to $3.513. It’s the largest increase since December 6, 2010 early in this rise of fleet fueling prices for trucking. This increase puts the diesel fuel price 74.4 cents higher than this same time last year. Is there any good news in the fuel management world or is everything glum?
Well, some good news is that crude oil prices have come down over the past week. Things have settled a little bit in Egypt and it usually takes a solid week or two before diesel fuel prices catch up at retail locations as compared to the open market. In a nutshell, if nothing crazy happens, your diesel fuel prices should be going down to that $3.40 level soon. I know, it’s not great, but it’s still better than $3.513 for fleet fueling this week.
The key right now to most of your fuel management solutions is to get to the core of your fueling programs. If you feel like your fleet company’s understanding might not be up to par, then it’s time for a fuel analysis on the who, what, where, how and why of your fuel management.
Who?: Who is the person in your fleet company’s organization that really has his finger on this? Is it you? Is it the fleet manager? Fuel manager? (Maybe in title only.) Fleet fuel manager? Director? Or maybe, it’s really no one at all.
What?: As in– what does your fleet fueling program look like? “What does that mean?” you might ask. Do you have as many fleet cards or fuel card companies as you do locations? Are you using mobile fueling and not sure why? Or, do you think you should be using mobile fueling but don’t know how to do it? Do you have a fuel saving plan as part of the program?
Where?: Where do your trucks go to buy diesel fuel? Are you using truck stops, card locks or do you have a mobile fueling company coming on location to fuel your trucks where they are parked? How do you know what fleet management approach is best for your fleet company’s vehicles?
How?: How are you going to improve your diesel fuel buying if you already believe you are buying well? Another question is how do you know that you really are buying well? Who told you that? How can you be certain? How do your fueling purchases compare against other fleet companies? How are you going to change your fuel management system? It’s hard and even though it’s a big expense item most companies usually push it to the back burner. How do your fuel cards or fleet cards work? How is the fuel auditing being done on all your fueling transactions?
Why?: Why are diesel fuel additives so expensive? Why does your fleet credit card charge a fee? Why does your fuel inventory never match at the end of the month? Why don’t you see fuel savings when your fleet management keeps putting new fuel management systems in place?
These are very important questions that most fleet managers or someone in your organization should really be looking at. As I have said before, and it might sound crazy, but we talk with more companies that need our help than don’t need help. Most of us have heard the expression that a little knowledge is a dangerous thing. This is diesel fuel buying we are talking about. It’s not time to be dangerous, its time to be smart. Increase your knowledge and get the answers to your questions. There is safe ground to stand on and you can improve your company’s bottom line. Consult with a fleet fueling expert and start implementing a fuel management program that you can count on.
Here is a list of what is applicable to fleet management operators – of what’s been extended for an additional year by the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010: