To paraphrase a saying used by military logistics personnel, “fuel is blood.” In the transportation industry, if a company wastes fuel or spends too much money purchasing it, that company will “bleed” to death. Getting good fuel mileage begins with spec’ing a vehicle correctly; reducing the price of the fuel purchased through a dedicated strategy is how costs can be controlled. Fuel mileage can be increased through improving equipment and training drivers to operate more efficiently.

• Reducing the overall use of fuel should be of utmost importance when spec’ing new equipment.

Fuel is normally the second largest operating cost for any motor carrier (just behind wages when measured as a cost-per-mile factor). When spec’ing company equipment, fuel economy should be a major consideration for a motor carrier.

An aerodynamic vehicle design, combined with a productive and efficient gear ratio and the right engine, can make a tremendous difference in fuel costs. However, when it comes to spec’ing for fuel economy, some specs or equipment modifications make more sense than others.

Spec’ing equipment that will maximize fuel economy efforts is the best approach. In general, today’s vehicles are far more fuel-efficient than in the past, but motor carriers still need to choose equipment that is appropriate for the job it is expected to do.

Specification questions

Equipment specification is a key area in improving fuel mileage. There are questions the maintenance manager should bring to the vehicle manufacturers when spec’ing equipment:

• Are the engines properly sized and set for the workload being placed on them?
• Does the engine have a programmable system that allows the maintenance manager to set the performance parameters and download performance data?
• Are the transmission and axle gearing keeping the engine in the correct RPM range for maximum fuel mileage?
• Are there intake gauges or warning devices available that can alert the driver or maintenance department of an air intake restriction?
• Are there backpressure monitoring devices available to make sure that the diesel particulate filter (DPF) or selective catalytic reduction (SCR) system is not restricting exhaust flow?
• Are the tires and bearings reducing or increasing rolling resistance?
• Is there a cost-effective tire monitoring system available to keep tires at the proper inflation?
• Are there more effective aerodynamic vehicles or option packages available?
• Is there a vehicle package that can significantly reduce the vehicle weight?

While each of these improvements only accounts for a small gain in fuel mileage (one to four percent), the accumulated saving is where big gains in fuel mileage can be seen.

• Specifications to manage fuel economy include cruise control, speed, and air intake.

Cruise control

As a starter, companies should plan to specify cruise control on any new equipment, then program the control just under top-governed speed. Drivers will usually willingly give up two to three miles per hour (mph) in return for the freedom of not having to have their foot on the throttle all the time. It’s almost a sure thing that cruise control will save fuel over what the driver can do manually.

Speed

Fuel economy tests have clearly shown that each 1-mile-per-hour increase above 55 consumes 1/10 gallon more fuel per mile. That means that a rig going 65 mph will get 1 less mile per gallon than the same rig going 55 mph, on average. The faster a vehicle goes, the more horsepower it requires and the more fuel it consumes. This doesn’t even account for variances in terrain or other factors, which is why drivers must be attuned to fuel economy.

During the spec’ing process, carriers will want to consider ordering vehicles that operate at the slowest acceptable speeds, not necessarily the fastest.

Air intake system and restrictions

Another spec for carriers to keep in mind is air intake restriction. Too much can cause up to a four percent drop in fuel economy. For the first 80 percent of its life, the typical air filter gets dirty rather slowly, but once it passes that point, the filter plugs with dirt and other foreign substances more rapidly. As this happens, air intake restriction increases, and the engine works harder to pull in air.

Engine manufacturers say the loss in horsepower equals the percentage loss of fuel economy. According to Donaldson Company engineers, increasing air intake restriction from 5 inches to 25 inches (in water) can result in a 3.4 percent horsepower loss. For example, for a truck that runs 100,000 miles per year and gets 6.5 mpg, that works out to 43.5 gallons of fuel every month.

Exhaust backpressure

Too much exhaust backpressure causes a loss in fuel economy, too. Almost all turbocharged diesels have a maximum allowable backpressure of three inches mercury (Hg). By using a 1.5-inch Hg muffler, there can be as much as a 1.5 percent fuel economy improvement. Before spec’ing all new mufflers, however, a motor carrier must be certain that the replacements meet existing or proposed noise standards.

The diesel particulate filters (DPF) and selective catalytic reduction (SCR) systems that are being placed on vehicles to meet the emissions requirements can increase backpressure if not correctly spec’d and maintained. Many of these systems can be ordered with a “tell-tale” device or diagnostic system that notifies the driver (or maintenance through the onboard data system) that the system is approaching the need for service. It is also important that these systems be monitored and maintained as part of routine preventative maintenance (PM) to avoid excessive backpressure.

Fan and fan clutch

The engine cooling fan places a significant load on the engine when it is engaged. The less it runs and the smoother it engages, the better the fuel mileage. How and when the fan engages is determined by sensors in the cooling system and the fan clutch. When looking at engine fan systems and fan clutches, the employer should consider the affect they will have on fuel mileage.

Electronic engines

With regard to spec’ing for fuel economy, all new vehicles come with electronically controlled engines. However, one key issue to consider is what the vehicle owner is going to be able to do with the electronic engine. Does the manufacturer allow the vehicle owner to reprogram the engine control module (ECM)? Is the owner able to download data retained in the ECM? Does the ECM only communicate with proprietary software or hardware? If so, can the owner have access to the software and/or hardware to reprogram the ECM to improve fuel economy?

Updateable software

If a carrier is using electronic engines (or are going to start using them), another consideration when spec’ing with an eye toward fuel mileage is spec’ing engine control systems that can be updated. Engine manufacturers occasionally update their software, and some of these updates can result in an improvement in fuel mileage. This is a different issue than the “reprogramming” discussed earlier. Updating involves the manufacturer being able to install new operating programs or software into the engine computer, not simply “adjusting the parameters” in the existing software.

• When spec’ing tires, carriers should consider inflation, size, and type.

Tires should not be forgotten when spec’ing equipment. Fleets are increasingly spec’ing radial tires; they stand up better and give more tread life for the money. But one aspect of tires that managers often miss is that bias-ply tires require significantly more horsepower to maintain 55 mph than steel-belt radials. Using more horsepower translates directly into fuel consumption, so all tires should be spec’d closely.

Another fuel mileage problem that can arise with tires is under-inflation. Under-inflated tires can lose 1.5-3 percent of a vehicle’s fuel mileage. Because of the direct effect that tire inflation has on fuel economy (and the operational cost of purchasing and repairing tires), many fleets have gone to, or experimented with, electronic tire pressure monitoring and automatic inflation systems. These after-market options continually monitor tire inflation and notify the driver when tire pressure is low. In the case of the automatic inflation systems, the system will bring the tire back up to pressure after notifying the driver. Regular inflation checks should be provided in any motor carrier’s inspection system.

Tire size and type are also critical decisions. Tire size matters because a vehicle’s overall road speed performance (and therefore the revolutions per minute [RPM] requirements) changes with the diameter and circumference of its tires. If the driveline is not matched to the tire size, the vehicle may be operating at a higher than necessary RPM just to maintain the cruising speed. The reverse is also true. If the tires are too big for the vehicles, the vehicle may be running at too low of an RPM when cruising, which can lead to other problems.

Tread type also impacts fuel economy because a tire’s tread helps determine rolling resistance. For example, a deep lug drive tire will improve traction, but will also lower fuel economy by two to four percent.

With improvements in tread designs, casting designs, rubber compounds, and friction reduction, definite and significant savings can be realized by spec’ing the right tires for a carrier’s equipment.

• Reducing the weight of a vehicle can improve its mileage, but carriers should be sure that any modifications can still support the work a vehicle is meant to do.

Another option to improve fuel mileage is to reduce the weight of the vehicle. There are several spec’ing options that can accomplish this, including:

• Lightweight frame and body materials. When spec’ing the vehicle, carriers should assess the use of lightweight frame and body materials (aluminum, plastic, fiberglass, composite materials, etc.). Most manufacturers offer vehicle models that use lightweight materials to lower the vehicle weight. When considering this option, carriers should consider if the lightweight model vehicle is going to be strong enough to do the job the vehicle is designated for.
• Vehicle size. Another consideration with the frame and body is size. Drivers and fleet managers may want big vehicles (whether it is a bus or a truck), but they need to consider if a smaller vehicle would make more sense. The more the vehicle weighs, the lower the fuel mileage.
• Lightweight axle components. The main axle component that can be lightened up (besides the axles themselves) is the wheel assembly. This can be lightened by using aluminum rims rather than steel, or by switching to a “super single” configuration in place of duals. Super singles have several advantages when it comes to fuel mileage (improved rolling resistance, lighter), but come with the disadvantage that one low tire can stop the vehicle.
• Fuel capacity. The more fuel the vehicle carries, the more weight it is carrying. Excessive amounts of fuel (there are truck-tractors built that can carry 400 gallons of fuel) do nothing other than add unnecessary weight to the vehicle. Correct spec’ing normally calls for the vehicle to carry a maximum of one workday’s worth of fuel.

• The aerodynamics of a vehicle can be modified to optimize fuel economy through changes to the roof, cab, and accessories.

Air resistance is a vehicle’s second greatest impediment to movement, and therefore, optimum fuel economy. Only weight, and the rolling resistance it creates, impacts miles per gallon more. Efficient aerodynamics smooth the flow of air over, under, and around the vehicle. It is not uncommon for some aerodynamic vehicle designs to save carriers as much as four to five cents per mile in fuel savings.

When spec’ing trucks for fuel economy, companies should start with the full-cab roof fairing. It should match the height of the trailers at the company. A proper roof fairing can improve miles per gallon (mpg) performance up to 15 percent when compared to operating without one. Roof fairing considerations include:

• For raised-roof sleeper cabs. Raised-roof sleeper cabs are slightly shorter than a trailer’s roof. Therefore, if a motor carrier has these types of vehicles, they might want to consider adding a small fairing accessory. Without this retrofit, the company may lose from 4-10 percent of the benefits of a full roof fairing.
• For low-height trailers. Installing a full-height roof fairing on a tractor that hauls primarily low-height trailers (flatbed, tanker) would actually add resistance. For this type of operation, a carrier might be better off with flat-roof or mid-roof fairing that better matches their trailer fleet.

There are other aerodynamic/air-deflector options. Most aerodynamic options are equipment packages or after-market add-ons. These include:

• Cab extenders, which are designed to bridge the gap between the truck cab and the trailer. The goal of these extenders is to attempt to reduce the gap to less than 18 inches.
• Side skirts, which cover the fuel tanks and battery box and smooth out the overall profile of the truck.
• Air dam front bumpers and aerodynamic hoods which are designed to ease air flow around the front of the vehicle.
• Aerodynamic accessories (or aerodynamic location of accessories), such as mirrors, air intakes, air horns, and grab handles. Note: Two manufacturers have been granted exemptions that allow the use of small external cameras and internal screens mounted on the left and right windshield posts in the place of mirrors to improve fuel mileage.
• Trailer air deflectors including nose and rear “bubbles,” side skirts, and axle air deflectors. Any of these options can increase fuel economy by 1-3 percent.

• Motor carriers should be sure drivers are operating vehicles at slower than their optimum speed to prevent wear and tear.

Gear ratios in the transmission and rear axle(s) determine how fast the engine spins (in revolutions per mile [RPM]) at any given road speed. When spec’ing for fuel economy, each must be selected with the other in mind. The best way to use gearing for fuel economy is to “gear fast/run slow.”

Motor carriers should spec their vehicles so that they could run fast but set the vehicle software to cruise at a slower speed than they are capable of. This lower cruising speed will also mean a lower cruising RPM. The lower the engine RPM during cruising, the less fuel consumed.

Vehicle owners should be careful to not overdo it. The goal is to make sure that the engine is operating at the lower end of its power band when cruising, rather than the upper end. If the vehicle is geared too fast, the engine will be below its power band when cruising, which can create wear and performance problems (the driver or the vehicle must do a lot of downshifting to maintain speed/power during normal driving).

Most trucks, tractors, and large buses are geared for a top speed of 75-80 miles per hour (mph) at 1800 to 2100 RPMs. With this engine/gear package, they cruise efficiently at 65 mph with the engine operating at between 1300-1500 RPM (when equipped with engines with a power band of 1200 RPMs to 1800 RPMs). At this operating range the vehicle uses the least amount of fuel possible.

• Routine maintenance ensures vehicle specs are still optimizing fuel mileage.

One key area to focus on when looking to improve fuel mileage is inspection and maintenance. Spec’ing and maintaining go hand in hand. Specific inspection and maintenance items on the vehicles that can have a direct effect on fuel mileage are (these items are also considered when spec’ing vehicles):

• Tire type, inflation, and condition;
• Bearing condition;
• Brakes and brake system operation;
• Fuel system protection and integrity;
• Engine oil type, level, and condition; and
• Engine performance.

Managers should be sure the vehicles are receiving their scheduled maintenance and drivers are performing their daily inspections. Something as simple as an under-inflated tire or a dirty air filter can lower the vehicle’s fuel mileage.

Driver inspections are critical. If the drivers are not spotting under-inflated tires, bad bearings, dragging brakes, fuel leaks, and oil problems, the vehicle may be losing fuel mileage until it comes in for scheduled maintenance. To avoid this, carriers must:

• Ensure drivers are trained in inspections, and
• Have a program in place that verifies drivers are doing their inspections.

The maintenance department must listen to drivers about potential performance problems that may be reducing fuel mileage. If a driver complains of a drop in fuel mileage, or any other performance problem, the maintenance department should do a detailed inspection of the vehicle to determine the problem. If the problem becomes common, the maintenance department might consider adjusting the specs on future vehicles.

Equipment replacement

Fuel consumption records should be one set of information used in making the decision to repair or replace a fleet vehicle. Weighing a 4.5 miles per gallon (mpg) figure for an older vehicle against a 6.5 mpg for a new one is a variable in the replace/repair equation that should be considered.

• Improving fuel mileage from a personnel standpoint begins with effective driver training.
• Drivers must be trained on shifting, speed, idling, and fueling for the most effective outcome.

Driver habits and performance can be one of the largest factors in fuel mileage, influencing fuel mileage as much as a mile per gallon. Training must impart correct driving techniques to the drivers and emphasize the importance of using them, including:

• Progressive shifting,
• Low revolutions per minute (RPM) driving,
• Operating at a slightly slower speed,
• Maintaining steady speeds, and
• Idle reduction.

Progressive shifting and low RPM driving

Training drivers on progressive shifting and low RPM driving is typically a safety/training department function. However, by downloading engine data at the time of service, the maintenance manager may become involved in the process. High RPM spikes and high average RPMs are typical of a driver not using progressive shifting or constantly operating at high RPMs.

Typically, these drivers believe that to get the engine to perform correctly the engine must be kept at high RPMs, and that maintaining high RPMs will reduce the number of shifts that are necessary. Both of these points are false. As a maintenance manager knows, it’s actually torque, not high RPMs, that makes an engine perform well. Keeping the vehicle at high RPMs keeps it above the peak performance areas. Also, if the driver is downshifting at high RPMs, the driver is never giving the engine a chance to pull (downshifting before even getting into the engine’s peak torque range).

Finally, there are software programs that can be installed on engine computers that limit the RPMs at various road speeds. These programs force drivers into using progressive shifting. This should be considered if the majority of the fleet has a problem with not using progressive shifting.

Slower speeds

Some drivers might believe that a vehicle can be equipped to operate efficiently at any speed if the driveline is correctly configured. These drivers must understand that speed equals air resistance. No matter how efficient the driveline is, air resistance cannot be avoided. Fuel mileage drops as much as 5 to 8 percent for every 5 miles per hour over 55 miles per hour (depending on vehicle configuration), no matter how well it is geared. Graphing the air resistance can many times demonstrate the issue to the drivers.

Here again, the people who train drivers are normally in the safety or training group. However, the maintenance manager can lend the training person expertise and facts in this area.

By reducing the speed at which the vehicles are operating, the company can realize a considerable fuel mileage improvement. This will normally generate a considerable push-back from the drivers (and possibly increase driver turnover), as reducing the speed at which the vehicles operate will reduce their income.

As well as limiting speed, the power of the engine can also be adjusted in many cases. Be aware, reducing the power the engine can generate may have the same effect on driver performance as reducing the vehicle speed, and may cause the same problems.

Maintaining steady speeds

A maintenance manager can notice certain driving behaviors when downloading the vehicle computers, and when performing maintenance, that indicate a driver is not maintaining steady speeds. Common indications are a high number of hard-brake incidents on the vehicle computer and excessive brake wear on the vehicle.

What is typically causing this (high number of hard braking incidents and excessive brake wear) is the driver having to make radical speed changes due to not finding a good cruising speed and “running with traffic.” This driving habit causes a reduction in fuel mileage, while also being potentially dangerous. A carrier’s maintenance manager may not be directly training drivers on good defensive driving techniques, but the information generated by a maintenance department can be critical to the people that do.

• Canadian provinces have unique regulations regarding speed limits.

Speed limiters are the law in the provinces of Ontario and Quebec, Canada. The intent is to reduce pollution, increase fuel mileage, and improve highway safety.

All large trucks operating in the provinces of Ontario and Quebec must have their speed limited to no more than 105 kilometers per hour (km/h), or 65.2 miles per hour (mph). The present provincial speed limit for large trucks on major highways in these provinces is 100 km/h, or about 62 mph.

The carrier operating the vehicle will be responsible for compliance with the law. Carriers that have the technical know-how and correct equipment (hardware and software) should be able to do the programming themselves. If the carrier does not have the know-how or equipment, the programming will need to be done at a dealer or repair facility that has the correct capabilities.

As much as is practical, the speed limiter will need to be tamperproof. Once it is set at the appropriate speed, the driver is not to have the ability to alter it. Proof of not having an operating speed limiter will be a speed citation exceeding 105 km/h. In theory, a speeding violation in excess of 105 km/h could result in two citations — one citation issued to the driver for speeding, and another citation issued to the carrier for not having an operating speed limiter on the truck.

Here is a key point: This law applies to every truck over 11,000 kilograms (roughly 24,250 pounds) operating in Ontario and Quebec, regardless of where the vehicle is registered. Trucks entering Ontario and Quebec from other provinces or the United States will be required to comply with this law.

In the United States, several major trucking associations and motor carriers, and several safety organizations have petitioned the United States Department of Transportation to consider similar regulations. The rulemaking to institute a speed-limiter rule in the U.S. was started but has not advanced.

• Maintenance managers might consider various ways to decrease a driver’s idling time.

Idle reduction can be accomplished through various programs. The maintenance manager will need to be actively involved in the programs. As an example, if the carrier decides to implement a driver fuel bonus program, the implementation will need to include initiating the use of hardware to track the actual percentage of idle.

• Idle reduction hardware systems can control the temperature inside the cab without using extra fuel.
• Software systems reduce idling with mechanism to shut-off the engine after a certain amount of time.

Hardware

The next method would be idle reduction hardware, such as an auxiliary power unit (APU) to heat and/or cool the cab without running the main engine. The diesel-powered APUs that are presently available can heat or cool the vehicle for a complete driver rest cycle using less than one-half of a gallon of fuel (as compared to three-fourths to one gallon of fuel per hour of idling in heavy-duty vehicles).

Idle reduction hardware that can be installed on the vehicles includes:

• Phase charging systems that can cool the vehicle for up to eight hours without running the vehicle engine,
• “Shore line” systems that use 120-volt power from an outside source to heat and/or cool the cab while the vehicle is parked,
• Generators (gensets) that provide 120-volt or 12-volt power to the cab to operate heating and cooling systems,
• Heating and cooling “tubes” that connect to the cab,
• 12-volt heating and/or cooling systems that use extra battery packs, and
• Diesel cab heaters.

Several of these hardware systems use no fuel. Of course, there is the initial cost of the idle reduction equipment and the cost of installation, but this can be offset by the fuel savings, federal tax breaks, and other program involvement. One such program is the Environmental Protection Agency’s (EPA) “Smartway Transportation Partnership” program. This program provides low interest loans and grants to carriers who are willing to reduce emissions through the reduction of fuel usage.

There are also potential problems with heat generation, driver acceptance, and equipment compatibility that need to be addressed with these hardware systems. As with any other cost reduction plan, the carrier will need to study the costs and benefits of installing the idle reduction hardware.

Software

Installation of idle reduction software is another high-tech solution to idling. The fuel management computer on most modern medium- and heavy-duty vehicles can be programmed to shut down the main engine after a predetermined number of minutes of idling. There are software systems (some requiring hardware upgrades) that will automatically shut down and start up the main engine to warm or cool the cab of a sleeper truck based on the driver’s desired cab temperature. This allows for fuel savings by not running the engine when the driver does not need heat or air conditioning.

The starting point for any of these initiatives is the development and strict enforcement of a no-idle policy (if not sleeping in the cab, the truck is not to be running). To verify compliance with such a policy, the carrier may need to use (or install) onboard hardware and/or software to track driver performance. Typically, the maintenance manager becomes involved in these programs due to the increase in vehicle maintenance or improvements that are required. Also, vehicle maintenance checklists may need to be modified to include routine downloads of onboard computers.

The key is to equip the vehicle and motivate the driver to reduce idle; one cannot be done without the other. Simply telling drivers to reduce idle may not lead to any reduction if the drivers are already at the minimum, but providing the vehicle with hardware or software may assist the driver in lowering the idle time.

• A fuel bonus program incentivizes drivers to improve their performance by offering them a portion of the money saved by the carrier with the program.

Implementing a fuel bonus is another strategy used to improve driver performance. Many drivers respond well to simple monetary bonus programs. A fuel bonus is such a program. Fuel bonuses can be used to motivate drivers to reduce idle time, keep their speed down, and improve their shifting.

The downsides to a fuel bonus program are the cost of administering the program, lack of fairness when comparing vehicles and run areas, and driver frustration.

As with any bonus program, the company will need to set the bonus levels carefully. Performing a study to determine how much money improved fuel mileage can save is the first step in establishing a bonus. If the program cannot generate enough savings to cover the direct costs and administrative costs of running the program, it should not be undertaken.

The lack of fairness (or perceived lack of fairness) is caused by several factors. Drivers that are assigned older, less efficient vehicles or operate on routes that require the vehicle to work harder, will have to make more sacrifices to make the bonus.

Setting the bonus levels low enough that they are achievable by all vehicles is one method to overcome this, although it is not preferred. Drivers with more efficient vehicles will not have to work to improve their fuel mileage, thereby reducing the overall effectiveness of the program. Establishing “brackets” for the different equipment is a fairer and more effective method. Example: Drivers with 2000 to 2003 vehicles must get 6.5 miles per gallon to qualify, while drivers with 2004 to 2006 vehicles must get 6.75 miles per gallon to qualify. If a carrier is maintaining accurate records of vehicle performance based on vehicle groups, determining the appropriate level for each group is possible.

Driver frustration with a fuel bonus program can be caused by drivers believing the goals are unattainable. Another potential source for frustration occurs when drivers’ maintenance or operational requests are not met, leading the drivers to believe the company contributed to the loss of the bonus.

If operating with a fuel bonus, the maintenance manager (and the maintenance department in general) will need to be extra sensitive to driver write-ups and complaints. They will need to be prepared to be challenged if the driver reported problems, but the problems were not resolved, and the driver believes that the unresolved vehicle problems cost the bonus.

Preventative maintenance (PM) will also need to be done on time, every time. This will keep drivers from being able to claim that they did not make the fuel bonus because of a lack of maintenance.

Fuel management also involves taking steps to manage the cost of fuel. There are several strategies a company can use, including having a fuel network, hedging, and other cost-control techniques.

• Fleet managers establish fuel networks to make sure their drivers are getting the best possible price for fuel.

Fuel networks are agreements with fuel stops, fuel chains, or fuel suppliers that allow the carrier to negotiate the best possible price for fuel at all times. Many fuel networks involve the carrier paying cost for the fuel, as established by contract, plus a fee (cost-plus programs). Another way these programs are structured is based on a “discount” off the pump price. Both programs can be straightforward, based on a specified fee or discount in cents per gallon or percentage, or they can be more complex, adjusting the fuel pricing to the number of gallons purchased. There are several ways fuel networks can be established.

• Exclusive network agreement. Under this arrangement the carrier attempts to leverage the maximum negotiating power available to them by negotiating to purchase all fuel from one supplier. The supplier, in exchange for the guaranteed business, will provide the carrier with a reduced price on the fuel through either a cost-plus program or a discount. Many fuel companies offer nationwide fuel networks, which includes the use of their fuel credit card.
• Company network. A company network is built by studying the movements of the fleet, locating fueling locations that would best serve the fleet, and then negotiating directly with fuel stops in those locations. To be most successful at this, the carrier will need to project the fuel purchases (in gallons and frequency) the carrier will be making at each fuel stop.
• Off-network fueling. The fleet manager will need to consider having a tracking mechanism in place to identify problems with the network. Problems can include not having a fuel stop in a needed location and drivers not using the existing stops.

Fuel stops that are too far apart will lead to drivers not using the fuel network to its best capacity. If the driver needs to fuel off-network because stops are too far apart, the driver will generally fill up, rather than get just enough fuel to make it to a network fuel stop. This is because drivers do not like to stop for fuel any more often than is necessary. Fuel stops cost time, and in most circumstances the driver must log on-duty time for the fueling. To avoid this, provide fuel stops that are within range of each other based on the fuel capacity and fuel mileage of the company vehicles.

The opposite can also be true. If fuel stops are located too close together, the fleet’s purchasing power will be diluted. This can lead to the loss of the discounts the network was intended to realize. If the distributor or retailer feels the network is not helping their fuel stops, they may reduce the discount or drop the discount program completely.

• At times, drivers might refuse to comply with established fuel networks, which costs the carrier money in the long run.

While most drivers will be compliant with the company fuel network, some drivers will not. These drivers simply will not comply with the company fuel network and fuel at fuel stops of their choosing. This is due to drivers having “favorite” truckstops, not “liking” the facilities at the company fuel stops, and/or trying to avoid fueling to be able to “manipulate” their hours of service. Non-compliance should be considered a driver performance issue and treated as a serious matter. Non-compliance drives up fuel costs, and if not corrected can lead to other drivers becoming non-compliant.

Drivers who are manipulating their hours of service can be the most difficult to bring into compliance with the company network. However, if drivers are using electronic logs, the carrier’s ability to detect this falsification has become easier. Drivers should know that the accuracy of their on-duty (not driving) time is verified using supporting documents, and that fuel receipts and fuel billing statements are the most common support documents used in auditing (everybody has to buy fuel!).

The log manipulation technique used by drivers on paper logs, is to fuel “wherever the day legally ends.” By doing this, the driver can continue to drive after using all available hours without leaving a “paper trail.” This allows the driver to get home, or make it to a customer, when their available hours have been used. If they had fueled at the company fuel stop, the driver would have had to have accounted for a fueling when taking a required break hours earlier.

The problem is, if the driver is caught, there are serious consequences (fines against the driver and an out-of-service violation on the carrier’s record, which can lead to the attention of auditors). If the driver is involved in an accident while operating over hours, the ensuing litigation can be disastrous for the driver and the carrier.

• Bulk buying allows carriers to purchase fuel at one day’s price, but have it delivered later.

Fuel hedging is advance purchases of fuel via bulk buying or entering into contracts for fuel at a fixed price for future delivery. This is done to protect against the shock of anticipated increases in price. While extremely popular at one time, the use of hedging has decreased.

While not actually hedging, bulk buying is a similar concept. If the carrier has the storage capacity on site, the carrier can bulk buy and have the fuel delivered when the price is expected to rise. The carrier would then attempt to avoid purchasing fuel by using the cheaply purchased fuel until the price moderates.

Bulk buying can be done in several ways. First, the carrier can purchase the fuel and take delivery of it. Second, the carrier can purchase the fuel from a distributor, and have it stored at a storage location for a fee. From there, it can be delivered to specified locations as the carrier needs it.

When doing actual hedging, the carrier purchases “virtual fuel” or “paper fuel” at the day’s price. The distributor does not store the carrier’s actual fuel. When the carrier requests delivery, the fuel is taken out of the distributor’s existing stock and delivered to the specified locations at the agreed upon price.

The first option is most appropriate to carriers that have their own fueling facilities and the majority of the vehicles fuel at them. The final option may be attractive to fleets that operate over a wide area or do not have their own fueling facilities.

What differentiates hedging from bulk buying is with hedging, the carrier enters into a contract to have fuel delivered at a later date at an agreed-upon price. In bulk buying, the carrier takes delivery of the fuel at the market price the day of delivery.

• Mobile fuel vendors bring the fuel directly to the fleet when it’s not in use, so drivers don’t have to fuel themselves.

There is very little that a fleet manager can do to affect the price of fuel; however, there are steps to take to control the cost of fuel and improve the company’s bottom line. If this seems like a poor attempt to put another spin on the reality of the trucking industry, consider the following as a means to control the cost of rising fuel prices.

There are only so many ways to purchase fuel. There are fuel cards, which save so many cents per gallon at each fueling stop. A carrier could implement a program with nationwide truck stops to purchase their fuel at a lower price. Drivers could simply pay retail and keep going without spending the time to look for the best price on the road. A carrier can purchase their fleet’s fuel in bulk if they have an underground storage tank at their terminal(s). Or, the carrier can have a mobile fuel vendor fuel its fleet when its trucks are idle. This option won’t be too costly if the carrier can negotiate the right price.

A driver will spend a minimum of 20 minutes each time they stop for fuel. If they fuel 5 times per week, that accounts for at least 1 hour and 40 minutes per week that both the driver and the truck are unproductive. Multiply the driver’s time to fuel by the hourly wage and then add in the cost of the fleet’s truck for the same time it was unproductive, and suddenly, the pennies saved per gallon turn into the dollars lost in fueling — especially when multiplied by the number of drivers fueling each day.

A fuel vendor, who will come to a facility and fuel each night (or whenever the fleet is not in use), could lower a carrier’s costs even if the price of fuel increases — providing the carrier negotiated a fair price based on the vendor’s daily cost. This will require a strict recordkeeping system and a daily watch on the true price of fuel so that costs can be managed wisely.

• Fuel surcharge mechanisms fluctuate with the cost of fuel.

Surcharges are extra fees added onto the original fee for a product or service. Fuel surcharges are agreed upon increases (extra fees) in the shipping rate brought about by increases in fuel costs. Typically, the carrier and the shipper will agree on a “standard” rate based on an agreed-upon fuel price, to be adjusted through a fuel surcharge based on increases or decreases in the national average price of fuel as reported by the Department of Energy (DOE).

Surcharges are established in either the carrier’s tariff rate sheet or customer contracts. There are no legal requirements stating that a customer must agree to pay a carrier’s fuel surcharges. Basically, fuel surcharging is a negotiated issue between participants in an agreement or contract, not a legal issue. If a carrier chooses to implement a non-agreed upon or declared fuel surcharge, and the customer refuses to pay it, the carrier has no recourse.

The typical arrangement for fuel surcharging is the establishment of a “base price” for fuel. This base price is what most carriers base their declared rates and contracts on during negotiations. The fuel price used for the purpose of determining the base price and fuel surcharging is normally the DOE Energy Information Administration’s weekly gasoline and diesel retail pricing report at the time the rate negotiations were going on.

The surcharge mechanism in tariffs and contracts normally activates once fuel rises more than an agreed upon cents per gallon above the base price used to negotiate the rate. The surcharge mechanism will then automatically increase the rate a specified percentage or cents per mile (depending on the contract structure). Typical increases in the shipping rate are one to two percent for every five to six cent increase in fuel prices.

Under the surcharge mechanism in use by most carriers, if fuel prices come down, so does the fuel surcharge. If the fuel prices remain high or fall below the base fuel price used to negotiate the fuel surcharge, the carrier and customer may negotiate a new base rate and surcharging schedule, reflecting the new fuel costs.

Because of the reduction function in fuel surcharging, many customers have become more willing to negotiate fuel surcharges than rate increases. Customers can see rate increases as more difficult to lower if fuel prices decline. On the other hand, customers see fuel surcharges as a way of bringing their total shipping rates in line with the fuel prices, particularly when fuel prices decline.

• Carriers must notify customers of the reason for a fuel surcharge and when it will be effective.

Implementing a fuel surcharge is actually quite simple. The first and most important step is notifying customers about the intent to charge a fuel surcharge. This notification should include an explanation as to why the change is being implemented and when it will take place. This should be done in a letter, which could read as follows:

Dear Customer,

As I’m sure you are aware, fuel prices continue to spiral out of control to historical levels. We have avoided seeking price relief in this area as long as we can. However, due to the critical nature of the current situation, we can no longer continue to absorb this increasing cost.

Therefore, effective (insert date), we must implement a temporary fuel surcharge on all shipments. The fuel surcharge will remain independent of our base rates and will be shown as a separate entry on our freight bill. The fuel surcharge amount will be charged on a per-mile basis, reflecting the extra cost of the fuel used for each specific trip. The rate will be calculated at the beginning of business each Monday morning for all trips originating from that Monday until the next calculation is done the following Monday.

We deeply appreciate your understanding in helping to share these fuel cost increases so that we can continue to provide the excellent service you need and desire. Working together in this way will help keep our nation strong during this time of crises. We hope that by sharing this burden together, we can keep the goods and services that power the American economy moving.

Respectfully,

(Your Company)

Below is a sample chart to give an idea of a fuel surcharge structure. The base or starting cost per gallon and the ending cost per gallon can be as modified as needed to cover the expected range of fuel prices over a long period of time. A typical surcharge schedule may run from $1.50 per gallon to $5.50 per gallon based on historical prices.