When times are tough, look at fuel mileage
To prepare for tough times, it’s wise to look at the company’s highest operating expenses. According to the American Transportation Research Institute (ATRI), the top three expenses at a typical motor carrier in 2022 were:
- Driver wages (32 percent of all costs),
- Fuel (28 percent), and
- Truck and trailer payments (14 percent).
These three lines in a motor carrier’s budget account for 74 percent of all costs, but because of the negative long-term consequences (loss of drivers, higher maintenance costs, etc.) carriers normally do not want to cut wages and delay truck purchases. This leaves improving fuel mileage as the best way to control costs, and thereby harden the company for tough times.
Fuel cost and fuel mileage
To understand the possible results of a serious effort in this area, consider the following:
- A truck that gets 6.25 miles per gallon (mpg) will burn 16,000 gallons of fuel over 100,000 miles.
- A truck that gets 6.75 mpg will burn 14,815 gallons of fuel over 100,000 miles.
- This is a difference of 1,185 gallons for every 100,000 miles.
- With an average cost of $4.20 per gallon for diesel fuel (the average cost from January 2023 to October 2023 per the Energy Information Administration), that means an operating cost difference of $4,977 if fuel mileage is improved by 0.5 mpg.
- For 10 trucks, that means a fleetwide cost reduction of $49,770 for every 100,000 miles the fleet rolls.
Remember, this is assuming a 0.5 mpg improvement. Increasing fuel mileage by 1 mpg, would double the cost reduction.
Improving fuel mileage
So how can fuel mileage be improved? Some activities are easy, and others require a serious commitment by both the company and drivers. Here are common methods used to increase fuel mileage:
- Reduce idle time. This can be done by:
- Training drivers to turn the vehicle off whenever it is parked,
- Using the vehicle’s engine control module (ECM) to track idle time to verify the driver is not leaving the vehicle idling unnecessarily,
- Enabling the idle shutdown option in the vehicle’s ECM,
- Equipping trucks with idle reduction technologies that heat or cool sleeper cabs, and
- Paying a bonus based on seasonally adjusted idle time.
- Reduce speed. There is an argument over how much reducing speed increases fuel mileage. However, the argument is over how much it increases fuel mileage, not whether it saves fuel or not. Using a speed limiter or a smart limiter on vehicles can improve fuel mileage.
- Train drivers to keep speeds down, shift progressively, and accelerate and decelerate smoothly in traffic. Part of this is training on defensive driving. Drivers that maintain a safe speed for the traffic and road conditions and use proper space management can accelerate and decelerate smoothly in traffic.
- Pay a fuel mileage bonus that shares the cost savings with the drivers.
- Buy equipment with fuel mileage in mind. When spec’ing equipment, consider:
- Power to weight when selecting an engine,
- The ideal engine operating RPMs when selecting a transmission and rear axle(s),
- Tractor and trailer aerodynamics,
- Low-rolling resistance tires, and
- Other options that can directly affect fuel mileage.
If possible, consider adding these options to an existing fleet over time. As an example, when it comes time to replace tires, look for the tires that offer the best fuel mileage.
Key to remember: Fuel is the second largest expense for a motor carrier. Efforts to improve fuel mileage will pay dividends on the bottom line, which helps when times get hard.