For public fleets, having a modernized fuel system can pay big dividends in terms of cost control and emergency response readiness.
If it were up to fleet managers, every public fleet would have its own fully modernized fuel system. The benefits in terms of tracking consumption, reconciling mileage and fuel use, preventing fuel theft, and controlling costs are immediately apparent to those who manage fleets on a day-to-day basis.
However, due to the upfront cost, many public agencies resist acquiring a dedicated fuel system or updating and modernizing their existing systems.
While this is understandable, it can end up costing these agencies significantly in the long run — often in ways that are not immediately apparent. In this blog we’ll talk about why having a modernized fuel system can be a major asset to public agencies, the risks of not acquiring or modernizing your fuel system, and how you can mitigate some of the burden of upfront cost.
Why You Should Have a Fuel System
First off, why do public fleets need a dedicated fuel system?
The main reason is cost control. If your agency has no fuel system of its own, retail price fluctuations can wreak havoc on your budget. With your own fuel system, you can often negotiate a purchase price that serves as a hedge against price volatility.
Emergency readiness can also be a concern. Natural disasters and other widespread emergencies occasionally have the potential to cause a temporary fuel shortage (or a sudden spike in demand due to fears of a shortage), which can mean long lines at fuel retailers. Without a dedicated fuel system, emergency response vehicles can end up stuck in these lines, as was the case in areas of Texas in the wake of Hurricane Harvey.
What is a Modernized Fuel System?
A modernized fuel system uses technology to enhance security and usage tracking. Depending on your system’s level of sophistication, it can provide assurance that only authorized users are pumping fuel, protect against fuel misuse or theft, and/or ensure that proper odometer readings are entered at the time of fueling.
A very basic system may involve a simple driver ID card (or key fob) that is scanned at the dispenser. This type of system provides some level of deterrence against unauthorized use. However, it does nothing to prevent inaccurate odometer entries, and it leaves open the possibility of one driver scanning his or her card and then filling up multiple vehicles. Each of these scenarios has real consequences for tracking vehicle performance and managing maintenance cycles, which can significantly affect fleet operation costs.
At the other end of the spectrum, an advanced fleet fuel management system may include a diagnostic tool that hooks up directly to the vehicle’s OBD-II port. This allows the system to identify the vehicle being fueled as well as automatically download the odometer reading, any active trouble codes, and other operating information like idling time, max speeds, engine time, and so forth.
This information can be highly useful for managing maintenance cycles and tracking fuel efficiency. For larger fleets especially, it also aids in monitoring driver behavior, which can have a significant impact on cost-saving metrics like fuel conservation and maximizing engine life.
The more sophisticated a system gets, the more it will cost — but the more potential benefits it can provide as well. The key is finding the right balance that meets your needs but remains within an acceptable budget range.
How a Modernized Fuel System Helps Control Costs
Let’s take a closer look at some of the ways that an automated fuel management system can help you better predict and control operational costs.
Fuel Theft Deterrence
Fuel theft deterrence, unfortunately, is more common than many fleet managers and public agencies realize. And often times the only way to find out is to install tracking and security technology in your fuel system. Experienced fleet managers will tell you that the discrepancy on the books between gallons of fuel bought and gallons of fuel dispensed can vary widely depending on the sophistication and tracking abilities of your fuel management system.
A modernized system can prevent and deter theft through multiple avenues, including vehicle/driver identification, automatic monitoring of system tank levels, and on-demand or automated exception reports that can highlight anomalies in usage.
Optimizing Preventative Maintenance Cycle
Accurately recording both fuel consumption and odometer readings on individual vehicles is critical for managing your fleet’s preventative maintenance (PM) cycle. Chronic issues with the PM cycle (both in terms of over- and under-maintenance) can have a significant impact on fleet operating costs via lower fuel efficiency, wasted labor, and more costly repairs that could have been prevented.
Automatic System Monitoring
Some automated fuel management systems have the ability to integrate with your automatic tank gauge, allowing you to monitor fuel levels virtually in real time. This allows you to reconcile fuel delivery with your bill of lading. Integrating with your automatic tank gauge also allows you to compare meter readings against the amount of fuel that was actually dispensed at any given time, ensuring accurate accounting.
Accurate Billing of Other Departments/Agencies
Does your agency or department sell fuel to other agencies or departments? If so, an automated system makes accounting and billing much easier and can improve accuracy.
Freeing Up Staff Time
Manually reconciling fuel records and odometer readings can be extremely time intensive, especially if odometer readings are entered manually — or worse yet, tracked by hand via the “clipboard” method. Often times, simply freeing up the hours that previously were spent on reconciliation can go a long way toward justifying the cost of automation.
How to Mitigate the Upfront Cost of a Modernized Fuel System
Hopefully, by now you can see the potential for an automated fuel management system to more than pay for itself over the long term. There are also ways to ease the burden of upfront cost related to modernizing your system.
The first step, of course, is determining which features you actually need. You can start by considering factors like your fleet size, the number of users who regularly access the system, any challenges or special needs based on geography or location, etc.
It can also make sense to phase in your improvements over time. For instance, adding a requirement for all new vehicles to have a fuel management system installed at time of purchase can help set you on the road toward a fully automated system in the not-too-distant future.
Considering all of the above benefits, the year-by-year cost of gradually upgrading will be easy to justify for many public agencies.