Every fleet manager knows that close behind the cost of funding vehicles, fuel spend is one of the largest costs in their annual fleet budget. With continuing instability in the middle east, growing demand from the emerging economies and a softening pound, the steady increase in the price of petrol and diesel seen over the past decade looks set to continue ever upwards.
An average individual fleet vehicle in the UK, covering 12,000 miles at 45mpg, with diesel costing £1.35 per litre represents an annual spend of £1639 on fuel, around 20% of the cost of owning and operating the vehicle.
Highlighting the issue, Simon West-Oliver, says: ‘The cost of fuel is obviously a huge issue for fleets and it is one that is just growing and growing. In 1993, fuel was costing fleets cost around 50p per litre, that had increased to around 75p by 2003 and is now £1.35. Ignoring any short term spikes, that same long term trend means fleets will be paying more than £2 per litre for their fuel within the next decade.’
West-Oliver continues: ‘Thankfully the vehicle manufacturers have responded by making more fuel efficient vehicles. Today a mass market fleet vehicle is around 40% more fuel efficient than it’s equivalent 20 years ago, the trouble is, fuel is 170% more expensive now than it was 20 years ago and it is that growing gap which means fleets are more exposed than ever to inefficiency and abuse.’
Explaining what needs to be done, West-Oliver says: ‘Fleets need to be able to actively manage their fuel use but the leasing and vehicle management industry seems to think that by offering fleets a one size fits all fuel card they are addressing the problem. Fuel cards are obviously a powerful tool, and one we highly recommend, but the reality is the fuel card is not a suitable solution for every fleet. Fleets of all sizes need to be able to combine data from a range of sources in order to measure and manage fuel use.’
While it is not practical for individual fleet operators to devise systems that to cross reference the fuel consumption by individual vehicle to identify poor performance, faulty vehicles or driver misuse, the systems in place at leasing and vehicle management companies should be more than capable of supporting clients in this respect.
West-Oliver concludes by saying: ‘Leasing and fleet management companies can do much more to support fleet operators than they are currently doing. DRIVE’s e.Modules provides an easily deployed environment designed for users external to the business. This gives customers the ability to maintain their own data, perform their own searches and produce their own reports. For the leasing company it gives the compelling advantages of customer retention and “buy in” combined with reduced administration costs. The web modules are designed such that the look and feel can be easily customised and controlled so each customer to has their own corporate appearance at log-in.’