Did you know that fuel costs represent one-third of the expenses associated with running a fleet? Although other expenses for vehicle acquisition and employee compensation remain on the higher side, they can’t be cut down.
But the fuel expenses can be substantially reduced. And the good news is that it doesn’t take much time or effort to do so. You just need proper knowledge of IFTA and adopt some fuel management techniques to start with, let’s take a look at both.
IFTA
IFTA reporting is one of the most overlooked procedures in the fleet business. Now, if you’re wondering what is IFTA?, it is the acronym for International Fuel Tax Agreement.
And what does it do? It is an agreement that simplifies the reporting process of your fleet vehicles’ fuel consumption. Here’s how:
Your fleet vehicles will probably be making multiple inter-state trips. This means a vehicle can fill 200 miles worth of fuel in Texas and use the very fuel to drive 100 miles in Louisiana. Before the year of 1996, such trips meant you had to file a fuel tax report for multiple states.
But thanks to IFTA, an agreement between the lower 48 states of the US and the Canadian Provinces, a single fuel tax form would do the trick. But that’s easier said than done. You’d still have to keep track of miles traveled by the vehicle, fuel use, and other metrics.
Fortunately, this process can be streamlined with the help of telematics. But before that, you will have to apply for an IFTA license. For that, there are several prerequisites, such as being an established business, presentable fleet records, and you must function in at least one other IFTA jurisdiction.
With an IFTA license in place, you can significantly reduce the fuel tax associated with your fleet vehicles. But as previously mentioned, you need to be accurate with recording the miles driven and fuel purchased in each state for precise IFTA reporting.
If you rely on paper records for IFTA reporting, it will be tedious and can be prone to human error. To organize the entire process, and make it error-free, your company could utilize the potentialities of telematics.
There are several telematics providers in the industry, such as Samsara, who can help you track the miles covered by your fleet vehicle for an accurate IFTA reporting, along with many other features for effective fleet management.
Fuel Management Tips
Along with the effective IFTA reporting process of your fleet vehicles, you can adopt several fuel management techniques to save your company money. Here are some of them.
- Plan and Optimize Routes Ahead
Poorly planned routes will increase the fuel costs and unwantedly consume a driver’s time. As a best practice, plan routes ahead, taking into account the road conditions, climatic conditions, and any inconveniences a driver may encounter.
Ensure you equip the fleet vehicles with the latest maps and update them with precise customer locations. Although most of the “troubles” a driver may encounter can be overseen, events like slow traffic caused by accidents can only be monitored in real-time with the help of telematics.
- Educate Your Fleet Drivers
Educating your fleet drivers and training them to adopt good driving habits can notably reduce your fleet’s fuel consumption. By staying away from aggressive driving behaviors, avoiding distracted driving, and sticking within the speed limits, you can reduce fuel wastage, as well as vehicle maintenance costs.
You can also instruct the drivers to avoid vehicle idling as much as possible. Increased idling times can dramatically increase fuel consumption and result in higher CO2 emissions. Instruct drivers to turn off the engines if they feel the vehicle will be halted for more than a minute.
Another technique to save fuel consumption is by practicing coasting – a method that requires the drivers to release the gas pedal to slow down the vehicle naturally.
To take it one step further, reward the drivers for healthy driving habits. This will influence many to stick within the speed limits and away from aggressive driving.
- Monitor Fleet Driver Behavior
Judging a driver’s road behavior can be hard, as they often ride solo. To reduce maintenance and fuel costs, monitoring the driving behavior is crucial, and it can be performed with the help of telematics.
Driver behaviors such as hard braking, irregular gear changes, and, most importantly, speeding take a heavy toll on the vehicle’s fuel consumption. It can also worsen the performance of the vehicle due to frequent wear and tears.
Using telematics is another way to create responsible drivers, as the very thought of being monitored may force them to refrain from aggressive driving behavior. By continually monitoring the drivers, you can pinpoint and train the drivers who need further assistance.
- Check Your Fleet Vehicles’ Tire Pressure, Regularly
It is common knowledge that a vehicle’s tire pressure significantly affects its performance, and ultimately its fuel consumption. Instruct your drivers to check the tire pressure before each trip. Tires that are worn out or haven’t been sufficiently inflated can increase a vehicle’s fuel consumption.
- Perform Regular Maintenance
One of the most notable factors determining how well your vehicles are capable of reducing fuel consumption is its condition. If properly maintained, vehicles will have a longer lifespan and will consume less fuel.
To be precise, poorly managed vehicles are prone to waste fuel than those adequately cared for. Make it a habit to check up the vehicle’s condition regularly, and most suitably in every month.
If you manage a large number of vehicles, monitoring the performance and keeping tabs on each vehicle’s service dates can be a tedious task. Luckily, a fleet management software can help you with that.
In Conclusion
As you can see, there are numerous small hacks that can help in significantly reducing your expenditure. And fortunately, most of these take minimal time to be embraced.
With reduced expenses, your company will have more resources for fleet acquisition and expansion. There are also much fewer chances of errors and supply chain issues when you utilize the right resources to operate your fleets.
