Oil prices reach new high. How can truck drivers stay profitable?
Truck owners know that when you pay all the bills you realize how costly running a truck can be. Multiply that by hundreds and it’s not surprising to know that trucking fleet owners are constantly keeping an eye out for ways to reduce fuel costs.
With oil prices topping $95 a barrel recently, pushed by higher seasonal demand and hints of stability in European financial markets, it is just another reminder to truck owners, in fact anyone in the freight industry, that fuel costs need to be managed if a fleet (or single owner/operator) is to remain profitable.
Squeezed profit margins can lead to unsafe driving
Some truck fleet owners respond to increased costs by simply working longer hours and driving more miles. This can seem like an easy fix on the surface but it can end up being more expensive in the long run. Particularly with CSA 2010 safety records having the potential to affect insurance premiums, the frequency of FMCSA audits or even a possible shutdown, it’s simply not worth the risk.
Rather than risk FMCSA or local state infringements for violating HOS rules or driving unsafely, is there another way to beat rising truck fuel prices?
Use less fuel by driving your truck smarter, not less
If you’ve ever sat down and calculated the running costs for owning and operating a truck, you’ll know that the cost per mile actually comes down the more you drive it. That’s because there are a range of fixed costs that don’t vary based on mileage – so even if you kept the truck cocooned in the yard, it’s still costing (a good reason to invest in fleet intelligence software to monitor asset utilization).
Expenses such as insurance, loan payments, and permits all accrue regardless of whether you’re rolling or not. It’s important to factor that into your strategy for reducing truck costs.
So the secret is not necessarily about reducing the number of miles driven. The real key is about maximizing every mile you drive, and making sure you minimize or eliminate where possible unnecessary miles.
Unnecessary miles can include taking the long route to a destination, repeat journeys (unable to make delivery for various reasons), or making empty back haul trips (one report suggests the number of empty trucks on the road at any given time to be as high as 30%).
By using smart capacity planning software, fleet owners can improve truck utilization significantly. Coordinating drivers, customers, and trucks to operate more efficiently can mean fewer wasted miles, deliveries timed to fit in with customer preferences, and smarter grouping of journey waypoints and destinations.
Oil prices continue to climb – will you beat them?
According to the U.S. government oil prices will continue to rise. Total petroleum stocks are down 62.6% from a year ago and they’re 5.6% lower than the five-year average. Supplies are falling as refineries import less oil while shipping more diesel and gasoline overseas. Airlines and shipping companies also are using more fuel than they did last year, and that’s pushing prices even higher.
What this means for truck owners is that they need to get smart to stay profitable and beat rising fuel costs. Investing in telematics, such as Telogis Fleet management software, can be an excellent way to not only monitor your fuel expenses but look for smarter ways to get the best mileage from your fuel dollars – optimized routing, fuel card reconciliation, and reduced idling times.
There’s not much you can do about rising fuel prices but you can make sure that you’re getting better value for every dollar you spend on gas for your truck fleet.