Fuel management is the practice that allows fleet managers to control fuel usage and costs. Why is it important? The American Transportation Research Institute research claims that 24% of overall fleet costs is attributed to fuel consumption.
It's worth saying that at the beginning of 2021, fuel prices have grown more than half a dollar per gallon. The global demand is high, so it won't likely disappear any time soon. The report by Government Fleet says that fleet operators attribute "fuel price increases, parts, and oil increases, and technology costs" to the main factor that leads to higher operating expenses.
What’s more, every fleet manager knows how challenging and complex this whole process is. Well, unless you use technology applied to fleet management. A fuel management system (an FMS) combines both hardware and software products. Such systems help maintain, control, and monitor fuel consumption for fleets of any size, so it's possible to integrate measurement and control processes from fueling a truck to further consumption.
Besides, automated fuel management and control systems help you comply with environmental regulations and get accurate, up-to-date fuel, engine, and vehicle performance data.
What is a fuel management system?
As mentioned earlier, modern fleet fuel management systems include both software and hardware elements. The hardware part uses a telematics system that sends vehicle data using telecommunication devices in real-time. Then a fleet manager receives this information and checks important (and visually appealing) insights on fuel consumption and storage.
Our times are all about digitalization that translates into higher efficiency. For fleet managers, it means that they no longer have to do things manually. This way, when you have all the data at hand, it gets much easier to analyze your fuel-related costs and, eventually, reduce its consumption.
Why you need to adopt a fuel management software
Control fuel costs. It's all about analyzing fuel data. With a management system in place, it gets much easier to see the big picture. You'll find out every detail about fuel transactions, compare fuel consumption and spendings, and learn if there's a place for saving up a buck or two. In all, you will better understand fuel buying within your fleet and take action when needed.
Prevent fuel theft. Constant monitoring allows you to have live updates on fuel amounts in vehicles, so you will receive alerts when unauthorized fuel leakage occurs. For instance, the report by Softwareadvice claims that 53% of fleet managers felt that they often realized that fuel costs exceed projections.
Introduce responsive driving. Eliminate dangerous speeding and abrupt braking. With proper driving behavior analysis, it's easier to incorporate efficient driving habits that are both secure and fuel-friendly.
What’s interesting is that aggressive driving is both dangerous and costly. Fueleconomy provides some interesting stats: for instance, maneuvers such as speeding and swift acceleration decrease the gas mileage by nearly 15% to 30% at highway speeds and 10% to 40% in stop-and-go traffic.
Manage fuel taxes. Forget about manually calculating taxes using outdated spreadsheets. Using the data from a vehicle's GPS, an FMS calculates the distance and fuel to make sure you come up with accurate tax reports.
The benefits of using a fuel management system
Fuel management systems make it possible to track the actual consumption, refueling, and possible fuel theft online. This practice:
- Provides control over fuel purchases;
- Eliminates the misuse of fuel;
- Helps to improve the discipline and driving styles of drivers;
- Reduces idle driving;
- Allows reducing the emission of CO2 by comparing vehicle performance;
- Optimizes costs;
- Makes fuel reporting easy.
Perhaps, the most important benefits of fleet management software are improvements in budgeting, data analysis, and cost estimating. Plus, such systems eliminate guesswork and the need to resort to outdated spreadsheets to make calculations.
The ways to adopt an FMS
Multiple vendors in the industry provide the opportunity to extract data from fuel cards and mobile applications that drivers use. Further on, it's possible to go into logs, and International Fuel Tax Agreement (IFTA) reports. That approach allows improving operational efficiency and controlling fuel costs. Of course, you won't get detailed insights, but still, this method is valid, especially for small fleets with limited budgets.
An electronic logging device (or an ELD) is a device that allows tracking hours of service (HOS). This method provides driver behavior reports but not online. Instead, such devices transfer data to a USB so you can check it for a certain period of time.
ELD paired with telematics
This method represents a combination of hardware and software. The major advantage of telematics-powered infrastructure is that you can collect data in real-time. Plus, you'll receive alerts and set up predictive maintenance, not to mention that this approach provides vast opportunities for further customization.
Custom or out-of-the-box?
In comparison with custom software, out-of-the-box solutions, as their name suggests, are more affordable, easy to learn, and have a standard set of features. However, that basically means that despite the low level of entry, such solutions may not solve the precise needs of your business.
On the other side of the coin, custom-made solutions allow individual modifications and offer a great deal of flexibility. If you've decided to have complete control over the software you're using, go for custom solutions.
The choice boils down to your personal business goals. For instance, if your fleet is small and the requirements are more or less standard, choose an off-the-shelf solution. On the other hand, if your challenges are unique, consider a custom-made solution.
If you go a custom route
For the last several years, Akveo has been creating solutions that support logistics businesses worldwide. We help hardware manufacturers and fleet managers to automate their operations and profit from data-driven decisions. Up to date, we have developed a number of products in the telematics and automotive domain, so we can help with your solution.
If you've chosen to go the custom route and develop your own fuel management software, you need a proper front-end or UI/UX. We got you covered. The fleet management software provides a striking design for systems of any complexity, so you won’t have to create the UI from scratch.
Every fleet operator knows that managing fuel brings constant headaches and stress, not to mention money loss for the business. However, technology comes in real handy, and now it's possible to control fuel spendings via a smartphone or a tablet.
The chart below says it all: the use of fleet management software is growing. If you want to beat the competition, it’s advisable to adopt such software as early as possible. Well, unless you want to play catchup.
For many people, telematics is still associated exclusively with tracking the movement of vehicles. However, with the right approach, it is no big deal to effectively use the funds of the vehicle fleet, even based on simple travel data. The comparison of fuel costs with the performed trips results in more economical routes.
There's a common myth claiming that "to ensure better fuel economy, one needs to have a small vehicle." Despite a certain logic behind this statement, small cars aren't the most efficient. But proper fuel management systems are. The FMS systems are universal. They are suitable for any vehicle fleet where gasoline or diesel fuel is used. Even the most exotic types of transport can be equipped with fuel control systems and show a desirable reduction in consumption.
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