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Tackling the fleet fuel burden

Tackling the fleet fuel burden
Andy Allen, head of BP Fuel Cards
It can be all too easy for companies to take their eye off the ball when it comes to the proactive management of business costs.
We are all so busy trying to do our day jobs that the use of vital business intelligence to improve business performance can often get overlooked. Such an oversight, however, can prove to be a silent business killer.
For fleet businesses, the close scrutiny and management of all key areas of spend can have a significant impact on the bottom line – and no fleet cost offers a better illustration of this than fuel.
Fuel is one of the biggest single overheads for fleet operators – and the UK Chancellor has now added to the burden for those running diesel cars with a hike in the diesel car supplement from three to four per cent.
Furthermore, it’s volatile, which makes business planning and budgeting a significant challenge.
Following a short period of relatively stability, prices at the pump, at the time of writing, had surged upwards. This has largely been a response to increases in the trading cost of a barrel of oil, from $50 to $65. Such sudden spikes in fuel costs can, of course, have a substantial impact on business profitability.
And adding to this uncertainty, consumption per driver, per vehicle, will also fluctuate, depending upon vehicle type, mileage and driving style behind the wheel.

The flip side of the coin
As fuel expenditure is not a fixed business overhead however, companies can take a number of steps to reduce consumption or mitigate cost volatility, from improved vehicle maintenance to fuel hedging.
The two principal options involve reviewing fleet composition and influencing the input of the driver.
Purchasing or leasing more fuel-efficient vehicles on renewal can offer a longer-term option. In the short term, however, this can prove financially prohibitive.
Effecting changes in driving behaviour, by promoting a more fuel-efficient performance behind the wheel, can help realise a more immediate return.
Enter stage left – telematics and fuel card data.

Data convergence: the fleet insights Holy Grail
The emergence of big data has presented businesses with a significant challenge – making sense of the fire hose of information that is now available to them. Industry suppliers are developing ever more intuitive solutions to simplify this process, collating and presenting back the key nuggets of information they require.
The integration of telematics and fuel card data can hold the key to transparent and simplified fuel management information – helping achieve better control over expenditure and business cashflow.
Fuel card data combined with odometer readings can provide an indicative vehicle mpg. In isolation however, it cannot provide insights into why this mpg might be lower than expected, or lower than that of a comparable vehicle, driven by a different employee.
When fuel card transactions are considered alongside telematics data that detail where and how drivers are driving, fleet managers have much greater visibility.
A low mpg might be attributable to journeys in residential areas or built-up locations, such as central London for example, or it might be caused by harsh, inefficient, driving behaviour.
Solutions, such as BP FleetMove and FleetMove Pro, can now deliver this combined information to fleet managers via a single software interface.
Furthermore, these solutions can help companies identify unauthorised fuel purchases or incidents of fraud. Fleet managers, for example, can be immediately alerted should the location of a card transaction and vehicle fail to correspond.
With the UK growth outlook for the next five years revised downwards by the OBR to an average of 1.4 per cent, combining data streams in this way for more effective fuel management may prove more vital than ever in unlocking the door to improved profitability.

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