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Hedging Exposures to Fuel Price Volatility

Fuel is one of the largest and most difficult expenses to predict and control for companies that utilize a fleet of vehicles. High fuel costs have resulted from rising crude oil prices throughout 2022, compounding expenses among fleets. Even as prices begin to stabilize, it’s still important for fleet managers to conserve fuel, maximize efficiency and reduce vehicle emissions to minimize associated costs.

Implementing certain company policies can help reduce fuel costs and make fleet operations more efficient. Here are some ways to manage fuel usage within a fleet:

  • Monitor driving patterns. According to the U.S. Department of Transportation, there can be as much as a 35% difference in fuel consumption between a good and poor driver. By monitoring speeding, braking and acceleration patterns, fleet managers can determine whether or not their drivers are operating efficiently.
  • Cut engine idling. Idling can burn a quarter to a half gallon of fuel per hour. Drivers should turn off the engine while waiting or making deliveries and while stuck in traffic. They also shouldn’t idle to warm up the engine.
  • Improve route efficiency. Utilizing GPS tracking technology can streamline operations and reduce fuel consumption by ensuring that drivers aren’t wasting their time and fuel driving back and forth during work.
  • Provide driver training. Since drivers are at the wheel of fleet operations, it’s imperative they have proper training regarding habits that can improve their fuel efficiency on the road. Specifically, drivers should practice keeping gears low when accelerating, changing gears early, driving at slower speeds and reading the road more efficiently.