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You cannot run a successful fleet business without proper planning. An ideal budget covers all aspects of the business, from fuel costs to vehicle maintenance. It helps you to manage your expenses and use your resource optimally. 

A preplanned financial statement is one smart move in the trucking industry and will save you a ton of money until fuel costs start fluctuating. 

Variations in fuel costs can cause disruptions in the budget and the annual balance sheets. With constant variations in fuel prices, companies need to find ways to reduce fuel costs while maintaining the quality of their services.

How To Calculate Fuel Costs?

To start calculating your fuel costs, collect stats such as fuel efficiency, fuel costs per gallon, and distance to be traveled to calculate fuel costs. If you have a fleet management solution with you, collecting this information would be a piece of cake for you. If not, you will have to check individual fuel receipts and the miles covered. 

Now, we will start calculating the approximate amount of fuel consumed and multiplying it by the fuel prices.

Fuel Costs = (Distance/Consumption) x Cost per gallon

Remember that this calculated cost is an approximation, and there is always a small margin for variations. You can calculate this cost manually or use spreadsheets to do your work.

What Is Fuel Overage?

When a trucking company dispatches a driver to make a delivery, they typically estimate the fuel quantity needed for the trip based on factors, such as distance, terrain, and load weight. 

However, the actual fuel consumption during the trip can vary due to various factors, such as traffic, weather, and driving style. If a driver purchases more fuel than was estimated for the trip, that extra fuel is considered a fuel overage. 

Fuel overage can occur for various reasons, such as unexpected traffic or delays, a need to take a longer route or the driver’s driving style. It can be costly for trucking companies, as they may have to pay for the extra fuel out of their pocket.

Fuel overage can be due to many factors, such as:-

  • Inefficient Route Planning:- Taking unnecessarily long and indirect routes can affect the planned fuel costs by wide margins.
  • Poor Driving Habits:- The driver’s driving habits also impact fuel usage. Behavior such as speeding, idling, and excessive braking impact fuel consumption and might vary the costs by an unexpected margin.
  • Improper Maintenance:- The vehicle’s condition has a massive impact on fuel consumption. A vehicle in prime condition will consume less fuel than other poorly maintained vehicles. 
  • Overloading:- If a truck is loaded more than its carrying capacity, it will consume more fuel per mile, affecting the fuel costs by vast margins in the long run.
  • Fuel Theft:- It is necessary to check the fuel purchases made by your drivers, as malpractices such as fuel theft will increase your fuel costs. These malpractices can be running from inside or outside of your business organization.
  • Fluctuating Fuel costs:- With constantly fluctuating fuel prices, it isn’t easy to prevent the fuel costs from deviating from the original prices.
  • Manual Errors:- Errors such as calculation mistakes or mistakes in fuel measurement can affect fuel costs with unexpected margins.

How To Reduce Fuel Expenses To Maximize Profits?

With so many factors in play, you have to keep fuel usage and costs in control to keep the business profitable. You can do so by managing your fuel expenses properly. 

  • Planning your trips:- 

Planning your trips can help you reduce fuel consumption. You have to choose the most efficient route for the job to minimize fuel consumption. You can do so by using route optimization software. It will display live road conditions, weather, and possible alternate routes that your drivers can choose if route A doesn’t work.

Another smart move would be running multiple errands on a single trip rather than making it more than one.

  • Monitor Fuel Usage:- 

You can also start monitoring your fuel consumption closely to identify patterns or trends that cause the overage. Look for any irregularities or spikes in fuel usage that could be linked to specific drivers or vehicles.

  • Reduce idling time:- 

Excessive idling can lead to significant fuel wastage. You can use telematics to identify vehicles idling in your fleet. 

Also, encourage your drivers to turn off the engine when the vehicle is not in use, such as during loading and unloading, and to avoid unnecessary idling time.

  • Maintain vehicles:- 

Proper maintenance of your trucks can help improve fuel efficiency. Poor brake system, engine fault, or any hole in the fuel tank can contribute significantly to the increased fuel cost. You need to conduct regular checkups of your vehicles before and after the trip. 

In these checkups, you can check the tire pressure, ensure proper engine tuning, and perform routine maintenance on the vehicle.

  • Control speed:- 

Speeding can also lead to increased fuel consumption. You should encourage your drivers to maintain a steady speed and avoid sudden acceleration or braking.

  • Address fuel theft:- 

Fuel theft can significantly contribute to fuel overage. Implement measures such as installing fuel monitoring systems, conducting regular audits of fuel usage, and implementing strict fueling procedures to prevent theft.

  • Implement fuel management systems:- 

You can also use fuel management systems to track fuel usage and detect anomalies or discrepancies. It will help you identify improvement areas and prevent fuel theft or misuse.

  • Negotiate fuel prices:- 

Always look for the stations with the best fuel prices and negotiate with suppliers for the best deals. You can also join a fuel buying group to leverage the group’s purchasing power and get better prices.

  • Use fuel cards

Lastly, consider using fuel cards that offer discounts, rebates, or cashback on fuel purchases. 

It can help you save money on fuel costs and track fuel expenses more easily.

Benefits Of Fuel Cards 

  • Budget control:- Fuel cards allow you to set spending limits for each card, so you can control how much fuel each driver can purchase. It helps prevent drivers from filling up more than they need or making unnecessary stops.
  • Real-time tracking:- Fuel card packages often come with an online account or mobile app that allows you to track fuel purchases in real time. With it, you can quickly monitor fuel expenses and identify potential fuel overage or fraud.
  • Data analytics:- Companies offering fuel cards usually provide detailed reports and analytics that can help you identify trends in fuel consumption and costs. This information can help you make informed decisions and optimize your fleet’s fuel usage.
  • Convenience:- A fuel card eliminates drivers’ need to carry cash or credit cards for fuel purchases. It reduces the risk of losing receipts, overcharging, or fraudulent charges.
  • Discounts and rewards:- Many fuel card companies offer discounts and rewards for fuel purchases made at specific locations. These discounts can help you save money on fuel costs and incentivize drivers to use the designated fuel stations.

Why Should You Go With Matrack Fuel Cards?

Matrack Fuel Cards is one of the best fuel cards in the market. It is widely accepted by fueling stations in the country. It offers various benefits to business owners, i.e., from managing fuel expenses efficiently to getting fuel rebates on every fuel purchase. 

Businesses can also use Matrack Fuel Cards to focus on their core operations while leaving fuel management to a reliable and efficient system. Matrack cards are gaining popularity and attracting businesses of all sizes due to several benefits, some of which are listed below:

  • Cost Savings:- 

Our Fuel Cards provide businesses with a means of managing their fuel expenses. These cards can limit the number of fuel purchases per day, week, or month. By setting these limits, businesses can control fuel usage and reduce expenses. Drivers can use these cards at designated fuel stations offering lower fuel prices.

  • Convenience:- 

You can use the Matrack Fuel Cards at designated fuel stations located on major highways and in strategic locations. It makes it easy for drivers to find fuel stations and reduces the time spent searching for fuel. 

Additionally, these cards are accepted at most fuel stations, meaning drivers do not have to carry cash or credit cards to pay for fuel.

  • Fraud Protection:-

Matrack Fuel Cards can protect businesses from theft. These cards are designed to prevent unauthorized purchases. 

The business owner can customize these cards to limit the types of purchases made, such as fuel purchases only. Operators can also program the cards to track fuel purchases, allowing businesses to identify unauthorized purchases.

  • Reporting and Analytics:- 

Matrack Fuel Cards provide businesses with detailed reporting and analytics to help them better manage fuel expenses. 

The reports provide insights into fuel usage, fuel prices, and other data to identify cost-saving opportunities. You can access these reports online and download the data to use in your accounting and budgeting processes.

  • Time Management:- 

Matrack Fuel Cards reduce the time spent on fuel management by streamlining the fuel purchase process. Drivers do not have to fill out expense reports or submit receipts, which saves time for both the driver and the business. Moreover, fleet owners can use the cards to purchase other vehicle-related services, such as oil changes and repairs, which further reduces the time spent managing vehicle expenses.

Final Words

Reducing fuel usage and lowering driving costs can be achieved by implementing practical measures such as proper vehicle maintenance, efficient driving practices, and the use of technology. 

With fuel prices consistently rising, reducing fuel consumption has become more important than ever in the trucking industry. By making smart decisions, businesses can not only cut down on fuel costs but also improve the efficiency of their operations. While it may take some effort and investment to implement these measures, the long-term benefits in terms of cost savings, environmental impact, and improved customer service make it all worthwhile. 

In short, reducing fuel usage and lowering driving costs is an essential part of any trucking business, and it is a goal that we should pursue with dedication and commitment.

Posted in Fuel management

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