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How Fuel Consumption Impacts Your Business

By Verizon Connect Team May 24, 2022

All businesses that work with vehicles know how important fuel is and now with the fuel rising costs even more. For a fleet to be successful as well as be a worthy component to its competitors, a business needs to get the most out of its fuel consumption and use it as efficiently as possible. 

Fuel costs represent a significant part of total fleet costs. While it is estimated that approximately 15% of total costs are fuel costs, this can vary significantly depending on the fleet's type.¹ Even a slight reduction in fuel costs shouldn’t be underestimated – cutting down fuel costs by 10% can result in a 31% increase in profit. This could make all the difference between a business making a profit or a loss on the bottom line.²

Knowing these facts is all well and good, but how do you work out fuel consumption and subsequently reduce it? Read on to find out what can help your business.

Commercial vehicle fleet by fuel types in Australia

In Australia, petrol remains the fuel of choice for its fleets. In 2021, 71.7% of vehicles were powered by petrol, of which 70.2% used unleaded petrol and 1.5% used leaded petrol. The next most-used fuel was diesel, which was far behind at 26.4%. The remaining 1.8% fell into the “others” category.³

The types of vehicles on Australian roads have gradually changed over the years. Light rigid trucks are now the most popular type of vehicle in use and the number of registrations continues to increase. Between 2020 and 2021, there was a 6.0% increase in their registrations. The next biggest increase could be determined with articulated trucks with a 4.6% gain.

Despite passenger vehicle registrations increasing by 1.2% between these years, their proportion in the overall fleet fell by almost half a percent to 73.7%. On the other hand, the fleet share of light commercial vehicles rose dramatically to 17.5% although the number of registrations only increased by 3.3%.⁴

Comparison with New Zealand

The situation is very similar when compared to Australia’s neighbour, New Zealand. In 2020, light passenger vehicles made up 71% of the fleet, just a little less than Australia at 73.7%. While light commercial vehicles accounted for 20% of the fleet, Australia was a tad behind at 17.5%.⁵

Petrol is also the main fuel used in New Zealand’s fleets. 77.29% of vehicles rely on it, a few percent more than Australia’s fleet at 71.7%. The next most popular fuel type is also diesel with 20.23% of vehicles using it to get around, just under Australia’s result of 26.4%.⁶

How technology can help reduce fuel consumption

Keep track of fuel consumption

A GPS fleet tracking solution generates reports, which reveal information about a business’ fleet that can be used to reduce fuel consumption. Here are four types of report:

  • Fuel efficiency report: Fuel purchases are compared against certain driving events such as speeding and sudden braking to work out vehicles’ fuel efficiency.
  • Fuel purchased report: The fuel bought for each vehicle is listed here for a better overview of what is being spent so it is easier to work out fuel consumption in trucks.
  • Lost fuel report: Reveals fuel purchases that cannot be accounted for such as if a fuel card is used without the actual vehicle being present or if a larger amount of fuel is bought than what a vehicle’s tank can handle.
  • Carbon footprint report: The carbon footprint of each vehicle is measured and revealed in this report. Fleet managers can then see how important it is to reduce fuel consumption in trucks.

Choose the best routes

The software enables businesses to plan better and select optimal routes in order to cut down on fuel wastage. Maps show the location and end destination of every vehicle for a better overview. Traffic, weather, and other eventualities are monitored so drivers can be quickly rerouted if needed. 

Improve driver behaviour

Idling, accelerating quickly, and braking harshly are all causes of wasted fuel. Customisable driver behaviour reports show where and when this reckless behaviour takes place. Automatic text or email alerts can also be set up that notify managers of bad driving.

A decreased fuel consumption isn’t the only benefit of a fleet tracking solution. Here you will find additional advantages of a fleet management solution.

You no longer have to be kept in the dark about ways of how to reduce fuel consumption. Fleet management technology helps you get a better overview of your business and enables you to stay competitive and sustainable. Discover more about fleet management software and get a demo by visiting https://www.verizonconnect.com/au/

1. https://www.idae.es/sites/default/files/documentos/publicaciones_idae/documentos_10232_guia_gestion_combustible_flotas_carretera_06_32bad0b7.pdf
3. https://www.abs.gov.au/statistics/industry/tourism-and-transport/motor-vehicle-census-australia/latest-release#fuel-type
5. https://www.transport.govt.nz//assets/Uploads/Report/AnnualFleetStatistics.pdf
6.  https://www.transport.govt.nz//assets/Uploads/Report/AnnualFleetStatistics.pdf

Verizon Connect Team

The telematics industry is moving at a fast pace. With new developments, use cases and feature sets emerging every day, it can be challenging to make the right decision for your fleet business. Verizon Connect Staff is conceptualized to be a partner for your business and help you make smart choices based on useful content.

Tags: Cost Control, Performance & Coaching

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