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What You Should Know About Rising Fuel Prices

By Verizon Connect July 28, 2022

For carriers and small shipping companies, any increase in fuel prices can drastically influence overhead operations costs and impact profitability. Let's look at why rising fuel costs are important to independent shipping organizations and discuss actionable steps that businesses can take to thrive despite rising costs.

Fuel prices are trending up. 

According to the U.S. Energy Information Administration (EIA), based on the April 12, 2022 update to the Short-Term Energy Outlook (STEO), the administration forecasts that the retail price of regular-grade gasoline will average $3.84 per gallon (gal) in the United States this summer and that retail diesel prices will average $4.57/gal. Additionally, EIA suggests that crude oil price volatility could cause gasoline prices to be higher or lower than the forecast, which could affect gasoline demand.

While the rising costs of both gasoline and diesel are important for all carriers to consider, they’re even more critical for hazmat distributors in the oil and gas industry. Time is money when it comes to moving fuel, and these carriers especially must proactively address fuel efficiency and work to shorten travel times. This includes tapping into more efficient routes, harnessing instant location information and reducing response times.

How small businesses can combat higher prices. 

One of the easiest ways for carriers and small trucking companies to start streamlining fuel efficiency in 2022 and beyond is using technology. Near real-time software can help companies better understand where trucks are going, the routes they are taking and where opportunities for improvement lie.

For instance, Verizon Connect worked with Bill Howe Plumbing and their risk manager to help them use telematics to reduce annual accidents by 87%. They’ve seen other positive side effects, too, including lower insurance costs and reduced fuel consumption.

Smaller companies can leverage this free fuel cost tool to personalize and estimate the cost of their fleet’s fuel consumption. 

Find out what's impacting your fuel efficiency

To continue to combat the effects of rising fuel costs, businesses can leverage near real-time GPS tracking to monitor fuel efficiency–allowing them to better understand how much gasoline or diesel is consumed by their fleet each year. In addition, they can pinpoint waste in their operations and create action plans to become more efficient long-term.

Some of the lesser-known areas that impact fuel efficiency include:

  • Vehicle Speed: Did you know that every time a driver goes 5 mph above the posted speed limit it can cost up to 20 cents more per gallon of gas? Sophisticated GPS fleet tracking systems can monitor when drivers are exceeding posted speed limits and help managers educate on efficient speed methods.
  • Idle Times: Another shocking area of fuel waste is idle engines. According to the U.S. Department of Energy Office of Energy Efficiency & Renewable Energy, idling can use a quarter to a half-gallon of fuel per hour. Owners and managers can leverage GPS fleet tracking software to be notified when a truck is idling for too long, allowing them to engage with their drivers in a teachable way to help increase productivity and reduce fuel waste.
  • Routing & Dispatching: At the end of the day, increasing fuel efficiency comes down to shorter routes and better-informed drivers. When dispatchers are tracking traffic patterns in near real-time, they can quickly inform drivers of the most direct route for the shortest travel times. For service vehicles, dispatchers can use GPS location services to easily identify vehicles in the area and send the closest ones to any job site.
  • Vehicle Maintenance: Making sure fleet vehicles receive regular maintenance can keep fuel costs down over time and keeping an engine tuned up can help increase gas mileage. Telematics systems can alert fleet managers when vehicles are due for maintenance based on date, mileage, or engine alerts.  

With the right technology and ample planning and preparation, all facets of your business, from back-end operations to drivers, can streamline efficiency and stretch the boundaries of fuel costs.

Download our free eBook for more tips on increasing fleet fuel efficiency and how to save money on fuel.   

Verizon Connect

Verizon Connect Staff represents a team of professionals passionate about everything telematics. Get to hear about the latest trends, product features and industry best practices from the desk of Verizon Connect Staff.

Tags: Cost control, Dispatching & Scheduling, Field management, Productivity & Efficiency, Revenue & ROI, Routing, Team Management, Vehicle Maintenance

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