There's been a steady stream of articles about rising gas prices here on Triple Pundit. Some have looked at what the impacts of higher gas prices will be while others have acknowledged that they aren't going lower and asked if your business is ready for the "new normal" of high fuel prices. These articles have pointed out some very important aspects of high fuel prices, and I wanted to build on them by offering a few strategies for coping with the upward trend of gas prices. Here, I'd like to offer some advice to companies that operate fleets and see fuel as a capital expenditure.
There's been a steady stream of articles about rising gas prices here on Triple Pundit. Some have looked at what the impacts of higher gas prices will be while others have acknowledged that they aren't going lower and asked if your business is ready for the "new normal" of high fuel prices. These articles have pointed out some very important aspects of high fuel prices, and I wanted to build on them by offering a few strategies for coping with the upward trend of gas prices. Here, I'd like to offer some advice to companies that operate fleets and see fuel as a capital expenditure.
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Many businesses and fuel procurement offices have assumed that if they could just weather a few rough years, fuel costs would eventually stabilize. That assumption, however, is turning out to be flawed as oil prices are expected to rise by 30 percent in the next three years. Moreover, 2011 set the record for the higher average annual gas price, when adjusted for inflation. To get an idea of how dramatic the uptick has been in recent years, take a look at the graph at right.
Fortunately there are a few things that can be done to manage the new era of high fuel prices and add money to the company's bottom line. These strategies break down into three general methods of management:
- Improve fuel procurement operations;
- Better manage the fleet and general operations; and,
- Focus more intensely on route planning and shipment loads.
Improve fuel procurement operations
As fuel prices have risen, they've also become less predictable. These days, a five cent per gallon swing in either direction is commonplace. This means that buying at the wrong time can quickly bleed money from a fuel procurement budget, especially when purchasing hundreds or thousands of gallons at a time. A variety of automated fuel procurement options have popped up to help build some predictability into fuel prices by forecasting demand, monitoring on-hand fuel, and procuring at the best market price. These solutions help avoid bad purchase decisions and typically save companies a few cents on the gallon.
Article continues: http://www.triplepundit.com/2012/02/three-ways-manage-rising-gas-prices/
Gas prices image via Shutterstock
