Automotive Fleet

NOV 2013

Magazine for the car and truck fleet and leasing industry

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OPERATING COSTS 2013 OPERATING COSTS - COMPACT CARS TOTAL UNITS: 32,836 <24,000 MILES CENTS DOLLARS PER PER MILE MONTH 0.12 $218.04 24,001-48,000 MILES CENTS DOLLARS PER PER MILE MONTH 0.122 $215.82 48,001-80,000 MILES CENTS DOLLARS PER PER MILE MONTH 0.125 $258.72 80,001-100,000 MILES CENTS DOLLARS PER PER MILE MONTH 0.113 $227.33 was a welcome relief to feets in 2013," said Amy Blaine, VP, conGASOLINE sulting, analytics, and sustainabilOIL 0.006 $7.68 0.006 $10.87 0.007 $8.86 0.005 $8.30 ity for Donlen. 0.004 $8.09 0.009 $16.46 0.015 $19.71 0.011 $26.00 Te moderation of fuel prices TIRES MAINTENANCE/REPAIR 0.016 $13.44 0.017 $32.10 0.019 $43.18 0.030 $57.78 has resulted in a tangible decline WARRANTY RECOVERY (0.0001) ($0.25) (0.0008) ($0.40) (0.0003) ($0.91) (0.0014) ($0.32) in per-gallon prices. 0.146 $247.00 0.154 $274.85 0.166 $329.56 0.158 $319.09 "Favorable trends in fuel price TOTAL OPERATING COSTS are reducing the cost of fuel for feets in 2013. Te average and analytics for PHH Arval. addition, feets are seeking ways to increase national price of gasoline One consequence to the stable fuel pricdriver and operator awareness of cost savin 2013 is expected to be es has been a decreased interest in hybrid ings opportunities," said Piscopo of ARI. 2 percent, or 8 cents, lowmodels. As has happened in the past, there "Tey are also becoming more vigilant looker than 2012. Trough Auseems to be a direct relationship between ing for potential instances of fuel card misgust, the average price of the price of fuel and interest in hybrids and use and fraud." gasoline was 5 cents lower other alternative-fuel vehicles (AFVs). Specifc cost-saving steps cited by PisBLAINE year-over-year. Te price of "When gasoline reaches the $4-per-gallon copo include: diesel is only half of 1 cent range, as it did twice in 2012, the feet industry's ● Installing and monitoring vehicle higher and is expected to focus on hybrids and other alternative-fuel telematics. vehicles signifcantly increases. However, ● Implementing no-idle policies. end the year 1 cent lower or a 0.2 percent decline," gasoline prices have been below $3.75 so ● Modifying fuel-based PM strategies. said Jayme Schnedeker, far in 2013, resulting in a decrease in hybrid ● Optimizing routes. fuel product manager for quotes and orders. Even with the decline in Other strategies include a regular vehicle GE Capital Fleet Services. activity around AFVs, fuel economy remains replacement schedule, the use of alternative SCHNEDEKER In addition to price dea top focus during the vehicle selection fuels where applicable, and the implementaclines, feets have experienced a decrease in process. Furthermore, the trend towards tion of telematics systems. overall fuel consumption as a result of opimproving fuel economy "Investment in opportunities to reduce through a migration to fuel consumption continues to be a focus for erating more fuel-efcient vehicles. "Gallon consumptions have decreased smaller displacement feets seeking to mitigate fuel cost. Replace0.62 percent for diesel and increased 2.47 (non-hybrid) engines ment of older vehicles or those not meeting percent for gasoline. Current portfolio feets continues," said Becky efciency expectations has been an imporhave utilized newer-vehicle technologies, Langmandel, director of tant step. Tis, combined with implemenimplemented appropriate driver behavior strategic modeling and tation of alternative-fuel vehicle programs measures, and rightsized their feets," said analytics research team LANGMANDEL for select use cases, has been an important Mark Donahue, business analyst for Emkay. at LeasePlan USA. action to reducing cost," said Schnedeker of Some trace the current stabilization of GE Capital Fleet Services. "Finally, installafuel prices back to the summer of 2012. In Strategies to Mitigate Fuel Cost tion of telematics to enhance feet utilization fact, fuel prices have been stable since 2011. Not lulled by stable fuel prices, feets conhas been essential to feets seeking to opti"Comparing the 12 months ending Autinue to adopt a variety of fuel-reduction mize fuel costs. Te information generatgust 2013 to the prior 12 months, average strategies. According to Sandler at PHH ed by telematics to reduce idling, enhance fuel prices for gasoline stayed relatively fat, Arval, the majority of feets are employing driver behavior, and increase vehicle prowhile average fuel prices for diesel had a one or more of the following strategies to ductivity has contributed to reductions in small uptick under 2 percent. Going back mitigate the cost of fuel: fuel consumption and overall fuel expense." four years, fuel prices increased steadily ● Incorporating more fuel-efcient Additional fuel-reduction initiatives from 2009 through May 2011, then began vehicles in their ordering/replacement cycle. include downsizing and the use of nonto stabilize over the next two years. Fleets ● Monitoring fuel purchases more closely. traditional fuels, such as switching to diehave become accustomed ● Educating drivers on the importance sel and hybrids. to this higher, stabilized "Tere is a continuation of the trend to of proper vehicle maintenance to their cost of fuel, and the imsmaller vehicles, diesel engines, and hybrid vehicles' fuel economy. pact of the last year-overIn addition, there are a multitude of othvehicles," said Bauer of Wheels Inc. year change in pump pricer initiatives being adopted by feets to reAnother strategy focuses on the adopes has been minimal," said tion of new technologies and modifying duce fuel consumption. Bob Sandler, vice president "Improving overall mpg remains a primadriver behavior. SANDLER of enterprise consulting ry fuel cost-reduction strategy for feets. In "Fleets are rightsizing their vehicle 20 AUTOMOTIVE FLEET I NOVEMBER 2013

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