Automotive Fleet

NOV 2013

Magazine for the car and truck fleet and leasing industry

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OPERATING COSTS 2013 OPERATING COSTS - INTERMEDIATE CARS TOTAL UNITS: 200,240 <24,000 MILES CENTS DOLLARS PER PER MILE MONTH 0.129 $204.08 24,001-48,000 MILES CENTS DOLLARS PER PER MILE MONTH 0.139 $263.36 48,001-80,000 MILES CENTS DOLLARS PER PER MILE MONTH 0.131 $266.76 80,001-100,000 MILES CENTS DOLLARS PER PER MILE MONTH 0.127 $271.88 selectors to take advantage of fuel-efcient technologies, weight GASOLINE reductions, higher speed transmisOIL 0.005 $8.82 0.004 $6.83 0.007 $9.98 0.005 $10.21 sions, and appropriate drive types TIRES 0.005 $7.44 0.012 $15.80 0.014 $28.40 0.013 $33.94 to meet their business necessity. 0.005 $9.43 0.016 $24.71 0.022 $47.74 0.023 $58.37 Furthermore, the importance of MAINTENANCE/REPAIR WARRANTY RECOVERY (0.0001) ($0.26) (0.0002) ($0.52) (0.0003) ($1.14) (0.0002) ($0.35) driver behavior is essential," said 0.144 $229.51 0.171 $310.18 0.174 $351.74 0.168 $374.05 Donahue of Emkay. "According TOTAL OPERATING COSTS to the EPA, a driver can impact fuel efciency as fuels such as CNG and LPG, where feasitent to which alternative-fuel vehicles will much as 33 percent. Te ble," said Wayne Reynolds, manager of upft be integrated into commercial feets. implementation of drivdesign and consultation at LeasePlan USA. "Increased usage of alternative-fuel vehier behavior trainings to cles should help feets lower their PM costs reduce speeds, idling, and Forecast of Future Fuel Costs and lessen the impact of potential oil price rapid deceleration, and inTe biggest impact on future fuel pricfuctuation," said Chad Christensen, stratecrease accident avoidance, es is the increasing supply of liquid fuels gic consultant for GE Capital Fleet Services. BAUER continue to gain momenfrom non-OPEC countries. For instance, Although the anticipation is for fuel prictum within the industry. When paired with the EIA expects Brent crude oil prices to es to decline, other unpredictable market technological GPS solutions, route optimifall to $102 per barrel in 2014, from $108 forces could cause them to increase. "Both zation can reduce miles driven, scheduling, per barrel in 2013. gasoline and diesel prices are expected to speeds, and personal use." "As fuel efciencies imdecline somewhat in 2014; however, marTe proliferation of hybrids and AFVs has prove, the EIA projects lowket conditions create signifcant volatility given feets more options when selecting veer gasoline consumption. in fuel prices, so we recommend feets budhicles to help them manage their fuel spend. Te EIA increased the avget conservatively," said Blaine of Donlen. "Te ROI for hybrids and alt-fuel vehicles erage regular gasoline reWhile others also foresee lower fuel pricare attractive, even at current fuel prices, partail price forecasts during es in 2014, they caution about potential volticularly since conversion costs are declinthe 3rd and 4th quarters of atility caused by other external forces. DONAHUE ing a bit and there are many more options 2013 to $3.60 and $3.44 "We anticipate the average cost of fuel per gallon while forecasting an average of to decline in 2014, which will have a favoravailable on the market today," said Blaine of Donlen. "In addition, OEMs are start$3.43 in 2014 due to falling crude oil prices," able impact on feets. Te Energy Informaing to ofer feet incentives on some hybrid said Donahue of Emkay. "Tese fuel prices tion Administration (EIA) is predicting an models, so there are many cost-efective opcan continue to be ofset by several defenaverage price of $3.40 and $3.76 for gasotions on the market today. Fleets are using sive and strategic tactics that include, but line and diesel, respectively, as of the Shorttelematics as a way to control fuel spend; are not limited to, vehicle selection, driver Term Energy Outlook published on October however, feets are looking for telematics training, telematics, and proactive opera8," said Schnedeker of GE Capital Fleet Serto bring spend reductions in more areas tional consulting." vices. "Short-term volatility will depend on than just fuel. With fuel prices varying by Others, likewise, foresee current market Middle East geopolitical status and global as much as 10 to 15 cents per gallon withtrends leading to lower prices in the 2014 economic growth rate." calendar-year. in a three-mile radius, feets are also using In fact, most feet management compaonline tools and smartphone apps to bet"While there are a number of variables nies are basing their fuel price forecast on ter control where drivers purchase fuel." that can increase volatility in the marketdata provided by the EIA. Nowadays, feets are taking a more broadplace, we foresee relatively fat pricing in "Due to the inherent volatility and multibased approach to reduce fuel consumption the coming months," said Piscopo of ARI. tude of uncertain supply and demand indeand fuel costs. "We are constantly on the alert for potential pendent variables impacting price, LeasePlan "Tis includes starting with the basics, spikes, so we encourage our feets to keep relies heavily on established government/ such as downsizing vehicles where possia proactive fuel management program in industry forecasts (mainly EIA) for interble, reducing weight and place at all times. Dodd-Frank legislation nal planning and external idle time, and increasing has changed the fuel-price hedging marfuel price forecast dissemdriver involvement and edket; therefore, creating hedging programs ination. Currently, the EIA ucation. Concurrent with for smaller volume clients has become a is forecasting average rethese relatively simple steps, challenge. As a result, small- and mid-sized tail pump prices at $3.38 many more feets are emfeets are more vulnerable to market price per gallon for the remainploying telematics and othfuctuations." der of 2013 and $3.37 for FORTIN ers are moving to gaseous REYNOLDS Te other unknown variable is the ex2014," said Paul Fortin, 22 AUTOMOTIVE FLEET I NOVEMBER 2013

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