Dealing with Increased Petrol Prices for Business Fleet Operators

Recent news suggests that only part of the oil price increases have been passed on to New Zealand motorists and the tense situation in Libya and other parts of the Middle East mean that the barrel price of oil could continue to increase dramatically.

It is clear that we have now well and truly crossed the psychological barrier of $2 per litre of 91 Octane petrol in NZ and Luigi Cappel, Sales & Marketing Manager of GeoSmart said he would be surprised if we drop below it again even if Saudi increases their oil production as announced.

Cappel said "Companies are  going to feel the pain and need to look at ways of saving money on their vehicle running costs if they are going to stay viable and profitable. All goods and services have a transport component and therefore this will impact on both business to business and business to consumer."

You will remember the story of how to cook a frog. In 1869 Friedrich Goltz demonstrated that if you put a frog into a pot of water and heated it very slowly, the frog would not attempt to escape. Why he was doing it was another story which you can read here. The anecdote is important because we haven’t fundamentally changed our driving habits. Many of us have lead feet and as lovers of driving and fast cars, users of air conditioning and other features, we waste a lot of fuel. Perhaps the new price increases will make us jump out of the boiling water and modify our driving behaviour.

Many companies have been driving smart for some time. For example, large commercial fleet companies have been running with Fleet Management solutions using GeoSmart Maps for years. Many get total ROI from being able to claim Road User Charge Tax (RUC) Rebates, which is being able to prove when they are driving on private roads or property. That means that the added benefits are often free. Fleet Management uses technology to monitor many aspects of driver behaviour with a view to being able to improve driver training. For example it can monitor aspects such as harsh acceleration and braking, idling time is another aspect that consumes fuel.

Car Navigation is another tool that has been under rated. But lets look at some facts. If it costs over one dollar per km (before the latest fuel price hikes) to drive a relatively small vehicle (not counting staff costs and other items), what does it cost to run commercial vehicles? Can you afford to pay people to drive in circles looking for their next stop?

A new feature in car navigation in New Zealand is AA Real Time Traffic. This is a service that provides real time information advising of accidents, incidents and real time congestion covering all of New Zealand. This service is available for free on websites such as AA Maps, AA Roadwatch as well as TXT and Email Alerts. What is really exciting is that you can now get this information direct to you car navigation devices including selected models from brands Navman, TomTom, Garmin Asus, and Pantera. This page shows how it works.

If you consider how much time you have spent in congested traffic, wouldn’t it be great if you could be informed about incidents before you get stuck behind them. Note AA Traffic isn't limited to State Highways,  it covers all arterials as well, so only really leaves out small residential streets.

GeoSmart is now discussing with Fleet Management solution providers, how to get this information into the Fleet Dispatch rooms of freight, distribution and service companies who are managing vehicle fleets and could better manage their operations if they can see their vehicles and the traffic incidents concurrently on the same map.

Route Optimisation is another tool that has suddenly gained popularity. Cappel said "GeoSmart has offered these services to large operators for around 5 years, however we have recently launched Route2GO Lite a low cost Software as a Service solution accessible to companies with as few as 2 vehicles and accessed via web browser. In effect the concept is that if you have a number of vehicles, we can tell you what sequence they should do their stops in, in order to drive the least distance and time. This doesn’t just take the shortest route, it takes into consideration aspects such as which roads have the least number of stops, the speed zones, the angles of corners, turn restrictions and more. It is a complex and involved problem which we have automated into an application that can be run from a web browser on a pay as you go basis."

"We made the offer of a free trial whereby we will use Route2GO for free over up to 5 previous runs to allow you to compare the route previously driven, with what our recommendations would be. Many of the results have been astounding with time improvements of between half an hour and 2 hours on a run, with significant savings in fuel and other overheads, as well as the ability to do more work in the same day without an increase in fixed overheads. That offer is still available and of course the payback is now significantly increased."

If we accept that petrol prices will continue to increase, business fleet operators are going to have to look to new solutions in order to operate smarter. Those that do so soon will achieve a competitive advantage.