The November/December 2010 issue of
Government Fleet described unpredictable fuel costs as a top 10 challenge facing public sector fleets in 2011. In fact, this prognostication has proven true as fuel prices have steadily risen in the new year, and some analysts are now predicting upwards of $4 per gallon before year's end. Fleet owners we've spoken to are concerned they will see a repeat of three years ago when budgets were under severe strain with little relief in sight.
With a rough year ahead, private and public sector fleets are focused on driving down fuel costs and achieving predictable, manageable budgets. Public sector fleets have the added pressure of relying on funding from governmental agencies with significant shortfalls. However, the private sector is no better off, as fuel costs tend to be the second largest expense (after headcount), and lower profit margins from a poor economy are driving deep spending cuts.
With public and private fleets facing similar issues, do fuel management best practices exist in the private fleet world that can benefit public fleets? Private fleets get the biggest bang for their buck by adopting outsourced fuel management - a phenomenon that has not penetrated as much in the public sector. Outsourced fuel management reduces fuel costs and the impact of price volatility by optimizing and directing all fuel management activities - from supplier and distributor selection, demand forecasting and ordering, to dispatching and invoice reconciliation. This article focuses on two key elements that should be of particular interest to public fleets: centralized fuel management and optimized supply decisions.
