The rising cost of diesel fuel impacts both businesses and consumers. As diesel fuel costs increase, consumers’ purchasing power decrease. The same is true for businesses. As the costs of on-road diesel fuel and off-road diesel fuel increase, a business is less able to devote resources to increasing employees’ compensation, paying its operating expenses, buying new equipment, and growing its business. So, whether you’re a consumer or a business with a fleet of trucks, machinery, generators or equipment , you have an interest in reducing your cost of fuel. Yet, most businesses have never been challenged to think about their real cost of diesel fuel.
The cost of fuel begins with what you pay at the pump.
It goes without saying that what you pay for fuel at the pump makes a big difference when evaluating your real cost of diesel fuel. Obviously, all other things being equal, its in your interest to reduce the actual price you pay the pump. For consumers, the analysis mostly ends there. But for businesses, there are many other factors which impact the real cost of fuel. Stated another way, the analysis begins with the price you pay at the pump, but it doesn’t end there.
Wasted labor time contributes to the real cost of fuel.
Businesses need to be concerned about employees’ productivity. When a business allocates its most valuable resource, its employees’ time, on necessary but non-value-added tasks, such as fueling vehicles, profit is diminished. Imagine you have a fleet of 30 vehicles that you send to a local gas station to refuel three times per week, resulting in ninety fueling transactions per week. How long do you think it takes your drivers on average to drive to and from the gas station and to fuel the vehicles. Do you think they ever use that time to take a break or to talk with friends or family on the phone? Would it be fair to allocate half an hour to each such fueling episode? No, how about fifteen minutes? At fifteen minutes per fueling transaction, it results in 22.5 wasted labor hours. How much do you pay your drivers per hour after accounting for overtime worked in a given week? $30 per hour? At $30 per hour, you’ve spent an additional $675 on fuel. If each vehicle needed 30 gallons of fuel on each fueling. Its 2700 gallons of fuel. So, you’ve not only paid the gas station owner their price per gallon, but also you’ve spent $675 on 2700 gallons, or an extra .25 per gallon! Wasted labor time contributes to the real cost of fuel.
Additional wear and tear on the trucks also contributes to the real cost of fuel.
Whenever a commercial motor vehicle is driven on the road, there is wear and tear on the truck as well as a need for diesel exhaust fluid, which carries a cost. Most commercial rental companies that are in the business of renting and maintaining trucks apply at least a $.10 per mile charge for maintenance on their vehicles that are leased out under full maintenance leases. How much extra driving is involved when your drivers have to drive to a gas station? Say its five miles per day round trip, per truck, and say that each truck needs to refuel three times per week. For a 30 truck fleet, that means your unnecessarily driving an extra 450 miles per week at $.10 per mile is $45, which adds another $.02 per gallon to the real cost of diesel fuel.
Shrinkage contributes to the real cost of fuel.
Although no one wants to think the worst of their employees, and of course most employees are trustworthy, do you think its possible that an employee would ever allow a friend or family member to fuel-up on their employer’s card? It happens. It’s safe to assume that shrinkage adds at least a few cents per gallon to the real cost of fuel.
Lost productivity means higher capital expenditures and a higher real cost of fuel.
If your losing 22.5 hours of driver productivity per week, that means your making 22.5 hours worth of fewer deliveries out of your existing fleet. Consequently, you need more trucks and drivers to service and grow your business. With supply chains broken and inflation eroding profits, the more you can deliver our of your existing assets and with your existing employee base, the better, right? 22.5 hours of lost productivity is about ½ of a full truck and driver in a normal workweek. How much does a new truck cost, probably more than $100,000, possibly a lot more. And it’s not easy finding good drivers. There’s no doubt that lost productivity associated with refueling carries a real cost.
We can reduce your real cost of fuel
Partnering with Diverse Infrastructure (DI) for your fueling will immediately increase your productivity and reduce your real cost of fuel. Whether you need dyed red diesel for off-road applications such as construction equipment, generators, machinery, rail maintenance, temporary heat or for other uses, or on-road diesel for your truck fleet, we can custom tailor a program to meet your needs. For decades, DI’s management team has worked with construction companies, general contractors, subcontractors, restoration companies and transportation, distribution and logistics companies to meet their on-site fueling requirements. With our curated, vetted, nationwide network of fuel delivery partners, we can ensure that you’ll have fuel where you need it, when you need it. Also, Diverse Infrastructure is a woman-owned business, which can help you meet your contractually mandated, and internal, diverse spend objectives.
Stop leaving money on the table while your teams wait in fuel lines. Call a fuel management specialist at DI for more details.