The Fuelcard Company - Jakes de Kock
The cuts announced by George Osborne in the Comprehensive Spending Review will come as no surprise to those in the fleet industry who have been anticipating that the axe will fall.
There was, however, some unexpected good news in the announcement. The Government will invest £30 billion in transport projects over the next four years including major works to expand capacity on the M62 and maintenance works to the M5, M4 and M25. These improvements will be music to the ears of many fleet managers who regularly find their drivers caught in queuing traffic on extremely congested stretches of motorway.
Although it is reassuring to hear the worst of our crumbling infrastructure will be repaired, the cost of using our road network is still very expensive. There was no indication of a fuel tax freeze for commercial drivers in the spending review and the cost of vehicle maintenance is ever growing as trucks bounce in and out of unrepaired potholes. All this means fleet operating costs will remain high.
While very few Government departments have gone unscathed by this latest round of cuts, the fleet sector will feel particularly hard done by after enduring years of fuel tax hikes at the hands of the Treasury. Although it is tempting to stamp our feet and proclaim the injustice of it all, those of us in the fleet sector must now put our heads together and figure out how to manage these cuts without reducing services, or worse, going out of business.
Many businesses will be wondering what else they can possibly cut, having already reduced their operating overheads significantly to pull themselves out of the recession and cope with escalating fuel costs. The answer is managers must go through every area of their business with a fine tooth comb – and perhaps a consoling glass of whisky – to identify where further savings can be made.
It’s more important than ever that fleet managers have a tight rein on their fuel usage as this is one area where significant cutbacks can be made. Investing in the right fuel card will give businesses access to immediate discounts of up to 3ppl on the average price of diesel, which over a year would amount to a saving of £4,909.64 for a 30-strong van fleet. This is a huge saving and could, for many businesses, mean the difference between surviving and not-surviving this round of spending cuts.
Managers should also look at how they can increase their fuel efficiency in terms of routing and driver training. It’s amazing how much fuel – and money – can be saved simply by changing your driving style. Encountering high volumes of traffic and congestion can put the driver under pressure, resulting in defensive driving techniques which can not only be dangerous but actually increase fuel consumption by as much as 40%. Constantly braking too hard, speeding up to overtake at every opportunity and driving at a fast pace means you’re using up more fuel than is necessary.
Having a fuel card can help to identify drivers who are needlessly wasting fuel through inefficient driving as managers can monitor the fuel consumption of individual vehicles as well as the entire fleet. As well as giving an insight into driving styles of specific individuals, this information can also help to identify other areas where savings can be made such as changing the route to avoid a particularly busy stretch of road.
We have yet to hear the full details of the Department for Transport spending cuts and further updates are expected. Although the fleet industry remains one of the toughest sectors in which to operate – and managers will have to tighten up their operations to survive the next few years – we can take some comfort from the planned investment in transport projects. Perhaps the Government is finally starting to hear the message that future economic growth depends on having a stable fleet industry. More surprising things have happened.
Jakes de Kock is Marketing Director at The Fuelcard Company. For further information, visit: www.thefuelcardcompany.co.uk
Published: 28/10/2010
