In today’s thriving economy, it’s a good year to be a fleet manager. Yet, at the same time, fleet managers at transportation companies, as well as at governments providing services like fire protection or mass transit, still face concerns around profitability and maintenance.
Diesel prices hover around $3.35 a gallon—nearly 54 cents a gallon higher than this time last year. These rising prices, combined with the growing pressure to invest in environmentally friendly alternatives fuels and technologies, mean that fleet managers need to find new ways to better manage, if not reduce, fuel spend while still operating efficiently.
While the headlines make exciting promises about what’s around the corner—“Electrically-powered long-haul trucks!” “Delivery vans and municipal vehicles burning clean natural gas!”—the reality may be years away:
- Trucks have a long life cycle, so diesel-powered vehicles in current fleets will still be on the road in 2030 and beyond.
- Fleet owners will need to invest millions of dollars to modify or replace trucks that have internal combustion engines.
- Building the infrastructure to recharge or refuel vehicles running on batteries or alternatives fuels will take decades.
So Many Choices, but What Really Reduces Fuel Spend?
Cutting fuel costs is consistently top of mind for fleet managers at transportation companies and government services, including fire departments, transit authorities, airports, highway maintenance, and sanitation.
In California, the primary market in the United States for alternative fuels for Class 8 trucks and other heavy-duty vehicles, fuel prices are already higher than other states due to taxes and regulations. And forecasts predict prices to reach or exceed $4 per gallon in 2019. California operators should prepare for diesel prices to reach between $6 and $7 per gallon during the next decade.
In addition, California has a new goal of carbon neutrality, in which the state vows to “remove as much carbon dioxide from the atmosphere as it emits” by 2045. How fleets respond is critical because the transportation sector in California is the single biggest contributor of greenhouse gas and nitrogen oxide and diesel particulate matter emissions into the atmosphere.
These environmental and monetary concerns are what’s driving fleet managers in their search for fuel options. The most popular are noted below:
- Rightsizing the fleet to mix in more fuel-efficient trucks
- Converting to alternative fuels such as biodiesel, compressed natural or petroleum gases, and electricity
Both approaches can help fleet managers achieve some of their business or budgetary goals, but they fall short of fully addressing fuel-spend challenges—unless fleet managers also focus on ways to lower the maintenance costs that arise from their fuel choice.