In April 2008, Americans logged 1.4 billion fewer driving miles compared to the same month in 2007. The cause is undeniably the cost of fuel. Hovering as a concern for years, crude oil prices are driving costs for everything up exponentially. Vending operators are hit especially hard due to manufacturer price increases and their own transport costs. It’s forced many operators to take serious stock of strategies to stay in the black.
There are no fast and easy fuel saving options. Many operators are cutting routes or minimizing service calls. Other operators are investing in technology that promises to increase efficiencies, thereby reducing fuel usage. Remote machine monitoring, computer software on truck engines and global positioning systems are all being considered and installed by more and more operators. Most operators find they must do a number of things that affect their fuel economy in order to improve their bottom line.
Cut Miles Logged
The most obvious way to handle increased fuel costs is to drive less. Dave Steinbach, president, Empire Vending, Liberty Lake, Wash., is planning to eliminate a route in order to save fuel. By cutting a truck, and unfortunately an employee, he can have fewer vehicles on the road. The route will be divided and added to other existing routes.
In conjunction with the route reorganization, Steinbach plans to reduce the number of times he visits accounts, going to a 4-day work week. He’s also looking at doubling up on best sellers to avoid empty spirals. “If an account you were servicing three days a week runs out of Cheetos,” said Steinbach, “then put two spirals of Cheetos in the machine and service it two times a week instead.”
John Elliott, president of Elliot’s Canteen Services, Decatur, Ill. has also cut his miles down. Elliott reorganized his route schedule to eliminate a day’s worth of deliveries. He has increased equipment and, in many cases, upgraded equipment. He’s worked with bottlers, specifically Pepsi, to swap out machines for larger capacity models in order to hold more of the products that were previously selling out. Due to larger and more beverage equipment, the machines don’t sell out as quickly, allowing him to eliminate daily service at certain accounts.
Drivers Prefer a Shorter Work Week
On 13 of his 14 routes, drivers work a slightly longer shift four days instead of five days a week. “The guys are pretty appreciative,” said Elliott. The drivers are told that if they do the job they’re supposed to do in the four days they’re scheduled to work, then they’re assured the fifth day off. Elliott has retained the right to call them in by 8 a.m. on the fifth day for emergencies or if they haven’t completed their work. He also staggers the drivers’ days off, so not all drivers are off on the same day. Additionally, Elliott avoids giving his drivers Monday or Friday off, as this would require a floater to cover too many accounts. “I felt a 3-day gap is stretching some of those capacities,” said Elliott. “It just didn’t appear to work.”
Drivers are paid the same 5-day base salary and commissions. The fuel savings comes from the more distant accounts. Drivers don’t have to make separate trips for these accounts, since they are already nearer when servicing other accounts.
Elliott has one driver who has elected to keep a 5-day work week because he’d have too long a shift fitting it into four days.
Before implementing the shorter work week, fuel was running Elliott $15,000 to $17,000 more than the previous year. With this new work schedule, he expects 15 to 20 percent fuel savings. Currently, it’s too early to tell if his estimates will be accurate.
Some may see eliminating service calls as compromising customer service. The driver being in the account less often risks the perception of a decrease in the level of attention the account is getting. Elliott, however, hasn’t noticed any such response. “Clients recognize we have additional costs and are amenable,” he said. He has even mentioned price increases, and clients haven’t balked.
In certain high volume accounts that need daily service, Elliott staggers the drivers so there is someone at the account each day, although it’s not the same driver.
Reducing truck Weight Makes a Difference
Elliott has also reduced the size of his maintenance and supervisor vehicles from eight to four cylinders. He is experimenting with different vehicles, such as vans versus small pickup trucks.
He has also reduced parts carried on the maintenance vehicles. “It was burning up a lot of fuel,” said Elliott. It was a 6- to 8-month process to reorganize the maintenance vehicles. Elliott took his time doing it, but feels confident maintenance now carries only items needed 80 percent of the time.
Remote machine Monitoring offers a solution
Knowing when and how much to service routes is a key strategy to saving route costs. Remote machine monitoring software is a technology that can support this strategy.
Elliott, who is presently using handhelds, likes the idea of being able to see what and when machines are out of product. Remote machine monitoring will be a different way of servicing accounts, said Elliott. What’s holding him back is the ongoing monthly fee per machine. “It’s an added expense,” he said. He’s working with Cantaloupe to come up with a return on investment study and plans to talk with operators already using it.
Ralph Sanese, president of Sanese Services Inc. in Columbus, Ohio, has done a number of things to cut fuel costs.
Sanese introduced remote machine monitoring technology with Michelina’s frozen food machines for home meal replacement several years ago. He now uses remote monitoring via his credit card system; USA Technologies. He’s also testing Quickstore24, a glassfront machine with remote machine monitoring and various payment options. Automatic Merchandiser reported on Quickstore24 in its January 2008 issue.
“Remote monitoring will absolutely save fuel,” Sanese said. “You can really route trucks where you need them to go.”
Investing in vehicles
A new step in Sanese’s efforts to save fuel is a move toward more economical vehicles. “Anytime we purchase a new truck,” said Sanese, “it must get 40 percent more fuel economy than the vehicle we’re replacing.”
Getting more fuel economy might mean a less powerful engine or purchasing a vehicle with newer diesel and gas systems that increase miles per gallon. This, used in conjunction with other techniques, can produce significant results. Sanese said he’s already cut his fuel usage by 2,000 gallons a month.
Truck maintenance improves mileage
Sanese also introduced vehicle maintenance practices, such as maintaining tire pressure weekly. “We’re reaping a saving of 6 percent for fuel usage,” said Sanese. He’s also focusing on driving style. “We already train for safety, so now we’re incorporating techniques for fuel economy.” The training will address sensible driving techniques, such as no “hot rodding” or rapid acceleration.
Controlling speed is another way to save on fuel. Sanese installed governors — devices used to measure and regulate the speed of a vehicle — on his largest trucks, so the drivers can only go as fast as 57 miles per hour. “The fuel you consume increasing speed from 57 to 65 miles per hour is enormous,” he said. He’s also purchasing a program for “dyno tuning” his service vehicles.
“Dyno tuning” involves measuring and adjusting the combustion system to maximize vehicle performance, including fuel economy. This can be down via the vehicle’s computer.
Sanese has also reaped savings with global positioning systems (GPS) since the technology allows him to efficiently map out routes.
GPS systems save fuel by showing the operator unauthorized stops and how fast drivers are driving, as well as making it easier to determine the most efficient routes.
However, Sanese believes GPS systems are more beneficial in loss prevention. “I think there’s more low hanging fruit for fuel savings than GPS systems,” said Sanese. He suggested focusing on equipment that burns less fuel. “You can’t change all your equipment overnight, but every replacement should be an improvement,” he said.
Operators have also looked at changing fuels. Before diesel was as expensive or more expensive than gasoline, operators were looking at converting their fleets to diesel. Many have halted those plans due to cost.
One alternative is biodiesel, defined as a clean burning alternative fuel, produced from domestic, renewable oil resources. It contains no petroleum, but can be blended at any level with petroleum diesel to create a biodiesel blend. More information is available online at biodiesel.org.
When blended with diesel fuel, it adds lubricity and reduces harmful emissions, although it is not always cheaper.
FreshDirect, a New York City food delivery company, donates cooking oil from its kitchen to New York City-based Tri-State Biodiesel. Tri-State Biodiesel blends it with diesel and provides FreshDirect with a blend to run the delivery trucks.
Certain news reports blame biodiesel for increased food costs, but biodiesel, unlike the enthanol added to gasoline, can be made with non-food products such as reused vegetable oils. For more information on biodiesel or other fleet fuel saving technologies, browse Fuel Advantage magazine at fuelpub.com.
A vending operator who wished to remain anonymous reported using cooking oil (not a biodiesel blend) to power some of his vehicles.
More companies are charging a fuel surcharge than ever before. The 2008 Automatic Merchandiser State of the OCS Industry Report, published in July, noted 30 percent of OCS operators were charging a fuel surcharge. Traditionally, vending operators didn’t feel they could add a fuel surcharge, but that’s changing.
Several vending operators who did not want to be identified reported using fuel surcharges. They said they have found it a good alternative to raising product prices. It is possible to simply deduct the charge from commissions in accounts that get commissions.
FreshDirect, a grocery delivery company, charges a fee based on the average retail price of gasoline in their area (published by the Department of Energy). For $3.00 a gallon or more, the fee is $.79. On its Website, the fee is explained: “The fuel surcharge helps cover not merely the increased cost of making deliveries to our customers, but also broad increases in commodity and utility prices that directly effect running — and refrigerating — our facility.”
There’s no fast and easy way for vending operators to save money on fuel. Investing in equipment and designating time to analyze savings possibilities is more important than ever. Product price increases due to added fuel costs and technology investments are inevitable. Communicating with location managers will soften the blow.
BEWARE OF FUEL SAVING SCAMS
When adding technology to vehicles to save gas, beware of gimmicks. In a Wall Street Journal article titled “Do Fuel-Saving Gadgets Take You for a Ride?” author Jonathan Welsh reports that fuel savings kits, like fans to swirl air before combustion or inject material into fuel lines, have no governmental backing. The Environmental Protection Agency and the Federal Trade Commission said these products don’t generally improve fuel efficiency. Manufacturers of such products claimed the government only tested products that didn’t work.
One technology that got anecdotal support in the article was the ScanGauge II (www.scangauge.com). A device that plugs into the OBDII connector inside a vehicle, the ScanGaugeII monitors miles per gallon in real time based on engine information. The rate value goes up and down as the driver drives, giving feedback as how to maximize fuel usage. It shows fuel per trip, per tank and allows the fleet manager to compare routes for fuel economy.
Fuel saving actions and the savings they can provide:
Avoid Aggressive driving
- Prevent rapid acceleration
- Eliminate hard braking
- Use cruise control on relatively flat roads
- Use overdrive gears
= 5-33% savings in fuel
- Speeds over 55 to 60 miles per hour are less efficient
= 7-23% savings in fuel
Reduce Truck weight
- Pare down weight with lighter shelving and fewer products or equipment
= decrease of 100 lbs. equals 2% savings in fuel
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