3. Why the Double Standard in Fuel Management?

A couple of weeks ago I decided to ask the trucking industry for its attitude towards the biggest influence on their fleet profit margin – their fuel. So I started a discussion in a LinkedIn forum group. The question I put to them was:

“I would like to get your opinions on why fuel in commercial trucking should be so vital to profitability and yet so little seems to be done to measure and control it effectively”.

I’ve been keeping an eye on the result until it seemed sufficient to give a reasonably representative opinion from a small variety of operators in the industry in various parts of the world including Denmark, Philippines, Canada, Zambia, South Africa, Estonia, USA and UK. The response has been quite illuminating although it of course probably has come from those who are perhaps more than typically serious about fuel.

Storage tank operation seems to be reasonably well organised in some places with centralised data management, acknowledgement that fuel temperature and composition are relevant and strategies and equipment being available to largely overcome the potential for thermal expansion losses and uncertainties as the fuel is received from the manufacturer. However, this is by no means ubiquitous with the issues frequently being largely ignored in most places.

However, when it comes to on-vehicle fuel management what they revealed was a mixture of approaches ranging from ‘head in the sand’ failure to address the problem to crude fuel management estimates being performed for the whole fleet on spreadsheets with no attempt from management to pursue efficiency. There is an accusation of “mental inertia” with the fleet operators being accused of not wanting to make the effort to change current practice for something better, despite the potential for increased profit.

We know from the current market that driver training and performance monitoring as a means of reducing fuel cost is popular and commonplace these days. Gadgets with built in displays to guide the driver in minimal fuel consumption driving technique are selling in large numbers. So fleet operators are interested in saving fuel. So why the double standard when it comes to fuel management?

Well, I think maybe I know. Driver performance monitoring works reasonably well  and does not require much effort from the fuel management team. In fact it is easy for them as the gadget does their job for them. The effort comes from the driver as he strives to optimise his technique and the performance of his truck in the knowledge that his employer can in turn monitor him.

However, the fuel manager still only has a general idea of how much fuel is in the tank at any time. How much has actually arrived in the tank during fuelling and how much stays there and for how long is more open to question. And it is a vitally important question as was acknowledged in my forum discussion.

The problem is that monitoring fuel on a truck is difficult if you want accuracy – and accuracy is required because the profit margin is so small. This is why many are spending little effort to monitor fuel on the vehicle despite its importance to profit. Its an almost hopeless task at present. Even small errors in fuel measurement add up to large errors when compared to the vehicle profit margin. This is because not only the volume but also the temperature needs to be recorded and the vehicle’s own fuel gauge is hopeless in both respects. Fleet operator’s management teams are understandably reluctant to roll their sleeves up and make serious attempts to record fuel purchased, corrected for temperature, as the vehicle is basically not equipped for the job.

The answer again is to get the ‘gadget’ (ie our new system – named ‘FMT’) to do it for you; to record the fuel delivery and correct it for temperature, thus giving it the authority of a mass measurement. FMT will repeatedly re-measure it and the volume consumed by the engine, all the while storing the values in memory ready to download to base along with vehicle position and other useful data gained from the vehicle data bus.

The data are then displayed graphically, revealing exactly how much fuel was actually received with each purchase along with time, date and place. You will be able to assess the amount and the supply source with thermal expansion errors and uncertainties removed. You can see at a glance whether the pump over-delivers to your advantage or under-delivers by even a small amount and should be avoided.

There will be no uncertainty over thermal expansion so with repeated use you will be aware of all weather, climate and delivery pump caused variations and be in a position to make rationally based choices of fuel source throughout the year.

You stand to recover the cost in just a few months and of course you will enjoy a level of fuel security not available to you before with freedom from unnoticed spillage, leakage, inefficient usage and theft.

As before, if you are interested in FMT I would love to keep you informed and if you think, as I do, that this will be a commercially very successful product or would like a shareholding in it, then drop me a line at – FMT@bucksnet.co.uk.

Lastly, I invited you in my previous posting to indicate if you control a haulage company and were willing to partner with me in road test of the system in exchange for a free system on your vehicle. I can report now that we have agreed a partnership for the purpose with an international haulage company whose identity will remain secret for the time being. We are still looking to partner with one or two more companies for the sake of testing operation in a variety of contexts. So, please contact me, Ed Jelonek, at the above address if you think you would like to acquire one of our systems in exchange for us monitoring it for a few weeks.

Advertisements

What’s to be Gained from Fuel Management?

Well, after my last post you now know that a new type of fuel management system is being developed here, which means that it will need to be road tested before commercialisation in a few months time. If you are a haulier located in or not too far from Kent and would like a free system for your use with full warranty, in exchange for fitting it to your heavy artic tractor in your workshop, then drop me a line at – FMT@bucksnet.co.uk with your phone number. I will then give you a call to discuss arrangements.

Okay, so you currently run your trucks with GPS and GPRS for track and trace and you have a gizmo to tap into the CAN bus for vehicle data such as distance covered and speed etc. You also get fuel tank contents and total fuel consumed by the engine. And you have driver behaviour monitoring to ensure the fuel is used economically. So you’re covered for fuel monitoring, right?

Well, maybe, but probably not. What you may not be taking into account, rather strangely considering what fuel costs these days, is the accuracy of the data you are getting from the vehicle CAN bus and what its shortcomings are quite possibly costing you. We live in an age when fuel is the single largest cost in running your vehicles but you have not been given an adequate means of controlling it. This is because the kind of device used to measure how much is in your tank was developed to be as low-cost as possible in an age when fuel was cheap and wastage didn’t really matter. It is an approximate indicator of fuel level only and it is typically wrong by up to 15 litres either way. The accumulated uncertainty you are liable to get from your tank gauge over the course of the year, if translated into money, has a value of more than half of your profit margin in running the vehicle. So this fuel could disappear for some otherwise good or bad reason without you knowing for sure that it has happened in the short term. So you can’t keep adequate track of your fuel supply; you have to take the word of your supplier when he says his delivery system is accurate and you have to assume that no-one is helping themselves to any of it. Likewise you have to assume that none is being accidentally spilled due to over-filling and none is leaking away or being burned inefficiently. This despite the fact that we now know that some fuel delivery pumps differ in their outputs by up to about 4.5% without short changing you, ie some over-deliver and you probably don’t know which ones. Some pumps under-deliver, some say, by much more and most certainly do short-change you.

If you run your vehicle throughout the year locally or from west to east and back again in the EU then it encounters a significant variation in seasonal ambient temperature and so does the fuel you are buying. Especially if you include more extreme hot and cold spells in winter and summer. Owing to the thermal expansion rate of fuel the amount you think that you buy and put in your tank throughout the year varies. If you don’t measure the temperature in the tank at the time (and do some arithmetic as well) then you have a grey area of uncertainty over how much you have actually bought throughout the year. Especially if some of it came from above ground storage tanks and some from underground tanks. Taken over the whole year the size of the uncertainty corresponds to a variation of something like 3 percent around the amount of fuel purchased. Not a big deal, you might think, but if you are running a 38 or 44 tonne artic then you have total annual running costs of around £130,000 to cover of which something like £55K is fuel. Fuel costs vary, (mostly upward) but your profit margin is typically only around 5% of running cost in this part of the world. But hang about, this means that this rather small figure of 3% uncertainty in the amount of fuel purchased translates to a whopping uncertainty of around 20-25% in the size of your profit margin (it really is that sensitive). This means that if something untoward was happening when your vehicle was being fuelled at your usual filling station – like the delivery pump was a bit out of spec or maybe you were filling up after a spell of hot summer weather – then your fuel receipt might look OK. And you would never know there was a discrepancy. Do that often enough and it becomes a regular undetected variation in your profit. In fact, all sorts of things could go wrong for your fuel and, providing they did not become as large as the uncertainty then you could never be sure what the problem was or even if there was a problem. Putting it another way, if a number has a degree of uncertainty about its precise value then its real value can be anywhere within the limits of the uncertainty and you would never know what it is.

This is a classic case of the information you need being submerged in the background noise of normal vehicle operation. The temperature of fuel is only one variable of many affecting profitability. So consider how much control you actually have over your profit.

Now consider something even more awful. If your vehicle does not go west to east in the EU but instead goes from far north to south though-out the year, then the ambient temperature range is doubled, and so is the uncertainty with around half of the profit you make lying in a fog of operational uncertainty. Where no real measurements exist of your fuel purchases beyond the receipts or reports you have been given and where temperature, short delivery, spillage, leakage or an inefficient engine may be making off with up to half of your profit margin. Notice I haven’t mentioned theft – how could you accuse anyone in the circumstances with so many other possibilities?

Well, the answer is to measure it, of course. When you fuel up measure the amount you get and its temperature. Then you will know if it is correct and you will see if it is advantageously or adversely affected by its temperature or by the set up of the delivery pump. While away from the filling station continually measure the amount in the tank and compare it with the correct figure for the fuel consumed by the engine so there can be no undetected discrepancies, no matter what other operational variables there are.

Unfortunately, you have nothing reliable enough to measure it with. The fuel consumed figure you get from the vehicle CAN bus is only accurate to within a few percent and the tank fuel level sensor is only a rough indication at best. The tank fuel level measurement typically has an uncertainty of around 30 litres. As the vehicle probably fills up between one hundred and one hundred and twenty times per year (assuming a 44 tonne artic with a single 400 litre tank and 80,000 miles) the accuracy of the total fuel purchased figure is woefully inadequate. So fuel management remains horribly imprecise and security a nightmare with irresistible opportunities for those willing to take the risk of pilfering or fraud.

It has become vitally important to know how much is in the tanks of your vehicles. You have more to gain from identifying and using those precious over-delivering pumps in just a few months than the necessary equipment costs to buy. And that is without considering what you could be losing from under-delivering pumps that you fail to identify. Plus all the losses associated with undiagnosed fuel expansion variation, spillage, leakage, inefficient usage and theft.

Well, as I indicated last time, a system to solve this problem is currently being developed here. It is called FMT and is being produced with some government R&D grant assistance, some future regional growth funding and some private finance. It will be commercialised in a few months time and will save you, the fleet operator, a lot of worry and possibly a lot of money. It has all the benefits of its competitors ie GPS and GPRS for track and trace and CAN bus derived vehicle data plus the accurate fuel measurements you need to manage your business.

All this on top of now being in the know regarding the amount of fuel you buy and where it is going to. What you most certainly will have is the most effective tool available anywhere for managing your fuel and your profits.

It is no longer plausible to say that measuring fuel properly is not cost effective, especially considering that even the vehicle manufacturers are going to the enormous expense of redesigning their engines and control systems to give better fuel consumption. Some are advertising their products using fuel consumption figures to two decimal places and are doing this because they know that their customers are increasingly buying the truck with the best fuel consumption as their first priority, over and above vehicle brand.

As before, if you are interested in FMT I would love to keep you informed and if you think, as I do, that this will be a commercially very successful product or would like a shareholding in it, then drop me a line at – FMT@bucksnet.co.uk.

Alternatively, if you are from the haulage or other automotive industry, have a marketing background and would like to work with me to make this product a worldwide success, then send me, Ed Jelonek, a message and your CV to the above email address.

Lastly, if you are located in or not too far from Kent and would like a free system to install in your heavy artic tractor in exchange for us monitoring its behaviour for a time, then please drop me a line at FMT@bucksnet.co.uk.

Fuel for Thought

The other day it was suggested to me that it was time for me to consider writing down some of the things I have learned over the last decade and a half about vehicle fuel and particularly the kind of fuel that commercial vehicles use.

My background is in designing and manufacturing fuel and oil measurement devices and in my time I have supplied a wide range of sensors and systems for some of the worlds top F1 and World Rally motor racing teams as well as for light and ultralight aircraft and their manufacturers.

These days I am focussing on heavy commercial vehicles where there is a growing need for effective measures of any sort to reduce fuel consumption and wastage. The cost of fuel has long since become the highest single running cost of a heavy commercial vehicle while the profit margin of the vehicle for the haulage operator is only a paltry few percent of the enormous total annual ownership and running cost. The cost of fuel is going up, so the profit for the hard pressed haulier is in danger of coming down and becoming unsustainably low. If this happens then the haulier goes out of business.

This is important because it affects you and me and anyone who goes to the shops to buy goods. Everything you find in the high street (or any other street for that matter) shops has been brought in by trucks of one sort or another. We pay for the delivery cost of these goods when we buy anything and so the cost of what we buy is going up along with the price of fuel on top of all the other fluctuations in the prices of goods.

These days when our economies seem almost to be lying in ruins ordinary people become desperate due to unemployment or just sheer inability to make ends meet. They know that fuel is expensive, so expensive in fact that it is almost a form of liquid cash that can be redeemed easily by selling it to anyone who runs a car. So some few steal fuel and sell it or use it themselves.

If they happen to be truck drivers they may siphon fuel tanks, they may divert fuel into a jerry can when fuelling their vehicle, they may do deals with crooked forecourt owners to overcharge or under-deliver and take a share of the profit. Or, at least the fleet operators think they do because they have a lot of trouble sometimes reconciling their fuel bills with what their vehicle has been doing. So they suspect theft but often cannot be sure, let alone prove it.

The reason they can’t be sure is because the amount of fuel they use in their trucks varies all the time and there are lots of possible causes that are just part and parcel of running a truck and that affect fuel consumption. Things such as tyre pressures, tyre type, road gradient, trailer aerodynamic drag, fairings, air temperature, age and condition of vehicle, make of vehicle, wind, weather and variations in load.

Then there are other factors that they may be less aware of such as fuel temperature variation, which affects the amount of fuel they get for their money. American motorists lose $1.5 billion dollars in the summer paying for fuel which has expanded in the summer heat and which they pay for by the gallon. In the summer each gallon weighs less so they get fewer miles from it. The same problem afflicts Europe, of course, except that fuel costs more here so we lose more.

Then there are fuel pump delivery variations, fuel leakage, fuel overfilling and spillage and on and on.

Fuel delivery pumps are set up by law to have no more than plus or minus half a percent delivery error. However, that that one percent variation is equivalent to around seven percent of the vehicle’s annual profit margin. If only the fleet operator could identify which pumps are giving that extra half a percent then it would really help towards his running costs. Actually, it is worse than that: just today I was reading that the AA have reported that some forecourt pumps over-deliver by up to 4.4%. That would be worth up to a third of a heavy truck’s profit margin if such pumps could be easily identified and regularly used. And then, of course, there are under-delivering fuel pumps, illegal, sometimes dramatically out of spec and easily identified but more often only a little under-performing so that they cost the truck owner and you and me money we would rather keep in our pockets.

Trouble is, no one is selling anything that that a truck owner could use to reliably identify and discriminate between theft and fuel expansion loss. Or leakage, small under or over delivery, small-scale diversion into a container when fuelling or spillage due to overfilling followed by fuel expansion in the tank resulting in overflow. And nothing which could give guidance as to which fuel delivery pumps to use at a forecourt or which secure fuel source or fuel storage tanks will give best value depending on the local environment and recent weather history. Nothing, also, which could keep an eye on and accurately quantify the fuel placed in the tank, corrected for temperature, and so to audit its usage against the fuel used by the engine, allowing nothing to escape or be taken without the operator knowing until it is all used up.

If it could be done then the fleet operator could save a fortune or at least be sure that his vehicles were running honestly and well.

Such a system is currently being developed. It is called FMT and is being produced in my works in Kent, UK, with some government R&D grant assistance, some future regional growth funding and some private finance. It will be commercialised in a few months time and will save you, the fleet operator, a lot of worry and possibly a lot of money.

It’s not on my company website yet but if you are interested I would love to keep you informed and if you think, as I do, that this will be a commercially very successful product or would like a shareholding in it, then drop me a line at – FMT@bucksnet.co.uk.

Alternatively, if you are from the haulage or other automotive industry, have a marketing background and would like to work with me to make this product a worldwide success, then send me, Ed Jelonek, a message and your CV to the above email address.