An important component of fleet fuel management involves planning for unexpected fuel price hikes. In these instances, route planning software is particularly helpful in easing the blow to profitability and profit margins.
As an example, let’s look at how the 2017 hurricane season affected gas prices, particularly when Hurricane Harvey hit Houston (a major fuel processing location). According to information released by JBC Energy and Goldman Sachs, short-term shutdowns at gasoline refineries in that area reduced the United States’ refining capacity by 10%. As a result, industry experts are projecting that U.S. drivers will likely see gas prices increase by up to 25 cents per gallon.
A GasBuddy.com analyst projected that Hurricane Harvey will result in increases of 10-25 cents per gallon in the Gulf Coast region and the upper Midwest. The northeastern United States will see gas price increases of 10-20 cents per gallon, with increases of 5-15 cents per gallon in the plains states, the Rocky Mountain states, and the West Coast.
In addition to reducing refining capacity, Hurricane Harvey also resulted in decreases in drilling and production of crude oil, by 380,000 barrels per DAY. This temporary drop in production also contributed to increases in the global price of oil, and the cost of gas to power fleets of all sizes.
Route Planning Software Improves Fleet Fuel Management, Rain or Shine
While the effects of Hurricane Harvey will eventually dissipate, unexpected increases in fuel costs (for whatever reason) can really hit a small to mid-sized fleet hard, especially in industries where profit margins are already in the single digits.
Given that the biggest cost of operating a fleet is fuel, (60% of fleet operating costs), affordable route planning software that consistently reduces fuel costs can really save the day…and the bottom line.
Let’s take a look at how and why this occurs. A route planning software tool like RouteSavvy costs less than $25 per month. For that very modest investment, many businesses with small to mid-sized fleets are saving a minimum of $5,000 per year, and often times, much more.
While some of the savings come from saving time for the office staff, the bulk of the savings from using route planning software are in reduced fuel costs because of more efficient routing.
As businesses, organizations & non-profits with small to mid-sized fleets rack up savings, they can be setting some of it aside to account for unexpected increases in gas prices. Even when those gas price hikes are temporary, it can really carve a big chunk out of a company’s operating profits. Consistent savings in fuel costs from route planning software can help mitigate that.
Because of the increasing severity of storms during hurricane season, turbulence in the Middle East, and oil producing countries that lower production to raise prices, we will continue to see unexpected price hikes in crude oil and gas that affect the bottom lines of small to mid-sized fleets.
For those involved in fleet fuel management, route planning software is literally your best friend, by saving time, and by saving money that can be set aside to offset the impact of unexpected gas price hikes.
If you haven’t yet tried RouteSavvy route planning software and seen how it saves money first hand, try our Free 14-day Trial!
