Fuel prices are slightly low currently, but simply because prices are down now does not mean that they will stay low forever. Wars, natural disasters, and tightened supplies can drive up the price of oil, and therefore gasoline and diesel, to unprecedented heights. It is important to know how to buy bulk fuel the smart way, so higher prices will not affect you or your operations.
Effective fuel management
Effective fuel management isn’t solely the job of a fuel manager. Everyone from trucking operations to accountants and management is involved in ensuring that all fuels are used wisely. You may not even have a large enough fleet to hire a full-time manager. You must instill smartfuel practices across your company so that everyone can know how to use their fuel conservatively.
The basics of using fuel the right way
Effective fuel management concerns two primary goals. First, you must minimize fleet fuel costs and, second, you should provide drivers with the fueling facilities to get their jobs done efficiently. You cannot focus on price and forget your drivers, who need quality facilities. When your company focuses on price alone, you risk losing good employees.
Purchasing this product isn’t a one-time action. You or your team need to constantly call truck stops and chains to negotiate prices, rebates, and discounts. You need to monitor price fluctuations and stay current on policy changes. You also need to contact your drivers and encourage them to take part as well. Drivers are great resources that can provide you with the best, most up to date information. Effective fuel management depends on the cooperation and engagement of all involved.
The fuel manager’s job
You may not need a full-time fuel manager, but you do need someone in overall operational control. The manager is the point of contact for all fuel-related matters. They handle purchasing, analyze the market, create long-term planning, and implement plans. They are the point of contact for drivers who have questions and liaisons for suppliers and vendors.
Your manager should have basic financial literacy and be able to read a spreadsheet, fuel calculators, market projections, and other similar information. For example, the price at the pump is not an accurate reflection of actual market prices. The pump price includes taxes and fees tacked on by truck stops. The manager must be able to separate and identify the true fuel costs that enable them to compare stops within the states accurately.
Fuel managers must be good communicators and negotiators. Therefore, they must speak well and negotiate hard. They are the key person for driving down costs and keeping everyone informed on fuel policy.
The purchase network
Since you cannot control costs if drivers buy their fuel from anyone, you need to set up a limited purchase network. The limited purchase network benefits you in two ways. First, it ensures your drivers are getting the lowest possible price. Second, it allows you to concentrate volume, which means you can negotiate more discounts or rebates.
The network is composed of primary stops and supplementary stops. The primary stops should be located either 200, 400, or 800 miles apart from one another. The industry standard is around 400 miles of separation. However, some carriers opt for 200 miles, which nearly guarantees nationwide coverage with about 200 locations.
The big caveat to a network is you need to get your drivers onboard. Your drivers need to know the locations and know that they are expected to stop at them. That means you need to survey them and ask their opinion on the stops regarding amenities they need, service, and quality. Your drivers need to be willing participants, or the entire process breaks down.
Buying bulk fuel
Buying bulk fuel can save your company and employees both time and money in the long run. This is great option for those who operate in a smaller area or in one location. Buying diesel fuel from a reputable wholesale dealer also means you can get related services, like fuel delivery and tank rentals. For your manager, the benefits include dealing with one vendor, rather than constantly focusing on contacting many.
Get high-quality fuel and services with Kendrick Oil
At Kendrick Oil, we carry a broad array of fuels at wholesale prices. If you’re looking to implement a fuel purchasing strategy, consider including Kendrick Oil as one of your vendors. We offer onsite fuel delivery, tank rentals, and contract options to better serve you. If you would like to learn more about our Products and Services, give us a call at 1 (800) 299-3991 or Contact Us by email. We have locations in Oklahoma, Texas, New Mexico, Louisiana, Colorado, and Kansas.