As May turns to June, a nation of summer drivers rejoices in the recent slide of gas prices from $3.98 per gallon at the beginning of May to $3.78 per gallon at the end of the month.
Ok, maybe “rejoices” is a bit strong. But there is a palpable sense of relief that the near daily increase in fuel prices seen since late 2010 has abated a bit. The U.S Energy Information Administration (EIA) has even lowered its forecasted average price of gas this summer by 5 cents per gallon since last month. So is this all cause for celebration?
Unlikely, rather, it is time for companies to roll up their sleeves and push themselves even more to reduce fuel consumption in their fleets. Action today, as most companies are in the process of finalizing their vehicle purchases for the coming year, will help them build a better fleet to withstand a future of higher fuel prices and enable emissions reductions in the process.
For inspiration, companies can look to the actions of three of the nation’s largest fleets, Progressive Insurance, Cox Communications and Frito Lay. These three companies, with very different types of fleets, were profiled in a recent Smart Business series that highlighted green fleet success stories.
Cox Communications' efforts, led by Mark Leuenberger, have seen great success in reducing idling by as much as 84 percent. They also reduced mileage 15 percent by deploying a new routing system. The efficiencies gained by these steps enabled Cox to “reduced the overall fleet size by about 400 vehicles.” All told, Smart Business reported that “Cox was able to reduce its fuel consumption about 8 percent.” At a time of $3.78 a gallon fuel, eight percent over 10,000 plus vehicles adds up to a couple million in savings very quickly.
Progressive took steps to right-size their vehicles starting in 2008. At the start, many of the 3,000 vehicles used by the claims department were six-cylinder Ford Explorers. Wanda Shippy, Progressive’s social responsibility manager, and Kathy Schulz, Progressive’s manager of travel and fleet operations, “decided to replace the Explorers with (Ford) Escapes.” These new vehicles accounted for around 41 percent of the claims department fleet at the end of 2010, according to Smart Business.
Downsizing models from Ford Explorers to Ford Escapes likely resulted in a 44% increase in fuel efficiency for the 1,200-plus vehicles that were part of the change. Assuming industry standard for mileage (approximately 20,000 miles per year), this simple change will likely save the company over $1.5 million in fuel expense this year while also cutting carbon emissions by over 4,000 metric tons.
In a third Smart Business article, Mike McConnell of Frito Lay, noted that “there is not one size that fits all to improve the fuel economy and sustainability of a fleet.” Frito Lay has identified electric vehicles for routes that are 100 miles or less as a key solution for their fleet. The article mentioned, “While there is an increased ticket price for the vehicles themselves, they can eliminate all the fossil fuel associated with the vehicle, and then the cost difference between electricity and diesel creates a significant pay back on that investment — the company reduced its fuel consumption by 8 percent and grew the business.”
By proactively taking action several years ago, each of these three companies positioned themselves to be better able to withstand current fuel prices and have a better environmental footprint. The extent to which current high fuel prices motivate others to follow the action of these leading companies will determine whether or not we will have a cause for celebration in the coming years.