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Depending on your fleet size and usage, you could save a significant amount of money by using fuel bunkering, as well as benefiting from a better flow of information.
If yours is a fleet of between six and eight 38-tonners regularly refuelling at retail prices, the average monthly consumption of fuel makes the use of a bunkering service look worthwhile.
You negotiate the delivered price per litre, pay a handling charge for each litre drawn and your drivers can pick up fuel at a wide number of sites around the country. You, meanwhile, receive regular print-outs detailing the transactions and fuel per vehicle drawn.
Alternatively, if they are really running up the mileage and returning to base, a tank of your own could be the solution for you. By the time the fleet numbers 15 or so, a tank is a very likely option—provided your vehicles are not spending three or four nights a week away. But what are the environmental risks of installing your own system, and what risks might you be exposing your business to?
The immediate benefits of installation include convenience, real savings per litre on fuel, and access to comprehensive data about fuel consumption. However, according to Jason Hodge, many operators ignore the reports. Hodge is business development manager at Walsall-based provider CH Jones, a former haulage firm that entered the bunkering network business almost 20 years ago when it realised there was more to be made from providing the fuel than delivering it. "There is a large proportion of operators who never even look at the reports," he says. "They don't think they have the time to do it."
Moreover, Hodge also believes there are thousands of depot-based installations likely to pose a risk to the environment. 'There are tanks out there which are up on pallets, with no bund walls (the retaining walls which catch any spillage) to prevent a disaster in the event of tank damage or leakages,' he explains.
Accidental spillage
Leakage could mean disaster from a number of points of view. Last year a Crewe-based operator was fined £5,000 for an accidental spillage and a further £37,000 for the cleanup bill. And last December large areas of the city of Glasgow had their water supplies cut off following a large diesel spillage.
Even a magistrates court can impose a maximum fine of £20,000, and should you find yourself facing prosecution in the Crown Court, the fines are unlimited. So a carefully managed fuelling system is certainly a worthwhile investment. Milton Keynes logistics specialist City Truck realised almost two years ago that it needed to become more professional about fuel management. UK operations manager Phil Constable describes an alltoo-familiar incident: "We had three depots, all with different fuel systems, and the drivers all had a Keyfuels card for refuelling up the road. If a vehicle came into the yard to refuel from another depot, things became complicated. [fit was after 18:00hrs or over the weekend, it was even more so."
Through Keyfuels, the CH Jones bunkering service, City Truck introduced ICR 100 automatic card readers and fuel monitoring systems at each site. Fuel drawing details and authorisations can be
transferred between sites. "All of a sudden there was a single system which linked all the depots," says Constable. "With one swipe, any driver could draw fuel from any depot or any Keyfuels site around, and by the following week we had it on a print-out."
The trouble with print-outs is that too many operators ignore them, says Jason Elodge. That means they are also ignoring the warning signs. "If you have a fleet of vehicles which have an average tank capacity of 100 litres, for example, you would want to know if one of those vehicles was regularly drawing 110," he points out.
A comprehensive bunkering service such as Keyfuels can provide operators with exception reporting. It provides reports on the drawings and consumption figures which are exceptions to the norm—the ones with the potential problems.
Different sources
Difficulties tend to arise when mpg figures have to be calculated from reports received by different sources. At City Truck the ICR 100 systems solved this at a stroke. "The reports all come from Keyfuels and we now have the Fuelscope software to take it on disk," says Constable. "It tells us if any of the vehicles are consuming anything outside the 7.5 to 8.5 miles per gallon average we set. We can work out if it's a problem caused by the route planning, vehicle maintenance or maybe the driver."
With 300-plus vehicles and existing installations at each site, the move to a more comprehensive monitoring system made sense for City Truck. However, a long-haul fleet of around 15 vehicles could expect the same relative benefits. If the drivers refuel locally, a regular number of subcontractors are employed or there are ambitions to expand the fleet, a tank of your own could make sense.
According to Christine Ecob at the Environmental Agency, the first step when considering a new installation is to check if you are allowed to install one, and to get planning permission. Then you should contact the EA local office for advice. A simple faxback service will provide you with site and equipment specifications, including bund wall requirements which will vary according to the average rainfall in your area. Bund walls are now obligatory on new installations and should be considered essential on existing ones. However, the EA has no list of approved system suppliers, so you'll have to find your own. CH Jones is one of the suppliers which can provide operators with an environmental audit to keep you on the right track. its service covers more than 250 points which will help determine the risk posed by an existing fuel installation. The company can also install a new system.
That investment might seem prohibitive when weighed against investment in new vehicles, so you'll need to have stronger motives than mere convenience.
In addition to pumps and monitoring equipment or any civil works required, there are additional costs to consider. These include delivery to your site, the cost of stock holding and loss, as well as administration. Then there is the exposure to theft and those other environmental risks associated with leaks.
Other operators
However, in addition to the benefits at City Truck, you could also sell fuel to your subcontractors or other operators in the area, if the equipment is approved and calibrated to meet the requirements of the Weights and Measures Act (1985).
This equipment will add to your installation costs. Hodge believes that a large number of operators are breaking these rules by providing fuel to their subcontractors without the necessary calibration. He says that even the security of the ICR 100 is not approved for re-selling fuel, although CH Jones does expect to have a low-cost approved option available by the end of the year.
Re-selling fuel is not simply an additional revenue earner; it can also help build loyalty among your subcontractors by providing them with preferential rates. The alternative is to provide them with an authorised fuel card through your bunkering system and deduct the fuel from their revenue earned.
Basic security
However, Hodge warns that too many operators ignore basic security rules with regard to fuel cards.
"They often don't see them as being as valuable as a credit card, or give them to agency drivers willy-nilly without asking for them back," he says.
The clear message is that, just like your haulage operation, your fuel supply must be carefully managed. Using a bunkering system offers fuel on presentation of the appropriate card, but if you want precise monitoring you'll need your own tank system too.
Whichever route you choose, if you fail to monitor the amounts of fuel drawn or the precise consumption of the fleet, vehicle by vehicle, your losses could outweigh any benefits you enjoy.
ElI by Steve McQueen
Contacts
Environment Agency list of offices: 0645 333111.
EA fuel installation Faxback Service: 0118 9535419.
Costs and benefits
On-site tank costs include: • Allocated space • Investment in tanks, pumps and monitoring equipment • Delivery to site • Site stock holding • Stock loss potential • Administration • Calibration (if for re-sale) • Possible theft/spillage • Eventual disposal costs
On-site tank benefits include:
• Full management control • Lower cost per litre • Potential for improved fuel analysis/ economy • Card security • 24-hour refuelling • Sales opportunities (with correct equipment) • Added value service to subcontractors, increasing loyalty • Practical convenience Bunkering costs and benefits Costs: • Stock holding • Delivery to network • Handling charge per litre Benefits: • Known price per litre • Card security • UK-wide availability of sites • Fuel consumption reporting • User authorisation system