The falling price of crude oil is finally trickling through to businesses and consumers, with supermarkets cutting fuel prices to an all-time five year low. Over the course of a year, this price drop should mean every road user will feel a little better off, but for vehicle reliant businesses – especially those in the retail sector – the falling cost of fuel could have a major positive impact. The freeing up of cash within businesses, means more capital is available to invest back into an organisation, says Northgate Vehicle Hire
So why have crude oil prices fallen so much in such a short amount of time?
As with most things, it comes down to a simple question of supply and demand. Stalling growth in the world’s emerging economies has caused demand to slump well below predictions, while the US has boosted supply by ramping up production.
For businesses where being on the road is critical to their business operations, oil prices staying low is a real positive. Annual fuel spend for some businesses can be significant. For example, Pimlico Plumbers – the UK’s biggest independent plumbing company – still spends around £1m per year on fuel. Businesses keen to improve profitability could look at further ways to cut fuel spend by introducing measures that reduce fuel consumption.
As the market leader in light commercial vehicle hire – working with thousands of retail business across the UK, we know that that fuel cost is a big issue and so to help businesses on their way we’d like to share some tips for improving fuel efficiency.
Regular inspections will not only give you peace of mind that your drivers are safe on the road, but will also deliver better miles per gallon, meaning lower fuel consumption. Simple maintenance tasks you can perform on your own include checking tyre pressure, reapplying lubricant, changing the air and fuel filters, bleeding the fuel system and draining the water separators. These also help to ensure your car remains fuel efficient and small savings can add up across a year.
Run a younger fleet
Modern vehicles are becoming more and more efficient, so the younger your fleet is, the less fuel your vehicles are likely to consume. Businesses should consider the cost of upgrading versus the amount of fuel they are likely to save from investing in a younger fleet. Introducing new vehicles is also likely to improve reliability and minimise downtime – an additional operational and financial benefit that every vehicle-dependent business should prioritise.
Lose weight and be smooth
More weight or more wind resistance means more fuel consumption. To make your vehicle more efficient, avoid carrying unnecessary cargo and remove anything that could make your vehicle less aerodynamic (i.e. bike racks, roof racks, flags). You’d be surprised at the impact these little things have on profit margins over the course of a year.
Driver training can massively improve fuel expenditure by encouraging more fuel-efficient driver behaviour. Aggressive driving isn’t just a risk management issue. Harsh breaking, overusing air-con, stop-start driving and even just forgetting to plan a route can really ramp up fuel consumption.
Making positive changes can be simpler than you think. With a fresh approach, you’ll notice a difference immediately. In the short term, just improving maintenance, driver behaviour and journey efficiency can help to slash costs. Looking long-term, it might be time to start thinking about upgrading your fleet; newer vehicles are more fuel efficient, safer and more reliable on the road.
At Northgate Vehicle Hire, we operate over 62,000 state-of-the-art vehicles on rental through 73 locations – providing businesses with well-maintained fleet solutions that can have a substantial impact on the bottom line.