19 Aug Fuel Management on Any Budget
Originally posted by Thi Dao on http://www.government-fleet.com
There are numerous news stories about “missing” fuel at public agency fueling sites. Whether this fuel is not adequately tracked or there is actually theft involved, the fleet manager will most likely be asked about it. And with unleaded gasoline and diesel fuel costing approximately $3-$4 per gallon, coupled with the large quantity each agency uses, the cost of this unaccounted-for fuel can be significant.
Some say they don’t have the funding to upgrade to an automated fuel management system, but fleet managers and fuel management providers say with the benefits of automating fuel management and the risks of unaccounted-for fuel, you can’t afford to not have an automated system. This is especially true for fleets that rely on odometer entry for preventive maintenance (PM) cycles. Fleet managers stress that automated fueling systems have greatly benefitted their PM programs, and wrong entries can confuse an entire cycle, cause over- or under-maintenance, or just waste time.
There are various levels of automation. Of course, the more automated a system — and the more you can control — the more it will cost. The solution lies in finding the balance between budget and automation. Fleets can go up one level of automation from their current system for more control. If they have multiple fueling sites, they can purchase fuel control systems for their most trafficked locations. They can also can take the route some fleets have taken and recommend — a slow high-tech upgrade. Via this method, fleets can begin with a combination of manual odometer entry and automated odometer tracking systems, with plans to go fully automated as they can budget funding across future years.
From Limited to Full Automation
The very manual method of clipboard-and-honor-system still exists — the risks of which are numerous. And while upgrading to a completely automated fuel management system may not be feasible for some fleets, there are numerous variations of automation a fleet manager can look to in order to increase fuel accounting and management.
A base fuel management system could be a stand-alone system designed for one or two hoses where stored data can be retrieved manually with a USB stick and viewed via Excel. This type of system, according to Orlando Hernandez, product manager, Fuel Control, OPW Fuel Management Systems, would serve a very niche market, such as a marina, where there is an above-ground fuel system and up to 250 or so users.
It’s for “people just looking to get rid of the pad and pen or the manual entry and do the bare minimum, just put it on an electronic file and open it up in Excel,” he said. “Everything’s menu-driven from the terminal — there’s no software.”
Russ Whelan, southwest regional sales manager for Syn-Tech Systems, parent company of the FuelMaster product, said the most common fuel management system he sees is a card lock system, where a driver inserts a key or card, or swipes a fob, and inputs odometer information. The information is sent to accompanying software for tracking fuel use and odometer inputs.
A higher-end system might provide more access capability or read credit cards. It can also be used to program specific controls, such as how much fuel can be dispensed to a certain vehicle type, or an odometer range for fueling to ensure more accurate odometer inputs by drivers.
An add-on product can provide more security — an RFID tag or ring that recognizes which vehicle is being fueled. A hose module detects a tag or ring connected to the vehicle, reading the vehicle identification number before allowing for fueling, Mike Wade, director of business development for E.J. Ward, said.
The most technologically-advanced add-ons to a fuel management system connect to a vehicle’s OBDII port, not only automatically pulling the odometer information to ensure accurate reporting, but also pulling trouble codes, idling time, maximum speeds, and engine time. Oftentimes, vehicles don’t even have to be fueling for data to download — they can just drive near an antennae or a terminal for the information to be sent to the software.
Most fuel management systems will work with many types of fuel and other liquids. This means the systems can track, in addition to gasoline and diesel, compressed natural gas (CNG), biodiesel, propane, ethanol fuels, diesel exhaust fluid (DEF), antifreeze, oil, lubricants, etc.
These are just a few offerings available in hardware. Each provider has its own range of products to offer, and there is often software to purchase and installation costs to consider — which can increase significantly if the location doesn’t already have communications systems in place. Fuel terminal cost can start in the low thousands per unit for very base models and increase depending on functions. Fleets may need to purchase software separately. Additional vehicle products can cost a few hundred each. Fleets may need to think about software upgrades as they become available. Then there are card readers, cards, fobs, and encoders to consider.
Just like any purchase, the fleet manager has to consider the pros and cons and work within a budget. If costs for a fuel system seem overwhelming, consider the benefits as well: better tracking and accounting, a more accurate PM program, preventing fuel misuse, and freeing up staff time previously taken up by reconciliation for other tasks.
Tracking & Accounting
Fleet managers agree tracking how much and to which vehicle a driver dispenses fuel is essential. Both Erik Gustafson, fleet manager for the City of Chico, Calif., and Doug Weichman, CAFM, fleet management division director, Palm Beach County, Fla., have a combination of the card lock fuel management system and the in-vehicle automated fuel tracking system in their fleets. They both discussed the difficulty keeping records when drivers use one card to fuel multiple cars.
With no controls or limits to tie one transaction to that one car, drivers could hand off the nozzle to the next person in line, which often happened, Gustafson said. While this might all get billed to the same department, one car would be recorded as getting 60 gallons of gas, with an average fuel economy of 2 mpg, while the other on paper showed getting no gas and achieving a fuel economy of 50 mpg.
Weichman said while there is no malicious intent from the driver, “your whole record system gets messed up because now that fuel is charged to the other vehicle, so that adds into the cost of that vehicle,” he said. This makes it hard to calculate miles per gallon. A more automated system also allows fleet managers to determine why a vehicle’s mpg is so much lower than his or her colleagues with similar vehicles.
Weichman has the driver input both employee identification information and vehicle information for added security.
“We want to know the employee too, because sometimes it’s a pool car, sometimes it’s vehicles that multiple employees will use. We want to track it down to the employee and vehicle per transaction, where we can see site, time of day, how many gallons, what pump he was using,” he said.
Accurate record-keeping of which vehicles and individuals fuel up also allows the fleet division to bill user departments for fuel use, Weichman added.
Reporting Exceptions & Stopping Theft
At Palm Beach County, the automated fuel management system at the County’s 15 fueling sites has helped reduce fuel theft and catch anomalies in record keeping. Weichman said the County dispenses six million gallons of fuel per year — two million gallons of diesel and four million of gasoline. The sheer amount of fuel makes it hard for him to imagine working without some sort of automated system.
“Out of six million gallons, we probably have a variation of only couple of percent, if that, throughout the year on the amount of product we buy to the amount of product we distribute,” Weichman said. For fleets without a strong tracking system, he’s seen this variation to be as high as a 25% difference.
Accurate record-keeping is key for Weichman, and he pulls exception reports monthly for incidents such as weekend and off-hours fueling for non-emergency services staff who do not usually work at these hours.
Weichman recalled an incident where exception reporting allowed him to stop fuel theft. “We used to go through 80,000-100,000 gallons for small equipment, and we used to let them get up to 25 gallons,” Weichman said. Three years ago, after noticing the amount of fuel dispensed was high, he began putting in controls such as only allowing five gallons at a time for small equipment and pulling exception reports to see if anyone was abusing the system. “We were able to see repeated people getting a whole bunch of five-gallon cans; we were able to catch some people who were pilfering fuel,” he said.
Ensuring Correct PM Cycles & Repairs
Sharyl Blackington, fleet manager at San Diego County in California, said one of the key benefits of an automated fuel management system is record-keeping for PMs. “It’s critical that we have accurate meter and odometer reading. It really influences many factors in our business. The longevity and life span of the vehicle with regular maintenance has significantly increased — if the odometer reading is not accurate, you’re not performing timely preventive maintenance,” she said. “From my perspective, it’s being able to collect meter data and odometer reading to improve our PM program and really protect the life span of the vehicle.”
Gustafson agrees. Since he has both the in-vehicle automated product and card lock terminal, Gustafson can see the difference — erroneous odometer readings input by operators. “It really makes managing your fleet impossible, if you’re trying to track maintenance intervals by odometer readings.”
He, in fact, tracks PM intervals by gallon throughput. Since public safety vehicles idle significantly, they’re burning fuel but not gaining miles. Gustafson said this provides a more accurate service interval.
Gustafson added the in-vehicle devices are increasing fleet efficiency not just in their ability to accurately track odometer readings for preventive maintenance, but also diagnostic information for repairs. “If a patrol car has an OBDII error code, if it pulls into our yard, I know it has a trouble code before the officer can get into the office and has time to get me a service request, saying the check engine light is on,” he said. “That’s a huge time efficiency there.”
Time for Other Tasks
The benefits of a fully automated system are clear for Michael Rivers, fleet coordinator for San Diego County. He monitors the fueling system and checks the automated exception reports, contacting the user department or operator to correct incorrect mileage inputs. The fleet is hoping to fully deploy the in-vehicle control devices on all vehicles. “It would make monitoring the system a lot easier to maintain. You have less errors and automatic updating of all systems, so it makes everything a lot easier for us,” he said. Fewer errors to reconcile and better control will also allow him more time for other responsibilities.
Getting Over the Budgeting Hurdle
Kevin DeVinney, director, Dispensers & Fleet Systems, Gilbarco Veeder-Root, admits the biggest barrier to fleets purchasing a more automated fuel system is “initial dollars.”
If a fleet manager needs to present the case for a fuel system purchase or upgrade, return on investment (ROI) using hard numbers can be hard to track. Users find benefits in increased efficiency, theft prevention, better accounting, and a more accurate PM program.
Two things fleets can consider when justifying system purchase are security and automating data collection. Regarding security, DeVinney said fueling sites are “open 24 hours because you have to get fuel all day and night. There is a lot of access to that fuel without anyone supervising that fueling operation.” And if fleets are relying on odometer entry for PM scheduling, accuracy will mean vehicles get serviced on time and don’t break down when operators need them, he added.
For limited budgets, he recommends fleet managers think about what they are trying to accomplish with a fuel system. This may be getting better control over how much fuel vehicles are using, reducing fuel consumption, or uncovering fuel theft if they suspect that is an issue. “Figure out what you’re trying to solve” and build the system around that, DeVinney said.
Echoing the experiences of many fleets, Wade with E.J. Ward recommended a slow implementation plan if an agency has budget constraints. “Take it in steps,” he said. “Go with basic first and add things later.”
One way to estimate ROI if going with a fully automated system is to “document how much time it takes to reconcile [incorrect odometer entries] and quantify that. You’re taking that process away,” Wade said. He added one of his clients is calculating an ROI of just one year when using the company’s CANceiver W4 with passive GPS. The passive GPS system is changing driver behavior, encouraging drivers to take better routes and to slow down, he said.
Whelan said payback on a system can depend on how much fuel the fleet is currently using and what kind of management system it already has in place. “Fleets using a clipboard and having very little control see a quicker payback than fleets using a basic traditional card or key system, because they’re already controlling their fuel better,” he said. However, he said it’s important to distinguish being able to track what’s leaving the fuel dispenser versus knowing which car it’s fueling — having a basic system verifies the identity of the employee but not necessarily into which vehicle the fuel is going.
Joe Basile, vice president of Fueling Technologies at AssetWorks, recommends clients add a line to new vehicle specifications that states the “vehicle must come with fuel management system installed” and to contact the appropriate supplier so the cost of the RFID system is capitalized with the cost of the vehicle purchase. This allows clients to phase all their vehicles in over several years to become fully automated, he said.
Another consideration is the ability to facilitate fueling if a fleet is selling fuel to other agencies. An automated system that tracks fueling will allow for easier billing and can even work as a gate opener for the other agencies’ vehicles.
At San Diego County, Blackington said advance planning will allow the fleet to complete its deployment of the fully automated fuel system. As an internal service fund, the fleet has to charge back to its customers, identifying returns and assessing risk in order to calculate what to charge, she explained. To purchase an automated fuel system, or to complete deployment, “it’s just in the planning,” she said. “How much do you have and how much can you deploy based on what you have? They have to look at what’s possible for them.”
The County had its own budgeting challenges that pushed back full deployment of the wireless RFID system early on. Unexpected costs came up that took funds away from the budgeted purpose, she said, but she’s trying to get back those budget dollars.
For Gustafson, the way to get funding for the purchase was to show the inefficiency of the old system and emphasize the importance of the tracking. “Fuel pricing is extremely volatile, so we need to be accountable for each and every gallon of fuel used,” he said.
Gustafson said with tightening budgets and high fuel prices, the cost of an in-vehicle RFID module is an inexpensive price to pay for efficiency and accurate accounting. A few hundred dollars “during the lifecycle of the vehicle, I think it’s a low cost to really eliminate any false fueling, theft, and being able to pull the vehicle information you need to manage your fleet. I think in the long term, it’s a very cost-effective.”
Weichman added, “There is a payback by having this, even just for accurate tracking and shrinkage. I just couldn’t imagine what would happen if you didn’t have an automated system.”
Use & Expansion: Palm Beach County, Fla.
Palm Beach County in Florida has been using the Ward fuel management system since 1984. The County currently has a combination of card systems and 500 Ward CANceivers, small boxes that hook up to the vehicles’ OBDII ports that automatically capture vehicle data, odometer information, and diagnostics.
While the automated CANceivers provide more accurate data, cost is a prohibiting factor preventing mass purchases of the device. Doug Weichman, CAFM, fleet management division director, Palm Beach County, Fla., said the fleet is phasing them in as new vehicles are purchased, with a goal of putting them into all 2,900 on-road units. In order to handle the additional cost of these purchases, a few hundred dollars each, Weichman said, “When I’m purchasing from a dealer, I upfit it with a CANciever through the dealer as part a capital purchase.”
Use & Expansion: San Diego County, Calif.
At San Diego County in California, the fleet has been using AssetWorks’ FuelFocus since 1999. The system integrates with AssetWorks FleetFocus fleet management information system.
This year, about 40% of the County’s 2,600 on-road units will have AssetWorks’ WAF (wireless automated fueling), an in-vehicle device that automatically pulls vehicle and odometer information. The County has been purchasing the devices to install on new units. For the rest of the fleet, drivers can fuel after swiping a fob and manually inputting the vehicle’s odometer reading.
The County has budgeted to purchase more WAF devices to install them on the rest of its on-road and off-road vehicles, with the goal of completing deployment in three years, said Sharyl Blackington, fleet manager.
Use & Expansion: City of Chico, Calif.
The City of Chico bought a fuel management solution from FuelMaster in 2011, replacing an old fuel management system that Erik Gustafson, fleet manager, said was so antiquated it couldn’t integrate with the City’s fleet management information system. “We weren’t capturing odometer readings or anything. The one time where fleet operations needs to capture the vital information it takes to effectively manage a fleet, we weren’t doing that,” he said.
In addition to a fuel control system that allows users to input a security code and odometer reading, the City also purchased the AIM2 information module for its 25 patrol cars. The AIM2 module connects to the OBDII port on the vehicle and automatically pulls vehicle odometer and diagnostic information.
Gustafson said for the next step, he plans to install AIM2 devices on street sweepers, fire engines, and Vac-Con sewer trucks — these units have high fuel consumption and high fueling frequency. He’s currently budgeting for 50 to 100 more and hopes to install them on the City’s fleet of 346 units.
- Joe Basile, vice president, Fueling Technologies, AssetWorks Inc.
- Sharyl Blackington, fleet manager, San Diego County, Calif.
- Kevin DeVinney, director, Dispensers & Fleet Systems, Gilbarco Veeder-Root
- Erik Gustafson, fleet manager, City of Chico, Calif.
- Orlando Hernandez, product manager, Fuel Control, OPW Fuel Management Systems
- Michael Rivers, fleet coordinator, San Diego County, Calif.
- Mike Wade, director of business development, E.J. Ward
- Doug Weichman, CAFM, fleet management division director, Palm Beach County, Calif.
- Russ Whelan, southwest regional sales manager, Syn-Tech Systems