Construction equipment

Six Ways to Manage Rising Diesel Costs

During the first week of July, the average price of diesel fuel was nearly 70% higher than a year earlier, according to the Association of Equipment Manufacturers. In response, the association has put in place six councils to manage this escalating cost of operation.

1. Take a tour of diesel prices and transparency

In 2018, Roberta Wright, CEM and Fleet Coordinator for the City of Lynchburg, Va., discovered that she could get a better price from vendors other than the vendor she had under contract. She broke the contract and started quoting every fuel load. Net savings totaled over $103,000 over five years.

This year, as supply chain issues grew, Wright returned to contract purchasing, but with a twist. She asked participating suppliers to show documentation of what they paid for fuel, as well as their consistent delivery charges and total price per gallon of fuel for each load. “It’s not that I’m trying to undermine everyone,” she said in a prepared statement. “It’s my job to get the lowest price.”

While your business may not have the buying power of a municipality, the goal is to keep suppliers honest by keeping the price of fuel transparent. “Anyone can do it,” Wright said.

2. Track diesel costs with fleet management software

Wright uses fuel management software to keep tabs on costs. FuelMaster software reports show vehicle number, who fueled the vehicle, gallons, date, time, pump and product. She adds fuel costs, which change each time they load their two tanks on site.

“Having some type of monitoring system reduces theft,” Wright said. When she notices that the energy efficiency is decreasing, she can ask the maintenance team to identify any problems.

3. Use machine data to manage diesel costs

Telematics data offers valuable insight into energy efficiency and machine utilization.

“In industry, telematics data is often underutilized,” Larry Herman Jr., telematics support supervisor at RDO Equipment Co., said in a statement.

According to Herman, many factors can contribute to fuel burn rate and excessive fuel consumption.

Telematics systems, like John Deere’s JDLink, can track usage data, including idle time, fuel consumed while idling, and compare that data across the fleet to identify opportunities for improvement said Herman. JDLink’s Machine Analyzer tool allows managers to compare data across the entire fleet, specific groups of equipment, or machine types.

Another area to focus on are the speeds or modes in which the machine is used.

“If a machine is not operated in the optimal mode (eco, production, etc.) or in the optimal gear, it will not achieve maximum fuel efficiency,” Herman said.

According to Herman, John Deere’s JDLink system allows managers to see where their machines are reaching key usage on job sites. This is based on machine load factors, motor loads and gears.

“Too much heavy use and you wear the machine out and burn more fuel,” Herman said. “Too low usage and you’re burning too much fuel when a smaller machine could do the job better.”

With telematics data in hand, managers and foremen have the information they can use to train their operators to maximize productivity with use.

Herman encourages managers to sit down with a specialist at the dealership who can offer in-person or remote assistance to help customers deepen their data and capabilities. The answers are not always clear cut.

“Auto-sleep/auto-shutdown can be beneficial in some situations, but not in all situations, because every business and every use case is different,” said Texas-based RDO telematics consultant Jacob Koon. in a press release.

“For example, an excavator working on a pipeline may continuously dig and have a relatively low idle. This machine may be a good candidate for auto-shutdown because its job is to “work” all the time. However, another excavator on the same job site may have a very high idle as it is used to hold the hose in place while it is attached.

4. Implement a fuel surcharge

California-based Graniterock burns approximately 3 million gallons of diesel fuel each year, producing and delivering concrete and other materials to customers in the San Francisco Bay Area.

“We are proud to set a price and stick to it,” said Rich Sacher, executive vice president of the materials division, in a statement. “However, this year we have never been able to keep up with the speed of change.”

As a result, the company did something it had never done before: it instituted a fuel surcharge. The fuel surcharge is based on a publicly available data source and adjusted monthly.

According to Sacher, Graniterock chose a fuel levy because they believe it is the fairest option that provides full transparency to their customers. To ease the burden, they stood behind customers with long-term commitments.

“Any time you have a challenge in a supply relationship or a contractual relationship, it forces you to reach out and challenge yourself,” Sacher said. “Customers appreciate that the fuel surcharge is something they can clearly show to their own customers.”

Throughout the industry, fuel surcharges have become more common. In some cases, contractors and government agencies are delaying projects and/or spreading work out over a longer period in the hope that fuel prices will drop and work can be done more efficiently.

5. Convert Trucks to Compressed Natural Gas Hybrid Vehicles

With compressed natural gas (CNG) priced at $2.52 per gallon, converting a truck to run on CNG and gasoline, or CNG and diesel, can result in significant savings, while reducing emissions.

According to Kyle Flint, director of business development at Oklahoma-based B&H Construction, fuel costs went from $11,600 per employee to $4,800 per employee after converting most of their truck fleet using kits from Green Energy Solutions.

“Anything over half a ton has been converted,” Flint said in a prepared statement.

Conversion kits are easy to install and include a vehicle-specific tank assembly, as well as hoses, tubing, fittings, pressure regulator fuel system, sensors and processors. The cost of a diesel assist kit is around $15,000 to $20,000, and the cost of a gasoline kit is $13,500 to $15,500.

6. Stay on top of maintenance

Equipment maintenance can have a direct impact on energy efficiency. According to Herman of RDO, air filters should be cleaned daily and changed regularly. Fuel filters should be monitored for water or sediment which could cause poor fuel economy. Finally, make sure track tension and tire pressure are set at the correct points to avoid overworking your machines and burning more fuel than necessary.

Source: AEM


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