Peregrine Trucking Company specializes in transportation systems. However, similar to other logistics companies, Peregrine aims at reducing its expenses and operational costs. Fuel costs are the variables that can influence expenses and operational costs. In addition, the transportation industry has been recently going through a rapid expansion and has become highly competitive. Therefore, companies can only attain a competitive advantage by increasing efficiency and minimizing their expenses. Peregrine Trucking Company has been striving to a reduce fuel expenses because of increasing fuel costs. The strategic plan of achieving this goal will incorporate the use of more efficient truck equipment and other tools that will reduce the fuel expenses. The paper will analyze areas the company can consider in minimizing fuel costs and ensuring savings that will benefit the company. It will also incorporate calculations on fuel saving possibilities and the way the savings can benefit the company.
Steps to Reduce the Expenses
The first step to be used in the reduction of fuel expenses is ensuring that the necessary equipment is being used for their intended purpose at the maximum efficiency. The fuelling expense of heavy duty vehicles is high, and it would be important to utilize the trucks efficiently. Similarly, it would be inefficient and uneconomical to send less than optimum goods or shipments that are less than truck loads (Bennett, 2013). Every consignment should be packed with a load, the quantity of which is commensurate with the size of the truck. Combining errands and loads in a single trip saves time and money.
Additionally, regular maintenance will be vital in ensuring that the trucks are in proper operational condition. Regular maintenance includes checking engine oil, changing the air filter and checking the exhaust for clogged catalytic converters. Proper engine tuning will also economize fuel by fixing issues such as faulty oxygen sensors. In fact, a slight mistake of using 10W-30 motor oil for an engine meant for 5W-30 can reduce the fuel efficiency (Bennett, 2015). It is also important to corrode the battery cables failure, due to which the alternator works harder thus using more fuel. The grade of motor oil should also correspond to the manufacturers’ recommendations. Even when practicing regular service check-ups, it will not be prudent to scrimp on motor vehicle parts. For example, an inferior spark, which is dirty or worn out, can reduce performance through inconsistent firing. The chosen parts should always be designed for the specific vehicle or approved by the manufacturer (Coyle et al., 2011).
For the resulting fuel saving possibilities, suppose the fuel consumption is B while the fuel economy is A assuming that the period under consideration is six months and the miles driven within that period is 60,000 miles at a speed of 30 miles per gallon. If the driver uses the highest gear possible, the fuel savings will be about 27% (Grubler & Wilson, 2013). Then again, considering that the vehicle has been well serviced and uses the appropriate spare parts, the fuel saving can increase to 33% (EPA, 2013). The proposed processes will increase the fuel saving possibilities as follows:
= 40 mpg
An extra gallon will go for an additional ten miles.
N/B: The speed used is applicable to heavily loaded trucks, which might not speed as fast. The savings obtained from fuel savings can be used in the purchase of more trucks or tractors.
Fleet Operating Rules and Fuel Efficiency
The second process revolves around fleet operating rules and fuel efficiency. In this way, fuel and energy efficiency can be achieved through the reduction of a vehicle’s weight. Heavier vehicles will require more fuel and energy to accelerate and negotiate sharp hills. From a technical aspect, an empty truck is about a third the size of the entire truck and every drop in the truck weight reduces the fuel use. To be precise, a 10% drop in the total weight of a truck can reduce the fuel use by 7-10% (EPA, 2013).
= 33 mpg
Every gallon of fuel will now cover an additional three miles.
The savings can be used in catering for the maintenance costs of the trucks. Therefore, in considering the weight reduction of a truck, one should always account the density of the materials used in construction. Lightweight materials such as aluminium and metal alloys are highly recommendable.
Trucks that have a lighter weight model can combine different options such as downsizing to a smaller engine of a lighter weight (Fleming, 2010). Additionally, most parts of the truck should be made of aluminium. From a practical stance, such a truck will have aluminium floor joists, aluminium upright posts and aluminium hubs and wheels. However, choosing lighter weight truck will be beneficial only in the long run because the purchase of such tracks will be more expensive than the standard truck (Coyle et al., 2011). In addition, the Environment protection Agency (APA) also advocates for the use of lightweight specs as they would also benefit the economy.
Again, fleet commonality is vital as it ensures money has been spent on the right equipment. For instance, a mechanic can always cannibalize parts of a broken truck so as to fix a different truck. For convenience purposes, having one type of fleet reduces the logistics aspects of having to acquire different spare parts from various manufacturers (Coyle et al., 2011). The calculation of fuel savings with a common fleet will depend on the speed, at which the implementation of new changes takes place.
Hybrid Vehicles and Fuel Efficiency
Trucks should always maintain a constant speed as compared to sudden braking and immediate acceleration. This is important in attaining fuel efficiency because the energy lost in acceleration and deceleration can be significant. However, for pick up vehicles and delivery trucks that operate in city centers, maintaining a constant speed can be an uphill task. For hybrid vehicles, the embrace hybrid power training technology, which ensures some optimization of engine size as well as the efficiency (Iguchi, 2015).
The technology works by harnessing all the energy the vehicle losses during braking and sudden accelerations. Hybrid vehicles obtain their power from internal combustion engines, which handle the power demands that the main engine cannot handle (EPA, 2013). The hybrid technology can be beneficial to Peregrine Trucking Company because it operates delivery fleet trucks. The fuel efficiency obtained from the technology will range within 30-50% (EPA, 2013). However, the variable in this case will be the technology being used and the ability to reuse energy harnessed from braking and deceleration. With a fuel efficiency of 30-50%, the savings will be
= 42 mpg
Every gallon will cover an additional 12 miles.
In motion, an aerodynamic drag takes place and a truck loses its energy to wind resistance. A reduction of the drag stemming from the fuel resistance also increases fuel efficiency. Similarly, an improvement in aerodynamics results to a reduction of the drag coefficient. According to the estimates of Environmental protection Agency (EPA), equipping a truck with aerodynamic devices will increase the fuel efficiency by more than eight hundred dollars annually (EPA, 2013). Aerodynamic options that can be set in place include roof airings, cab extenders and front bumper air dam. Another innovative option would be the use of side skirts and streamlining the front so as to reduce the drag. However, most trucks have standard aero dynamic options, such as streamlining the hood (Grubler & Wilson, 2013). However, to increase the fuel efficiency, several aero dynamic devices have to be considered.
Tires and Fuel Economy
Another area to dwell on is the type of tires that are being used by Peregrine Trucking Company. The contemporary tire technology embraces new designs that ensure fuel efficiency as well as environmental consciousness. A rolling tire produces a resistance that amounts for about 13% of the truck energy use (Grubler & Wilson, 2013). Therefore, there can be implementation of tire options strategy so as to increase the fuel savings. One of these strategies is the use of wider base tires as they are lighter than two tires of the same diameter. In addition, a wider tire has a lower rolling resistance as well as a lower aerodynamic drag. However, regardless of the wider tires being used, they have to comply with pavement weight laws that have been set in place. Wide base tires improve the fuel economy by about 2-5% as compared to the ordinary tires.
= 31.2 mpg
Every gallon will cover an additional 1.2 miles.
By using wider tires, long haul tracks can cut its costs and save over 400 gallons of fuel annually (Bennett, 2015). Further, while implementing this new strategy, it might not make sense to retrofit all the trucks with wider tires. What should be done is ensuring that newly purchased trucks have wider tires because the payback is instantaneous. Tire manufacturers such as Bridgestone tires can now manufacture tires that decrease fuel consumption and remain environmentally friendly. In addition, using the right type of tires will ensure that the load on the truck is balanced and offer a smoother ride.
Driver Telematics Systems
Peregrine Trucking Company operates a fleet of vehicles and will require driver training and telematics as part of the fleet programs. A telematics system should have the ability to deliver a report on each driver. The report is made through a dashboard style report with details on idling and basic driving patterns of the driver. From the system, it will be easy to pinpoint whoever is not adhering to fuel saving instructions. All drivers have to conform to precise set details such as speeding, adherence to routes, and hard braking (Coyle et al., 2011). The idling time intervals should also be kept at a minimum.
The driving habits can also increase the fuel expenses depending on the driver and their degree of experience. Therefore, it is important to hire proficient drivers who also work towards the goals set by the company. For instance, a driver ought to know that driving in the highest gear possible is more fuel efficient. In fact, while driving at a constant speed of 40mpg, a tuck can use 27% more fuel than while using its third gear compared to the fourth gear (Bennett, 2013). Drivers should also avoid laboring the engine. Along with that, in order to avoid drying up of the cylinder walls, a driver should avoid ‘revving’ the engine. One should also avoid vehicle idling because it wastes fuel and produces unnecessary greenhouse gases. However, the vehicles should always be warmed enough so as to avoid any stalling.
How the Management can Truck and Monitor Fuel Consumptions and Delivery Patterns
In freight operations, there are inherent inefficiencies, which the management ought to consider in the quest of monitoring fuel consumption and delivery patterns. A trucking fleet should always optimize its logistics dynamics so as to improve productivity, save fuel and energy. This implies the implementation of a computerized routing and scheduling software that relies on optimization models (Grubler & Wilson, 2013). The software will guarantee efficiency in routing solutions, vehicle products compatibility and route restrictions. There will also be a flexibility of delivering and picking up loads, which decreases the idling time and time spent while loading (Iguchi, 2015). In fact, the wearing and tearing of an engine is directly proportional to the idling time that a truck undergoes under normal operations. Idling for half an hour is enough to reduce the miles per gallon because the engine is running, without covering any distance. There are some vehicle technologies that can be implemented to reduce vehicle idling. Such technology utilizes automatic engine shut down, direct-fired heaters and auxiliary power units.
The management can also monitor fuel consumptions and delivery patterns by deploying a third party logistics provider (3PL). In essence, Peregrine Trucking Company will use 3PL as an outsourced transportation. Thus, the company will handle the roles of taking care of cargo delivery (Iguchi, 2015). The strategy can be effective in fuel consumptions because the Peregrine Trucking Company will use its fleet less. Subsequently, the prerogative of fuel efficiency and saving will be left to the third party company.
Recommendation of Focus of the Fuel Cost Savings Plan that Utilizes all Resources Available to the Company
The best focus on cost savings from Peregrine Trucking Company will be checking in driving behavior and ensuring quality and regular vehicle maintenance. The maintenance service will increase fuel efficiency by increasing the shelf-life and ensuring smooth operation of the equipment. Air filters and fluid levels should also be checked regularly. Additionally, safety practices should always be maintained. This will include keeping engine compartments and undercarriage components clean, which will improve visual inspection. The types of tires used will also matter because they determine the degree of fuel efficiency that Peregrine Trucking Company will obtain. Wider tires are more fuel efficient and friendly to the environment.
Fuel efficiency primarily revolves around the maintenance of trucks as well as the driving habits. It is a collective responsibility that has to be observed by the management, employees, and particularly, the drivers. Peregrine Trucking Company can spend significant resources trying to increase fuel efficiency, but the driving habits of employees are of crucial importance. The company should thus have proficient employees who also understand the goals of the company and how they can achieve the same. Vehicle idling, sudden braking and acceleration should be avoided at all costs. Other factors to consider are regular maintenance, aerodynamic devices and the tires used.