Accounting for approximately 40% of the operating costs of fleets, the cost of fuel is huge for firms that rely on vehicles to provide products and services. To keep costs low, it’s often advised to prepare a budget and set spending targets. However an unpredictable global fuel market, it’s impossible to forecast accurately (and thus budget) for fuel expenditures.
Fleets are also under the constant threat of a loss via the cost of fuel theft. When costed, fuel theft accounts for around 5% of a fleet’s total fuel budget! Little wonder that fleets with fuel theft issues, always seem to have their expenses outstrip revenue. As a resource that makes up over a third of a fleet’s operating costs, fuel theft has a direct effect on the bottom line. Its poor management results in diminished cash flow, leaving the firm facing an uphill challenge to keep their vehicles on the road.
A Problem on a Global Scale
Fuel theft and fraud is a major problem in many fleet-based businesses, in fact its a problem that’s found on a global scale as well. Fuel theft isn’t an isolated issue, as diesel theft has been reported from the plains of Afghanistan to the back roads of Missouri.
Other methods include:
Financial Cost to Your Business
The financial implications of all these actions can quickly add up. With fleets that use a manual logbook to record fuel purchases, let’s examine one possible scenario.
A commercial truck can easily consume more than $70,000 of diesel per year, which comes to around $5,800 per month. With diesel costing around $2.53 per gallon, that comes to 2,306.5 gallons per month.
Lets assume 1% of that volume is stolen from your fleet, that’s a loss of 23 gallons per month, per truck. This will cost you around $58, for every truck in your fleet. With 10 trucks, this costs $580. With a 100 truck fleet, that’s an unnecessary bill of $5,800 per annum.
The estimated 1% loss is a conservative estimate as some industry watchdogs put it closer to 3%.
Can you really afford to lose that much profit in a month, or throughout the year? And with the prospect of diesel fuel prices going higher, incidences of fuel theft will only go up.
Fuel Theft Prevention Tips
Serious issues like this often have multiple solutions available, however the efficacy of a solution will depend on the individual circumstances. Depending on your business model, one of these (or a combination) can help you stem the flow of fraud and theft from your vehicles:
Individually, all these will strategies work, but most fleets find that their best defence is with a robust fleet management program; especially one that combines fuel monitoring solutions with your fleet management system.
Knowing the value of tracking multiple data points, at Bright Order, we developed a comprehensive fleet maintenance software, known as EMDECS. Plagued fuel theft? Our software can gather fuel information, allowing it to be compared against the vehicle average; any deviation may be an indication of theft.
The data gathered can also be compared against historical records, vehicle average and any discrepancies quickly detected. Monitoring a vehicle’s fuel economy can also signal an abnormal deterioration in vehicle parts.
Don’t let the 1% loss become 5% in your fleet, start tracking the metrics that matter in your business. Contact us here and lets show you how EMDECS can help to eliminate fuel fraud in your fleet.