Fuel spending is one of the most significant expenses in the operations of a fleet. Depending on the industry & location, fuel spending can account up to 60% of the total operating costs. With an ever increasing fuel prices, fleet managers globally are adopting a combination of strategies to manage and optimize fuel usage, reduce fuel costs and align with sustainability goals. This complete guide on Fuel Monitoring System (also known as Fuel Management System, Fuel Tracking System or Diesel Monitoring System) is designed to help fleet operators make an informed decision when choosing the right solution & strategies to manage your burgeoning fuel costs.
In this article (updated January 2024), we are helping fleet operators to understand the Fuel Monitoring System technology, the causes behind inefficient fuel spending and develop strategies to reduce the leakages & costs of operating the fleet.
Article Index – Click on the points below to go straight to it:
- What is Fuel Monitoring System? How does it relate to Fleet Management System?
- What is causing high fuel expenses in fleet operation? How to reduce fuel spending in a fleet?
- Strategies to reduce fuel spending in fleet operations
- Security Measures to reduce fuel theft in fleet operations
- Implement Technology to augment driver training
- Improve driver training to include fuel-aware/efficiency-driven behaviors
We have also written other similar complete Guides for fleet operators:
What is Fuel Monitoring System? How does it relate to Fleet Management System?
A Fuel Monitoring System is a technology solution designed to track, monitor and manage fuel usage in fleet operations. It consists of several hardware & software components that work together seamlessly. Fuel Monitoring System can also be a part of a larger suite of solutions (for example a robust Fleet Management System) providing indispensable service to fleet operators.
The primary goals of Fuel Monitoring System are:
- to provide real-time and historical fuel consumption data
- providing real-time alert of fuel theft and refuelling
- helping fleet operators optimise fuel usage & spending, reducing fuel spending
- introduce accountability in fleet operation
- generally improve fleet operational efficiency
- and latest, to measure Greenhouse Gas (GHG) emission for Scope 1 and Scope 3 reporting
Katsana Fleet Management System provides Fuel Monitoring capabilities as a standard feature.
General features of Fuel Monitoring System for Fleet Operation
When combined with a fleet management dashboard, a Fuel Monitoring system diagram will look like the picture below. Fleet operators are able to:
- View real-time fuel level for each vehicle equipped with fuel monitoring system
- Generate a summary of fuel usage visualised through Fuel Charts, including summary of fuel consumption for each trip (total litre of fuel used, and fuel efficiency)
- Detection of key actions such as Refuel action, and possible Fuel Theft (sudden drop in fuel level), also visualised in Fuel Chart
- Generate key action reports (Refuel & Fuel Theft), including location of incidents
- Generate weekly and monthly summary of fuel consumption
Referring to the diagram above, fuel monitoring systems in a vehicle/fleet environment typically consist of:
1. Fuel sensors
Fuel sensors measure the level of fuel in the tank and send data to a monitoring system (typically fleet management systems).
There are several types of fuel sensors, depending on their method of retrieving the fuel data. The most popular fuel sensors are:
- Fuel level sensor (FLS): This sensor is installed within the fuel tank of vehicles or stationary tanks. A hole in the tank has to be drilled to install the sensor. Popular options for external fuel tanks.
- Ultrasonic fuel level sensor: This sensor is installed externally (does not require any drilling made to the tank). Using ultrasonic wave, the sensor can detect the fuel level in the tank. The advantage of this sensor is it does not need drilling, has non-invasive installation, and does not require fuel to be discharged from the tank during installation. Also since it has no movable mechanical parts, its largely maintenance-free. Popular option for external fuel tanks.
- CANBus Reader: While a CANBus reader is not exactly a fuel sensor (it reads all data from the vehicle, not just the fuel data), for the purpose of clarity, we are listing CAN reader in this list. All modern vehicles run CAN network that runs through all different vehicle systems and by tapping into the network, we are able to retrieve precise fuel level and consumption data from the vehicle. This capability tend to be more expensive and delicate to install. The advantage of this reader is being able to read data from regular passenger vehicles (which has internal tanks that prevent drilling to occur). Popular options to track fuel in passenger cars (sedans).
2. Telematics or GPS tracker integration for data streaming over internet
Most fuel sensors typically connect to a hub that collects and transmits the fuel level data over GSM/Internet to a central monitoring system or FMS. More often than not, the hub is a telematics device or a GPS tracker that provide other tracking functions such as real-time location tracking of vehicles and vehicle control.
3. Central Monitoring System or Fleet Management System
Transmitted data from the telematics device will be processed, cleaned, stored & analyzed by a central fuel monitoring system or a fleet management system. The CMS or FMS then displays the fuel level as visual, or a tabulated data. Robust Fleet Management Systems such as Katsana will apply some algorithms to detect anomalies such as potential fuel thefts to alert the fleet operator.
Bonus material: Installation pictures of Fuel Level Sensors on external fuel tanks (trucks, lorries & heavy machineries)
Installation of fuel level sensor require drilling onto the external fuel tank for a permanent insertion of measuring scope.
What is causing high fuel expenses in fleet operation? How to reduce fuel spending in a fleet?
Fuel expenses in a fleet operation is affected by several factors categorised below:
- Vehicle factors: Relate to the actual engine efficiency (how much fuel is consumed every mile) and several other often-ignored factors.
- Human factors: Relate to behavior of the driver, such as tendency to over-rev, or drive fast.
- Operation factors: Relate to unoptimized routing that causes the vehicle to drive longer, or stuck in traffic
- Environmental factors: Relate to adverse weather conditions, or geography that require traversing slopes and hills.
High fuel expense due to vehicle factors
When we talk about fuel cost, the first thing that comes to mind is the vehicle itself. Is it an efficient vehicle to run? Is the vehicle optimized for the type of trip it is doing? For example, a vehicle that does package deliveries in urban areas (many stop-and-go instances) may benefit well from a hybrid propulsion.
But lets digress a bit.
Lets talk about other things that are often ignored that lead to high fuel consumption in fleets. Things that can easily be rectified to reduce fuel consumption.
Simple things like running on the correct tire pressure can drastically improve fuel consumption.
Apart from safety reasons, using the correct tire pressure is financially beneficial for a fleet. Incorrect tire pressure directly increases fuel consumption. Low tire pressure causes the tire to bulge, which increases the rolling resistance. This require more energy to move the vehicle. It can also drastically reduce the tire life, causing fleet operators to change tires more often.
High tire pressure (over-inflation) causes the tire to bulge like a ball and has less contact on the road surface. This reduces rolling resistance (and improves fuel consumption), but increases tire wear, makes braking distance higher and easier to get punctured. For heavy good-carrying vehicles, overly inflated tires are a safety risk for the vehicle and people surrounding it.
We advise fleet operators to inspect tire pressure often. This can be done automatically through tire pressure monitoring systems (which you can acquire through Katsana), or making tire pressure check a compulsory inspection item for your drivers. You can also rely on Katsana DriverLog app to ensure your drivers are doing the necessary inspection item at your preferred interval.
Simple things like using the correct tire helps with fleet fuel consumption
Tires are designed to perform for specific conditions. A sports tire such as Michelin PilotSport 4S is designed for increased grip on dry and wet roads. This is done by using stickier rubber compound which increases rolling resistance.
Tires for light trucks combine several key characteristics. It must be able to perform on a variety of road conditions and adapt to a wide range of delivery and transport needs in urban environment. It does not have make the truck performs like a sports car, but it still need to have good grip on wet surfaces with high durability and wear resistance.
In short, a tire for truck must offer economical efficiency (fuel efficient & long-lasting) while remaining environmentally friendly and safe to use.
Simple things like timely vehicle servicing and maintenance reduces fleet fuel consumption
Regular vehicle maintenance plays a crucial role in maintaining optimal fuel economy. Using Katsana Fleet Management System, fleet operators are able to keep track of the plethora of maintenance and scheduled service items on an intuitive dashboard. Keeping track of vehicle maintenance contribute to improve fuel efficiency.
When a vehicle is maintained well, this reduces fuel consumption through these aspects:
- Engine performance: Regular oil changes and air filter replacements help keep the engine running smoothly. The engine operates more efficiently, ensuring the fuel is burned completely thus reducing fuel consumption and also emission.
- Regular tune-ups: Periodic tune-ups, including checking and replacing spark plugs, ignition timing adjustments and other relevant adjustments contribute to optimal engine performance. A well-tuned engine is more fuel-efficient.
- Air Filter Replacement: A clean air filter allows the engine to receive the right amount of air for fuel combustion in the engine. If the air filter is clogged, the engine has to work harder to draw in air, leading to increased fuel consumption. Regular replacement of the air filter helps maintain fuel efficiency.
- Use of Recommended Engine Oil: Using the manufacturer’s recommended grade of engine oil reduces friction within the engine and improve overall efficiency. High-quality, low-viscosity oil is often recommended for better fuel economy.
High fuel expense due to human factors 🥷🏼
Human factors play a big part in the success or failure when implementing strategies to reduce fuel costs in fleets.
First and foremost, Fuel is a valuable commodity. Depending on the location and type of vehicle, there could be thousands of dollars of fuel in the fuel tank. This is an attractive proposition for culprits to make an easy buck.
Fuel Theft in Logistics industry is on the rise
Based on a study in 2020 published in Journal of Transportation Security, 45% of companies participating in the study stated that tampering of the fuel cap has happened 1-5 times per year, and around for 10% of the companies it happened between 6-20 times per year!
Some transport companies state that drilling and use of violence against drivers has been used to steal diesel (happened 1-5 times per year). 3.1% of the companies mentioned that the fuel cables have been cut between 1-5 times per year.
Finally, fraud activities such as refuelling of private vehicles and charging the whole cost to the company happened to around 2.6% of participating companies and 0.5% answered that the frequency happened much higher at more than 30 times per year.
Criminals tend to target the following locations to steal fuel:
- 35.98% at own truck depot
- 10.58% at rest areas
- 7.94% during loading/unloading activities
- 7.41% when the vehicle is parked close at driver’s home
- 5.29% by the roadside
- 4.23% at fuel station
- 2.12% at secured parking locations
Impact of Driver Behavior and driving skills on fuel economy
Studies have shown that even for the same vehicle, driver behaviors cause large differences in fuel economy and engine efficiency. Driver behavior determine fuel consumption and thus carbon dioxide emissions of a heavy-duty vehicle. Differences in fuel consumption can be up to 30% depending on the driver.
A research by Karl W. Dunkle Werner of University of Michigan titled Driver Behavior and Fuel Efficiency (April 5, 2013) is quoted as saying:
Using second-by-second recordings, I calculate the effects drivers have on their vehicles’ fuel consumption. I estimate that if every driver behaved like the most efficient driver, the fuel savings would be 17% for highway driving and 26% for city driving. These savings are as large as removing a fifth of all vehicles from the road. Changes of that magnitude would be important on the microeconomic level, reducing household gasoline expenditure, and at the macroeconomic level, reducing US oil consumption and imports.
A study titled Impact of Driver Behavior on Fuel Consumption: Classification, Evaluation and Prediction Using Machine Learning, published on IEEE on June 2019 states that driving behavior, such as speed control, preferred rate of acceleration, and vehicle control stability, have a major effect on fuel consumption, regardless of the type of vehicle being driven.
High fuel expense due to operational inefficiencies
Inefficient transport operation is highly wasteful. Leaders in logistics operations are typically a master planner, one that plan their trip to the minute detail including scheduling of delivery goods, route to be used, and type of vehicle.
Take into consideration two logistics companies having to do delivery from one location to another:
- Logistic company A: Due to inefficient planning, drivers are required to return to depot to pick up a missing item. Hence, using more fuel and incurring toll fees.
- Logistic company B: Using a smart Transport Management System and fleet management solution, the driver knows the exact delivery order based on the most optimized routes which take into consideration the traffic condition.
An efficient operation, backed by modern Fleet Management solutions (includes Transport Management System) saves costs and fuel. The cost involved to make operational more dynamic & efficient is negligible compared to the amount of capital lost due to wastage of fuel and other related costs.
High fuel expense due to environmental factors 🚧
The environment and road conditions do play part in fuel spending. For example, trucks that had to traverse hilly terrains are consuming more fuel than trucks that mostly run on flat roads. As such, some fleet operators may want to consider scheduling delivery for hilly locations the last if possible. This would help reduce strain on the vehicle as it will carrying lower load, thus reducing use of fuel.
Similarly, a smart Transport Management System is able to take traffic condition into consideration when planning for delivery route. By eliminating high/stagnant traffic, this would prevent unnecessary burning of fuel and thus lowers fuel cost per mile.
Strategies to reduce fuel spending in fleet operations ⛽️
Fleet operators have a variety of ways to reduce fuel cost, from introducing security measures against fuel thefts, to implementation of modern fleet management solutions and driver training to have fuel-efficiency mindset.
Security Measures to reduce fuel theft in fleet operations
Katsana platform offers several proven solutions to reduce fuel theft in fleet operations. These security measures range from hardware-only solution, to hybrid hardware and software, and finally software-only solution. Here are the solutions available for fleet operators to implement:
- Use of mechanical fuel tank lock that protect the tank fuel from tampering and syphoning. The installation of lock for the fuel inlet prevents unauthorised access to the fuel tank, possibly by opportunistic passer-by. As written above, 35% of fuel theft happens at own depot and 10% happens at rest areas. When a thief scours the depot or rest areas, tanks that are locked will be their last resort. They will likely opt for much easier target than your vehicle. This mechanical solution is available to be installed by Katsana customers as a one-time upgrade.
- Use of Fuel Monitoring System for fleets that measures the fuel level in the tank in real-time and report the status to a web-based fuel dashboard. Also available for purchase on Katsana Management Platform, this is another popular and proven solution for fuel theft prevention. The fuel monitoring system monitors the fuel level 24 hours, 7 days a week, 365 days a year and will automatically alert the fleet operator when a potential fuel theft is detected.
- Use of anti-siphoning tank inlet that adds a layer of protection for tank inlet. Available for purchase on Katsana Fleet Management Platform, once implemented the lock only allows fuel to enter the tank and preventing it to be discharged through the tank inlet (via fuel siphoning). This solution is perfect for trucks with large external fuel tanks. A majority of our customers are using this solution and reported significant reduction in unaccounted fuel. This solution is easier to implement & operate than the mechanical fuel tank lock because it does not require the driver (and fleet operator) to manage a different set of keys.
Apart from the solutions above, it would also be wise to train drivers develop habits that reduces opportunity for fuel theft:
- If the fuel tank is full, encourage the drivers to keep the vehicle locked in an alarmed garage or depot. Hence, having the depot secured and manned is equally important, ensuring eyes are monitoring the parking spaces.
- As such, when planning for transport assignments, plan to avoid parking the truck with a full tank. We recommend refuel when transport assignment begins such that when the trip ends, the truck is no longer brimming with fuel.
- Avoid parking in isolated an dark places (e.g. roadside)
- Block access to the fuel tank by parking close to other trucks, or stationary objects (walls for example).