• U.S. inventories for gasoline, heating oil (diesel fuel for the fleet management industry) and crude oil are still all close to record high inventory levels. Some weeks we see these fuel inventories dip, and then the very next week they come racing back. One thing everyone should be able to agree on is the fact that fuel inventories have been high and don’t look like they will crash anytime soon.
• The U.S. dollar is basically at around a 15-month low compared to other major world currencies. That is not a good thing since fuel is traded in U.S. dollars. This allows Yens and Euros to buy more fuel with less and provides a safe harbor for some investors to put some money away as a natural hedge against the U.S. dollar.
• Floating storage, or crude oil sitting in ships out at sea, has seen its rate rise to over 90.3 million barrels of crude oil. This exceeds the daily world usage and is the first time in recent years that there is more oil floating than is used on a daily basis.
• Unemployment rates hit 10.2 percent, the first time its reached double digits in 26 years. That brings you back to the early 1980s and the Reagan Administration’s first term.
• Temporary workers increased to 44,000, showing signs that companies have pushed the envelope with the staff they have and are at maximum production. If history holds true, temporary workers in these types of economies turn into new full-time employees. Certainly 44,000 are not going to touch the 10.2 percent very much, but it is a positive sign.
• China’s fuel imports are at their second highest level of crude oil in October.
• The International Energy Agency has forecast that fuel demand in the fourth quarter will see the first increase in over a year. Their projection is up slightly to 86.2 million barrels daily in world oil usage.

It’s a mixed bag. The underlying story to all of this in my mind is that crude oil prices are currently over priced by at least $15 a barrel. There used to be an expression called, “war premium” and it still gets used when a new war is about to break out. I believe this fuel market is characterized by an “I’m scared to be short premium” concern. People are worrying that since the fuel market reacts or over reacts to everything in the news, things could shoot up on them and pass them by.

Here is something to think about over the next few weeks. To have a good fuel management plan, it starts with just a plan. Nobody does anything real well without having a plan, especially in something as crazy as fuel and something as important to your fleet management. Start your fuel planning now; make sure your fleet fuel card programs, your bulk fuel purchasing programs, fleet fuel auditing program, fuel insurance (risk management programs) are all in place. If you do these things, your fuel management and fuel planning for 2010 will be ahead of most companies. Good luck.

Glen Sokolis
President
Sokolis Group
Fuel Management & Fuel Consulting
Industry Expert
http://www.sokolisgroup.com
gsokolis@sokolisgroup.com

Engine idle time. Employee theft. Poor record keeping. Whatever the reason, you can no longer afford—with fuel near $4.00 a gallon—to tolerate fuel slippage in your fleet.

L.A. Fritter can install the latest technology to give you complete control over your fleet’s operation. FuelMaster, a leader in fuel management systems, has introduced its GPS/AIM2 (Automotive Information Module) that tracks fuel consumption by driver, vehicle and even by state. AIM2 pulls odometer, engine idle time, and other information directly from the vehicle’s computer. AIM2 takes the driver out of the fueling process—no more inaccurate odometer readings, faulty equipment, or employee theft.

You’ll gain better control over your fleet’s fuel consumption, reduce employee theft, and even avoid IFTA fines due to poor record keeping.

Do you want a better way to track your vehicles’ fuel consumption and improve your fleet’s MPG? What about a method to improve preventive maintenance and minimize vehicle and driver downtime?

FuelMaster, a leader in fuel management systems, is rolling out its new GPS/AIM2 (Automotive Information Module) unit which tracks fuel consumption by driver, vehicle and even by state. AIM2 pulls odometer, engine idle time, and other information directly from the vehicle’s computer, eliminating driver error.

FuelMaster customers report a 5-15% savings in fuel costs by eliminating spills, misappropriated fuel and slashing idle time.

This issue happens a lot more than most of you think it does. If your company is not using a fleet fuel card but instead using a AMEX, Visa, MasterCard, or Voyager to name a few you are probably paying more than that posted price sign in front of your favorite truck stop. The sign out front is for cash customers. The credit card price can be anywhere between 5-20 cents more per gallon on your diesel fuel prices.

Your driver probably doesn’t know it because he sees what is posted in BIG Numbers out front and thinks that is today’s price per gallon. The fleet fuel manager is normally just checking for things on the invoice like what time did his driver fuel or did the truck take the proper amount of gallons compared to the distance it travelled. Seldom the fuel manager has the time to check diesel fuel prices.

During a fuel analysis if you were comparing posted diesel fuel prices to the price you paid or to OPIS or some other third party resource you would see that you are overpaying with that credit card you were using as your fleet card. There are fleet fuel cards and with most of them at truck stops you get charged a transactional fee for using the card. This charge is a pass through from the truck stop operator back to you from your fleet fuel card provider. Paying a couple of dollars on a transaction or less is not terrible if you are buying 100 gallons of diesel fuel. Think about what it would cost you if you were using an AMEX and you were paying 20 cents more per gallon. That fuel transaction just cost you $20. Yes, Mr. CEO or President who might be getting points from one of these credit cards is saying I won’t get my points. If you have 10 trucks being charged $20 a fueling, five days a week it just cost you $1,000. They might even rebate you 1%. Let’s say diesel fuel prices are $3.00 and 1% of that would be 3 cents, you are still 17 cents in the hole.

It’s not just at your truck stops either. I was out of town for the fourth of July and was in New Jersey. Living in Pennsylvania where we pay a lot more in gas taxes than they do in New Jersey, fuel appeared to be priced significantly lower than my home state. However, the buyer should always be aware, because things aren’t always as they appear. The BIG sign at this retail location, which I won’t mention but I will not visit again, said $2.449. I pulled in and in New Jersey they feel like the human population isn’t smart enough to pump their own fuel, so all stations are full service. No, not really full service, they just pump the fuel for you, no windshield wiping or any of that goes on. I gave the attendant my fuel card which is a fuel card at truck stops and a MasterCard, which is a credit card everywhere else and say fill it up. To my surprise the price was $2.609 a gallon when he handed me the fuel receipt. I said, the sign says $2.449 a gallon. He informed me that was the cash price. I said it’s not posted anywhere that the credit price is different, he said sorry have a good day. It was a beautiful day out and my car only took 10 gallons so they took me for a cup of coffee in price.

The moral of the story is if you are not watching each penny that is spent on your fuel management, I can assure you that you are paying way too much for your diesel fuel.

Glen Sokolis
President
Sokolis Group
Fuel Management & Fuel Consulting
Industry Expert
http://www.sokolisgroup.com
gsokolis@sokolisgroup.com