16 February, 2021
4 Minutes read
The performance of a vehicle in terms of fuel consumption is the number of miles it can do with a gallon of gasoline (mpg) although countries using the metric system express fuel economy as liters per 100Km (L/ 100Km). Knowing how to calculate fuel economy when managing a fleet of vehicles is essential to finding out if you are making adequate use of this resource.
A key variable cost for fleet management
Fuel economy per mile is a key variable cost in a company with a fleet of vehicles. Vehicle efficiency is decisive for other fleet management policies such as:
- The acquisition policy. More efficient vehicles must be purchased.
- The substitution policy. The vehicles that consume the most will have priority.
- The pricing policy. The competitiveness of the company and the preparation of budgets will depend on knowing our operational costs as accurately as possible.
How to calculate the fleet fuel economy?
When calculating the fuel economy of a vehicle our top consideration should be the following: the greater the time range and fuel loads that are taken as a basis for our calculation, the more accurate the result will be.
In order to achieve such accurate results, we need to establish a fuel management system in our fleet that will provide us with information on fuel consumption for each of our vehicles. This information is essential to having an effective fuel control system.
An advance fuel management system must be able to provide fuel consumption data based on a different typology of routes, loads, etc. The more accurate the calculation, the more effective will be our management over fuel consumption.
To start controlling fuel consumption, we must first find out the consumption for each of the vehicles that make up our fleet. This will allow us to know their performance in terms of fuel economy.
We need to record each fuel load made by our vehicles. To do this, we write down the amount of fuel loaded and the distance marked by the tachograph or the odometer at that moment. When the vehicle does the next refueling, we will see the distance traveled by the vehicle with the fuel that we put in the previous refueling. To be more exact, we will fill the tanks completely to know how much fuel the vehicle has used between each refuel.
The following formula is used:
Distance traveled (km or mi) = distance recorded at current refueling – distance recorded at previous refueling.
Taking the data of the distance traveled, we have to apply a second formula to obtain the average consumption of miles per gallon (mpg) or liters per 100 kilometers if you are using the metric system. The formula would be expressed like this:
Fuel economy (mpg) = distance traveled (mi) / gallons refueled
When using the metric system:
Fuel economy (liters / 100 km) = (liter refueled x 100) / distance traveled (km)
It is essential for this calculation system to work that the driver or the fleet manager notes the gallons refueled and the miles traveled according to the vehicle's make. It is also important to note the dates and registration of the vehicle to have the information organized and well structured. This is what is known as a refueling report.
If this is done in the company's own refueling stations, the person in charge of the station must do the corresponding refueling report each time a vehicle is refueled. At the end of the day all the refueling reports must be handed over to the fleet manager.
A refueling report commonly has the following data:
1. License plate number.
2. Driver.
3. Tachograph / odometer.
4. Gallons or liters refueled.
5. Refuel time and date.
6. Refueling place or station.
Fuel economy table
The person responsible for managing the fleet must record all the information contained in the reports in a fuel economy table. This table can be taken to a special fleet management software.
Using a fleet management software, it is possible to calculate the fuel economy of our fleet by monitoring the consumption data of each vehicle and analyzing it over variable expenses for each route, driver etc. Thus, the information regarding the fuel consumption of our fleet is presented in an orderly and structured fashion.
The fleet manager must write down all the refueling reports daily in the table. Periodically, every month or every two months at most, he will prepare the consumption reports and the fuel economy comparisons per mile for the different vehicles.
When dealing with a large fleet, the frequency to extract the reports can be reduced and done weekly or biweekly. The idea is to have information that is as easy as possible to interpret or to be able to detect possible deviations or anomalous consumption in a vehicle.
Setting fuel economy objectives for our fleet
By analyzing the information that we have recorded in our fuel economy tables, we will be able to establish consumption targets for each vehicle. It is recommended to pay attention to the average consumption and the weighted consumption for each vehicle and set a maximum fuel consumption limit.
If the set limits are exceeded, an analysis can be performed to determine the cause: poor vehicle maintenance, poor driving, possible fraud, etc. Setting consumption reduction targets can also be interesting because it will have a direct impact on better economic results for our company.
It is essential that any company that has a fleet of vehicles carries out a consumption control in gallons per mile of its transports. Only then, will the company be able to set profit targets and analyze the data in order to achieve its goals.
