With an increasing number of supply chain issues, this year Wright has returned to contract purchasing, but with a twist. She asked participating vendors to show documentation of what they paid for the fuel, plus their constant, delivery fees and the total price per gallon of fuel for each load. “It's not that I am trying to undercut everyone. It’s my job to get the lowest price.”
While your business may not have the buying power of a municipality, the point is to keep vendors honest by keeping the fuel pricing transparent. “Anyone can do it,” Wright said.
If you are fueling at retail, several apps can help you identify the lowest price for gas and diesel near you, such as Gas Buddy and Drivvo.
According to Herman, many factors can contribute to fuel burn rate and excessive fuel consumption. “Telematics systems, like John Deere’s JDLink, can track utilization data including idle time, fuel consumed while in idle, and compare that data across the fleet to identify opportunities for improvement,” Herman said. JDLink’s Machine Analyzer tool allows managers to compare data for the entire fleet, specific groups of equipment, or machine types.
Another area to focus on are the gears or modes the machine is being operated in. “If a machine isn’t being operated in the optimal mode (eco, production, etc.) or in the optimal gear, it won’t achieve maximum fuel efficiency,” Herman said.
According to Herman, John Deere’s JDLink system allows managers to see where their machines are hitting key utilization on job sites. This is based on machine load factors, engine loads, and gearing. "Too much hard utilization and you are wearing the machine and burning more fuel,” Herman said. “Too low utilization and you are burning excessive fuel where a smaller machine could better perform that work.”
With telematics data in hand, managers and foremen have the information they can use to coach their operators to maximize productivity with utilization.
Herman encourages managers to sit down with a specialist at the dealer who can offer in-person or remote support to help customers delve into their data and capabilities. The answers are not always clear-cut.
“Auto-idle/shutdown can be beneficial in some situations, but not every situation as each business and use-case is different,” said Jacob Koon, an RDO Telematics Consultant based in Texas. “For example, an excavator on a pipeline job may be continually digging and have relatively low idle. That machine may be a good candidate for auto-shutdown because its job is to be constantly 'working.' However, another excavator on that same job may have very high idle because it’s being used to hold the pipe in place while it’s being attached.”
As a result, the company did something it has never done before — it instituted a fuel surcharge. The fuel surcharge is based on a publicly available data source and adjusted monthly.
According to Sacher, Graniterock chose a fuel charge, because they believe it is the fairest option that offers full transparency to their customers. To ease the burden, they stood behind customers with long-term commitments.
“Anytime you have a challenge in a supply relationship or a contractual relationship it forces you to reach out and challenge each other,” Sacher said. “Customers appreciate that the fuel surcharge is something they can clearly show to their own customers.” The company announced the surcharge in a letter to customers and explained the decision in both a video and podcast.
Across the industry, fuel surcharges have become more common. In some cases, contractors and government agencies are delaying projects and/or spreading out work over a longer time period in the hopes that fuel prices drop and work can be completed more efficiently.
According to Business Development Manager Kyle Flint, one of their clients, Oklahoma-based B&H Construction, has seen fuel costs go from $11,600 per employee to $4,800 per employee after converting most of their truck fleet. “Everything more than a half-ton has been converted,” Flint said.
Conversion kits are easily installed and include a tank package suited to the vehicle, plus hoses, tubes, fittings, pressure regulator fuel delivery system, sensors, and processors. The cost for a diesel assist kit is approximately $15,000-$20,000, while the cost for a gas kit is $13,500-$15,500. There are a number of government incentives for organizations that convert their vehicles to CNG because it is a renewable, clean-burning biofuel. Green Energy Solutions will have products on display at CONEXPO-CON/AGG 2023.