Category: Fleet

Driving Down the Price

Like many beverage distributors, the high price of diesel was cutting into the Arizona-based Golden Eagle Distributors’ bottom line. So, after exploring a variety of alternative fuels, the company decided to transition its fleet to compressed natural gas (CNG). And, after some investigation the company discovered that opening a CNG fueling station right on its own property could lower its costs even more. “Diesel hasn’t been coming down,” says Bill Osteen, senior vice president of business operations, at Golden Eagle, explaining the price is still at or above $4 a gallon in his Arizona market, while CNG is around $2 a gallon. “Also diesel is not as eco-friendly as we wanted to be as a company. We wanted to lessen the heavy dependence on foreign oil.”

Golden Eagle ended up partnering with Trillium CNG to open a CNG filling station at its Tucson facility, with another under construction at its Casa Grande facility, and plans for others in Buckeye and in Flagstaff, Arizona as well. While there is always the possibility of fueling at a CNG station somewhere else, Osteen, in a presentation at the recent BevOps conference, explained that nearly an hour per vehicle could be lost on the road in doing so.  “We didn’t want to leave our premises to fuel, we’ve always fueled on site, we wanted to fuel on site,” he says.

One way to having Trillium foot the costs of building the CNG station at Golden Eagle was to prove there is enough demand for the fuel. Trillium, tor example, typically wants to see 100 to 125,000 gallons per year at a DC and Golden Eagle met those specs.

And Golden Eagle was able to generate additional revenue by opening the fueling station to the public. This also promotes Golden Eagle as a green-minded company. “We decided that public access was great for us,” says Osteen. “We liked the visibility in the community. We wanted to be associated with green energy and helping our community, the environment. So that public access station was desirable for us.”

The way Golden Eagle’s deal with Trillium works is the distributor provides the station location, technically a lease agreement, although there’s no cost for the lease to Trillium, and then Golden Eagle provides certain infrastructure around the station, such as lighting and power. Trillium then provides the station-specific equipment and the infrastructure necessary for the station along with the maintenance and management of the station. “So anything that goes wrong with that station, they fix, they maintain, it’s on their dime,” Osteen says.

Another distributor, Wismer Distributing, in Bayside, Texas, has harnessed the power of Fleetmatics’ fleet tracking system to help it cut down on fuel costs. By installing the system on each of its trucks and then having alerts go out via email about driving behavior outside of certain parameters, the company has been able to alter behaviors that could lead to wasted fuel. For example, one email alert goes off if a truck idles for more than a certain number of minutes, while another goes off if the vehicle is traveling 10 miles an hour or faster than the posted speed limit.

Joshua Fletcher, National Accounts Manager at Fleetmatics, says a solution like his company’s can be used in three main ways to cut down on fuel costs: to alert about speeding, idling and to help design better routes. “Every hour of idling is a gallon of gas,” he says. “So if I own a 200-unit distribution center in Texas and I pull up the Fleetmatics system, I can look and see how many hours of idling I’ve got and multiply that by what I’m paying for a gallon of fuel. So from the higher level, idling is the very quickest and easiest way to quantify a return with Fleetmatics. “It’s all about creating good habits. I personally recommend having the system set up to alert the driver that he’s been idling too long. They start to assume either dispatch or another employee is monitoring their idling and they just simply start to shut the vehicle off.”

Another alternative is devising incentives that include the drivers, Fletcher says. “He who idles the least gets a gift card at the end of the month,” he says. “The whole Big Brother aspect goes out the window because you include them. It gives them a way to be incentivized, be recognized and make some cash. And it saves the company a heck of a lot of money.”
Jim Coker, general manager, Wismer Distributing, told an audience at the recent BevOps conference: “I know fleet tracking was the correct decision to make. In the beginning I wasn’t sold on it, but it didn’t take long to realize the benefits long and short that make fleet tracking as important a part of our business as iPads and cell phones. It’s paid for itself time and again.”

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