The United States passed a painful yet historic milestone this week as the national average price per gallon of regular gasoline surpassed $4 for the first time on Sunday, 8 June. As rising fuel costs continue to put the breaks on the overall economy, some businesses are pushing ahead by reducing average fuel costs by 15 per cent with savings up to $15,000 per vehicle.
They are taking advantage of a new, comprehensive programme called 'environmental performance from GE Capital Solutions Fleet Services'. Combining technology and analytical solutions, Environmental Performance, one of GE's first Ecomagination-certified services, includes telematics that baseline where and how each vehicle is performing. Ecomagination is a GE business strategy to help meet customers' demand for more energy-efficient products and to drive reliable growth for GE. ( See: GE's 'ecomagination' business grows to $14 billion; revenue target raised to $25 billion as orders top $70 billion )
Metrics centrally captured for analysis include total distance driven, fuel use, drive time and CO2 emission by vehicle along with speed and time spent idling. Based on this real-time data, GE helps fleet managers re-sequence their existing routes and re-assign deliveries to different drivers. The resulting benefits from harnessing and then using the information to better manage a vehicle fleet are notable-double digit plus improvements in accidents rates, overtime costs, customer retention, workforce productivity, carbon emissions as well as fuel costs savings.
One customer that's truly been delighted is Truly Nolen of America, one of the largest family-owned pest control companies in the United States. Headquartered in Tucson, Arizona with 75 branch offices in Arizona, California, Florida, Nevada, New Mexico, Texas and Utah, the company has deployed GE's solution in more than 400 of its service and sales vehicles to date, says Bob Hartley, vice president Technical Services at Truly Nolen.
"We realised benefits immediately as we saw that technicians were leaving vehicles idling to run air conditioning while on service calls. Having line of sight into that wasteful practice allowed us to stop it, saving us about $300 in fuel costs per vehicle per year while also lowering CO2 emissions," Hartley said.
"Additionally, GE's solution has helped us optimise our driving routes, prevent misuse of fuel cards, and reduce speeding. It's been great so far, and keeps getting better as more features are added," added Hartley. "That's why we're in the process of deploying this GE Fleet Services offering across our entire fleet of 900 vehicles."
Another company that's realising big benefits is Boca Raton, Florida based Amtec, a national provider of outsourced solutions to the cable television, telecommunications and broadband services industries throughout North America. According to Gene Hollenbeck, corporate director of assets, risk and safety for Amtec, they began using Fleet Services telematics offering in November 2007 on approximately 700 of their service vehicles.
"The big issues for us are controlling fuel costs, knowing where our service vehicles are and what they're doing. So far, telematics has been very good for us. ''
Like Truly Nolen, reducing vehicle idling time was an area for immediate savings.
''We've seen tremendous reduction in minutes our vehicles are idling--upwards of 40 per cent in fact. That's a big savings for us and also helps reduce our CO2 emissions," says Gene. "We've seen significant reductions in driver speeding offenses too, which hopefully reduces our risk exposure. Overall, our experience with telematics has been very, very positive,'' said Hollenbeck
Telematics is just one element of GE's environmental performance programme. ''We work with our business customers from the starting line, helping them select which vehicles are best for their business over the lifecycle of a lease. Selecting the right car or truck is one of those decisions that individual consumers spend a lot of time on. For a fleet manager who is responsible for procuring and operating dozens, if not hundreds or thousands of vehicles, that decision is all the more complicated with major business consequences. We make that process easy,'' said Bob Mitchell, president and CEO GE Capital Solutions, Fleet Services.
''GE understands what businesses are up against today dealing with crude oil, gasoline and diesel increases. We have a solution that's going to save our customers a lot of money and give them a great return on their investment-up to 15X ROI or $15,000 per vehicle per year. We can also help them help the environment and proactively get out in front of legislation aimed at stabilizing CO2 emissions. It is welcomed relief for business fleet operations that are under tremendous pressure,'' said Mitchell.
Fleet Services tested its telematics service with several dozen customers last year. Its goal is to deploy 40,000 units this year, which when reached will produce $26 million in fuel cost savings (based on $4 per gallon) and 48,000 metric tons of CO2 reduction for customers.
''That's just a start,'' added Mitchell, whose business has more than 1.6 million cars under lease and service management through operations in the U.S., Canada, Europe, Japan, Australia and New Zealand, ''We conservatively expect to help our customers manage data from more than 220,000 telematics units by the close of 2011, saving them at least $145 million in fuel costs while preventing some 270,000 metric tons of CO2 emissions."
Mitchell noted the potential for even more significant impacts, citing the fact that there are approximately 12 million commercial vehicles on the road today in just the United States. With annual savings per vehicle up to $15,000 that can be achieved through GE's Environmental Performance solution, annual savings could reach $1.8 billion.
Notable Facts & Figures
- Alaska became the first state to surpass $4 per gallon on 14 May 2008. As of 10 June 22 other states have seen the average price of regular gasoline pass $4 a gallon.
- Florida, Georgia, Maryland and Vermont climbed over $4 a gallon on June 10.
- The National average for a gallon of regular gasoline today (June 10, 2008) is $4.04.
- It took more than 60 years for gasoline prices to top $1 (1980), a mark that was last seen in 1989. Gas prices crossed $2 in 2005 and $3 in 2008.
- Fuel now represents 33 per cent of a commercial fleet's total costs, up from 13 per cent and 22 per cent in 2006 and 2007.
GE Fleet Services expects to help customers prevent at least 270,000 metric tons of CO2 emissions by 2011, which is equal to emissions generated by:
- 30,646,992 gallons or 3,606 tanker trucks' worth on gasoline being burned
- Electricity use of 35,762 homes for one year
- Energy use of 23,831 homes for one year
- Carbon sequestered by 6,923,077 tree seedlings grown for 10 years
- Carbon sequestered annually by 61, 364 acres of pine or fir forests
- Carbon sequestered annually by 1,883 acres of forest preserved from deforestation
- 11,250,000 propane cylinders used for home barbeques.
- Americans drove some 3 trillion miles in 2006, roughly double the nations total mileage traveled in 1980 and more than four times the total mileage traveled in 1957, the interstate's first year. In 2008, Americans are driving less for the first time in nearly 30 years.
- An April 2008 Kaiser Family Foundation poll of 2,000+ American adults showed paying for gas (44 percent) ranked highest among Americans' top personal economic problems, ahead of :
- getting a good-paying job or raise in pay (29 percent)
- paying for health care and health insurance (28 percent)
- making their rent or mortgage payment (19 percent)
In a national survey of nearly 7,000 consumers in January ' 08 by CNW Market Research, 35 per cent said they would reduce their driving "somewhat" and 25 per cent said "significantly" if gas stayed around $3.75 a gallon for six months. At $4 a gallon, 41 per cent said they would significantly reduce driving.