Fuel management systems: deep dive into fleet fueling solutions

Posted by Reza Tavassoli on 10-Sep-2018 10:52:51 AM
Reza Tavassoli

A business-wise man once told me "Fuel Management may not be the sexiest but top fleet managers know it's where the money is."

Let’s get the obvious out of the way first: next to labor, fuel nearly always represents the highest cost of running a fleet. If you have your own fuel tanks and dispensers (AKA in-house fleet fueling), you need a fuel management system. No ifs, ands, or buts about it. The level of sophistication and control required will vary from one industry to the next and even between companies within the same industry. But the need for a minimal level of distribution and inventory control of fleet fuel is undeniable. Fuel is expensive, and maintaining inventories without knowing how much, to whom, when, and where it goes makes as  much sense as having an open-bar bank account for all to dip into.

The benefits of deploying a fuel management system for your commercial fleet are numerous. But perhaps the most compelling argument is that it's an investment that quickly pays for itself—and then some. Plenty of  real world experience shows that you'll achieve savings of 10% or more on fleet fuel by implementing a reliable, competent, automated fuel management system (as compared to an “open bar”/honor system or "pen and paper" scenario). Some numbers can help illustrate the point.

Let’s take the example of a 50 vehicle commercial fleet. Suppose that each unit consumes an average of 100 liters (~ 26 gal) per week, a bit of a lowball estimate for commercial fleet vehicles but let's roll with it nonetheless. That still adds up to 260,000 L (~ 68,700 gal) a year, or about 980,000 USD worth of diesel fuel at average North American bulk prices. Each and every year. And we haven't yet factored in fuel fraud, leaks, and other kinds of fuel inventory "shrinkage." As mentioned previously, a well designed fleet fuel management system can reduce consumption by at least 10%, saving your company 98,000 USD every year in this case. That is nothing to sneeze at, and a commercial fleet of 50 vehicle remains a relatively small one.

basic features to look for in a capable fuel management system

Fleet vehicle Start-Stop button to indicate the need for accurate fuel management solutions for any sized fleet.


The case for a fuel management system is pretty easy to make. So now what? There are several systems out there, and pretty much all of them cover the bare necessities when it comes to controlling a fuel pump’s distribution of that oh so precious fuel. In a nutshell, a system needs to:

  • Track fuel distribution and inventory in real-time.
  • Offer the option to have users identify themselves.
  • Require vehicles to be identified.
  • Have the option to capture, as part of the fueling sequence, basic vehicle data such as mileage and operating hours. This is important because any maintenance management system in place needs to be fed this data (among several other) in order to properly trigger vehicle recalls.
  • Be able to manage any type of fluid (not just diesel and unleaded), but also propane, compressed natural gas (CNG) and other commercial fleet consumables.
  • Restrict distribution to only those products that are compatible with the vehicle being refueled/serviced.
  • Restrict volumes dispensed based on the vehicle's tank capacity.
  • Offer centralized management of multiple sites via a web application, circumventing the need—and ongoing cost—of installing/maintaining application software on individual PC workstations.
  • Have the ability to automatically detect and record fuel deliveries.
  • Be able to capture and record tank level in any managed product (automated tang level gauging).
  • Use deliveries, tank levels, pump totalizer readings, and fuel distribution data to perform key tasks such as  produce inventory reconciliation reports, close periods, and assign dollar values to fuel related activities.
  • Send notifications for important events, such as abnormal transactions, low fuel tank levels, and leaks.

In addition to the above, a critical aspect to consider is installation. You want to strike the right balance between cost and reliability (a wired installation that requires digging and trenching), and budgetary constraints (going RF or WiFi to save on installation costs).

You would no doubt agree the above listed features and functions are the bare minimum you need for adequate fuel management. But features are only a means to an end: let’s now look at what is really in it for you as a commercial or industrial fleet manager.

Tangible Benefits of an automated fuel management system

Many products and services present themselves as investments, but this is one case where this view is especially true. Here are some benefits of an automated fuel management system.

Lower Fuel Consumption, tighter fuel inventory control

First and foremost, a good fuel management system ensures that only authorized users and active vehicles get access to fuel. This goes a long way toward eliminating fraud. Secondly, with proper configuration, the maximum amount of fuel taken in a given transaction can be reduced to a volume that makes sense, such as the tank capacity of different vehicle classes. Finally, a good system enables you as a fleet manager to easily obtain accurate fuel reconciliation reports and period closures using delivery records, measured storage tank levels, totalizer readings, and fuel distribution data. This makes for some tight fuel inventory management, thus making it easy for you to spot potential sources of loss quickly so that small problems don't turn into big headaches.

Reduced Labor costs

We're certain that everyone in your organization is squeaky clean and above any kind of petty fraud. But without an automated system, they still have to keep manual records of all fueling transactions. This involves employees taking precious time to write down details such as vehicle numbers, fuel amount, date, time, etc. Then, someone has to periodically key in this data into one or more of your information systems (accounting, ERP, preventive maintenance, et al.). Assuming your staff possesses this kind of discipline while maintaining the above reproach strength of character mentioned earlier, we are still looking at significant labor spent recording and managing fuel related data on an ongoing basis.

Also worth considering: if everything is recorded manually by, one would assume, humans , then there is the all too real possibility of data entry errors. Chasing down and correcting these errors (AKA "data scrubbing" or "data cleansing") is yet another layer of manual work that you neither desire nor can afford.

A fuel management system automatically manages your in-house fueling and records all transactional data. It also automatically generates the reports you need and sends them to the people who need them, when they need them.

An Optimized Operation

A high performance fuel management solution has built-in mechanisms to easily exchange data with third party software such as maintenance management (CMMS), ERP, and accounting systems. Furthermore, it supports a wide range of data exchange protocols and formats, from web services to manual import/export, of ascii flat files, as not all systems are created equal. This not only helps avoid time wasted on double data entry, but also creates real synergy as data reaches pertinent systems in a timely manner. For instance, in a scenario where the fueling sequence includes entry/automatic capture of vehicle data (mileage, engine data, fault codes, etc.), important vehicle maintenance recalls are triggered at the right time and costly breakdowns and interruptions are minimized.

Fuel tax recovery

This next item is quite straightforward: some fleet equipment consume fuel both on and off road and chances are some kind of road tax paid on the fuel. An good automated fuel management system can accurately track how much fuel was spent off-road in a given period, enabling you to recover as much fuel tax as legally possible.

Compliance to Environmental Regulations

Depending on the industry and jurisdictions in which you operate, there will be a number of laws and regulations that dictate how tightly your fuel has to be tracked and managed. Regardless of industry, however, if you have an underground tank, the government can come knocking on your door at any time. If that happens, you have to be able to produce a reconciliation reports for any time period they specify. So whichever fuel management system you decide on, make sure that it is capable, at the very least, to generate those reports easily and reliably. Even better, choose one that can do so automatically using a tank level gauging system. Keep in mind that soil decontamination is an extremely costly process, making the detection of underground fuel leaks immensely valuable.

Beyond the basics: fuel management technology tailored to your specific industry

So far we’ve gone over what a basic fleet fuel management system needs to be and what some of the benefits are. For some, this is just fine and no additional investment or functionality is required. It is wise to know exactly what you need and stick to it—getting carried away with bells and whistles comes at a cost. That being said, many operate in industries with unique challenges and requirements. One-size-fits-all fuel management can prove less than optimal. It may therefore be quite important to look for a system that can adapt to your particular operational context. Here are some examples to illustrate the point.

Fuel management for the public Transit sector

Several public transit buses lined up for routine fueling and fluids management..

For a variety of good reasons, many fleet operators will want vehicles to be identified automatically at refueling time. Perhaps there is a problem with fraud. Or maybe employees are resistant to change or lack motivation to collect accurate data, begetting a need to minimize human intervention. In any case, a good fuel management system ought to be able to meet this requirement. It is, however, important to proceed with caution.

In the  case of public transit fleets, the most straightforward approach is also the most effective, efficient, and trouble free. Whereas some would propose relatively intricate nozzle tag setups (battery powered, AKA active tags being the worst), the best solution is actually a simple yet elegant one: RFID plates fastened on top of the bus, read by a long-range reader on the ceiling.

It boils down to common sense system design: buses within a given transit authority tend to be very similar, and they are always positioned the same way in the fueling bay when being serviced. This predictable configuration makes it easy to properly position long-range RFID readers and tags for consistently reliable reads. Also, because there can only be one bus at a time in a fueling lane—the identified bus—the system may immediately unlock all compatible products. This eliminates the need to request different consumables individually, while enabling the system to record multiple products dispensed (fuel, engine oil, transmission fluid, et al.) in a single transaction.

Learn more...

Fuel management for Public Works departments

A public works vehicle at the municipal yard's fueling station that is equipped with Coencorp's SM2 Fuel management solutions.

A public works operation may contain a rather sophisticated set of parts. For starters, whether directly or indirectly, it is funded by taxpayers. Because the funds will be used to purchase fuel, a high level of control and reporting capacity is essential, as public scrutiny is part of the equation. And environmental issues linked to  greenhouse gas emissions are increasingly a concern.

Furthermore, because cities often deal with unions, terminating or reprimanding staff who do not agree with a change (such as introducing a new fuel management system) is not always an option. As a result, you may need a system that is as automated and "out of the way" as possible.

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Fuel management in the Oil and Gas industry

A fuel depot at a local refinery where gas, diesel and other fluids are dispensed tanks for transport to local fueling stations.

Whether operating a refinery or a fuel depot, shipping fuel or providing services in the oil fields, the costs of fuel, labor, and maintenance are not only among the highest but more importantly, these activities are mission critical and must be controlled precisely and with full accountability.

It has been a major challenge for organizations in the oil and gas industry to manage their operations with technologies incapable of providing an automated, seamless, and integrated solution.

Although it is common practice to use technologies from multiple manufacturers, this has had a negative impact on the oil and gas industry's bottom line. For example, controlling the distribution of fuel at the fuel depot with one supplier's technology and the entries and exits of fuel trucks with another's necessitates not only working with multiple vendors, but also learning multiple software, dealing with separate support teams, and so on. And the end result is a non-integrated, patchwork solution.

The same holds true for controlling remote tanks and generators in the oil fields, tracking the movement of fuel trucks and corporate assets, and managing the maintenance and preventive maintenance of all equipment.

The same holds true for managing remote tanks and generators in the oil fields, tracking the movement of fuel trucks and corporate assets, and managing the maintenance and preventive maintenance of all equipment. Extensive, seamless integration, as in the public works sector, is the key to achieving high operational efficiency and ROI.

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Fuel management in the Mining industry

Open pit mining operations where equipment like loaders and trucks require mobile fueling operations.

Aside from basic features and functions, every system deployed in the mining industry must meet two requirements: it must be rugged enough to withstand the often harsh climate, and it must ensure that critical equipment never runs out of fuel.

Dust, sludge, water, ice, and snow... none of these elements are good for the type of electronics used in fuel management systems. This means that the technology you choose must have a proven track record of performing in harsh environments. Plus, users in the mining business are not always the gentlest when it comes to the equipment they use. For instance, don't be surprised if you see a mine employee using a fuel nozzle to break ice on a vehicle!

Another important consideration is that mining companies frequently operate in remote areas. Diesel generators are routinely used to provide provide power for everything from machines to climate control within facilities. In this context, tight management of fuel assets is vital and cannot be taken lightly. In addition to tracking fueling operations, a suitable fuel management system needs to monitor generator fuel levels, produce alarms and notifications in low level conditions, and detect and flag leaks immediately.

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Fuel management for Construction companies

A typical construction site where construction equipment need regular fueling from mobile tank fueling operations.

Say you have one or more fleet fueling facilities and have found a suitable system to manage those fuel yards. You have transactional data captured and relayed in real-time, and enjoy all the benefits of a well designed fuel management system that we've outlined so far.

But what if you also have a number of pickup truck mounted transfer tanks (also known as slip tanks or saddle tanks) out in the field refueling equipment on job sites? X gallons per transfer tank multiplied by Y transfer tanks roaming around can add up to an unacceptably valuable amount of liquid assets left unaccounted for.

Not exactly ideal.

Managing small transfer tanks is a fairly common challenge in the construction industry. As illustrated above, keeping track of that roaming fuel can be as daunting as it is crucial, especially the more of them you are responsible for. And due to their small size, equipping these transfer tanks with fuel tracking technology  designed for larger tanker trucks is cost prohibitive. So when evaluating fuel management solutions for their fixed, in-house fueling, construction companies with mobile refueling units should proceed with foresight. Looking for vendors who can also provide a cost effective means of tracking mobile fuel distribution—while still delivering the cost-cutting automation of more standard fixed systems—is clearly worth their while.

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Automated Fuel management: a must-have for any fleet

In brief, a good, automated fuel management system is a low risk, high reward investment that pays for itself quickly and then some. When shopping around for a solution for your fleet, be mindful of the essential features we've covered here. Not only will you not go wrong, but chances are excellent that you'll go quite right.

Lower fuel consumption, easier environmental compliance, fuller fuel tax recovery, and more accurate inventory tracking are just some of the ways a competent fuel management system will increase operational efficiency and benefit your bottom line. And a little extra digging can uncover systems with features highly customized to the needs and workflows specific to your industry.

Please visit our home page and learn about some of the most advanced, industry specific solutions available in fleet fuel management.

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