I was reading an article the other day and it talked about increasing fueling cost and what it effects that you don’t even know.  I found the article to be very interesting so I thought I would share parts of it with you.

Oil shows up in thousands of places besides your car’s fuel tank and engine. It’s true that most oil is used as a source of energy in the United States and that’s not likely to change anytime soon. The average barrel of oil yields the following: gasoline (42%), diesel (20%), jet fuel (9%), heating oil (4.5%), heavy fuel oil (4.5%), liquefied petroleum gases (4.5%) and other products (16%).

All you have to do to see the effect of changing oil prices is drive by a gas station. However, the effects are more far-reaching than what is immediately visible since petroleum permeates our entire economy. Here are some areas of the economy and products that are affected by oil prices.

1. Medicine

Petroleum is used in many of the medical products we take for granted. Visit any hospital or doctor’s office and you will find these items that are derived from petroleum: heart valves, artificial limbs, stethoscopes, syringes, hearing aids, vaporizers, anesthetics, antiseptics, operating gloves and equipment tubing.

In the home, petroleum is a major component of many items found in medicine cabinets and on cosmetic stands: dentures, aspirin, nasal decongestants, rubbing alcohol, deodorants, cough syrup, bandages, burn lotions, antihistamines, allergy medications, vitamins, cologne, insect repellents, moisturizers, soaps and petroleum jelly.

2. Plastic

Plastic is everywhere, and this carbon-based polymer compound is an essential part of everyday life. Walk through any store or supermarket and you will find hundreds of items stored or packaged in plastic. Because of their inert nature, plastics can be used for these purposes without fear of chemical interaction with the contents.

In addition, plastic is used in a wide range of products that require shaping and molding. These include computer housings, toys, eyeglass lenses, shingles, computer disks, athletic shoes and thousands of other products.

3. Around the House

Look in your closet and you will find clothing made from petroleum-based fibers including rayon, nylon, polyester and artificial furs. Look down at your floors and you will likely find petroleum in the form of carpet, linoleum or other synthetic flooring.

The kitchen is stocked with lots of products that rely on petroleum: appliance casings, dishware, cooking utensils, ammonia, glue, tape, ink, candles, matches, shoe polish, dish-washing liquid and many other cleaning products.

4. In the Garage

It’s more than the gas in your car that is impacted by crude oil prices. Under the hood are several other petroleum-based products that keep your car running smoothly and efficiently including hoses, wiring, antifreeze, transmission fluid, brake fluid, grease and motor oil. Beyond the lubricants, car interiors have many parts made from petroleum.

Other items in the garage that depend on oil include your lawnmower, bicycle, fertilizer, garden hose and that leftover paint in the corner. When you pull the car out of the garage and head down your driveway, you may be driving over asphalt that is a byproduct of petroleum.

5. Transportation

While rising oil prices have a direct impact when you buy gas for your vehicle, the indirect impact is felt throughout the economy. When an airline pays more for jet fuel, that cost may be passed on to consumers in the form of higher ticket prices or fuel surcharges. When the railroad and trucks that deliver food to the supermarket pay more for diesel fuel, the added cost shows up during checkout when you pay for your groceries.

The tankers that bring the oil to the U.S. from other foreign sources are paying more for their fuel too. When oil goes up, in a sense we end up paying for the increase twice — once for the raw product and again to get it here so we can refine and use it.

6. Business

Depending on the type of business they are engaged in, companies will be impacted by rising oil prices in a variety of ways:

• Higher fuel and lubricant costs to run machinery and vehicles.
• Higher bills for heating oil and other energy produced by burning oil.
• Pay more for packaging.
• Retail businesses that rely on customers coming to them by car may experience a drop-off in customer volume and thus reduced demand.
• Businesses that rely on discretionary spending, such as travel destinations, will see fewer visitors.

If businesses absorb these cost increases, that cuts directly into their bottom line. For publicly traded companies, that means lower stock prices for shareholders. If they pass the costs on to consumers, that means higher end-item prices and possible decreased demand for their products.

The Bottom Line

Rising oil prices could have a very negative impact on the ability of the U.S. economy to mount a sustainable recovery. Consumers have to buy gas to get to their jobs and they have to put food on the table. At the moment, gasoline and food prices are experiencing more price inflation than many other commodities. That results in less discretionary income to spend on other things like entertainment, retail goods and travel.

If those sectors of the economy get hit as a result, there will be a ripple affect on other businesses that depend on consumer spending to stay profitable. With unemployment currently at 8.9% according to U.S. Bureau of Labor Statistics, rising oil will make it more difficult for businesses to expand and hire more people.

It wasn’t too long ago that fuel prices were lingering between $3.80 and $4.40 per gallon. At that  point many companies took an aggressive stance on fuel conservation. However, for most it was just a flavor of the month. Many companies joined in on the U.S. EPA “SmartWay” bandwagon which is designed to improve fuel efficiencies and reduced the environmental impact. That is all well and good but unfortunately; if a company doesn’t have an aggressive fuel conservation program in place then being “SmartWay” certified should be considered consistent with permitting the tail to wag the dog or maybe ready, shoot, aim is a better metaphor. There
are numerous companies that pay an outside SMA (Subject Matter Expert) to fill out the required documentation. There obviously isn’t anything wrong with being “SmartWay” certified or using an outside resource to fill out the documentation. But the point is are you really impacting fuel economy or the environmental impact if you are not managing the one (1) factor that has a 30 to 35 percent impact of fuel economy,  which is the driver? There is not one (1)  single technology on the market that will have more of an impact than holding drivers accountable and since you’re now required to hold them accountable for safety (CSA 2010) why
not put the tools and controls in place to hold them accountable for fuel performance?  
 
Here are a few suggestions on how to put these controls in place. 

• First ensure your equipment is performing to specifications and the preventative maintenance program maintains it as such.
• Put a fuel procurement process in place that will ensure you are maximizing your full-procurement potential. What are you paying compared to pump price? Rebates not
  cutting it?
• Develop an equipment certification process including some type of notification on the equipment. (Visible decal, sticker or notification on DVIR book.)
• Ensure tire pressures are monitored on a regular basis, no longer that 90 day intervals.
• Obtain a proper driving techniques video from your engine or tractor manufacturer and require the drivers to view and hold accountable for performance.
• There are a plethora of products on the market that will improve fuel economy but don’t waste your hard earned revenue on them until you have set the ground work within the culture of the organization.
• Put a driver performance program in place to ensure they are driving to the technology consistent with the equipment, maximizing fuel economy and equipment life.  Compliment effort, reward good performance.
• Be aware that ECM data can be in error up to 12%. 

Here are the 16 key factors that impact fuel economy all of which are all controlled primarily by
the driver:

1. Speed                                                                9. Tire Pressure 
2. Idling                                                                 10. Progressive Shifting
3. Cruise Control                                                  11. 5 th . Wheel Position
4. Engine Brake                                                    12. Alignment (Tractor & Trailer)
5. Driver Skill                                                         13. Skip Shifting
6. Top Govern Speed                                           14. Air Leaks
7. Dropping Gears                                                15. Bug Deflectors
8. Driving when upset/uncomfortable                    16. Brake Adjustments
 
 
The economy is on the rise and along with it will be the accompanying increase demand for fuel and the inherent increase in price. How will you handle this variable cost increase? Are you
going to pass the fuel surcharge on to your customers or are you going to attempt to retain a portion that will positively impact your profit-margin? 
 
There are no silver bullets however in the recent years there are many new technologies that do in fact increase fuel economy including a few oil and fuel additives. However, it is imperative to
build the cultural foundation prior to procuring any of these items or you will only obtain a minimal return on your investment. Were you ever successful in getting your child to eat their
vegetables after they’ve had the ice cream cone? Again, “Smartway” is a good program, but without corresponding processes, it just an exercise in futility.

Don’t shoot the messenger, but high fuel prices are on their way back.
 
Please feel free contact me at mike@mcbconsulting.com or 912-571-9149. I will be more than happy to assist you in determining the best overall solutions for you current situation.

Once a year we pause in our busy lives to take notice of and show our appreciation for the everyday heroes who move our freight, the 3.4 million professional truck drivers who deliver the goods. Everyone knows how important trucks are to our daily lives and to our nation’s economy. If you carry it or push it, live in it, lay on it, or look at it on your wall; if you throw it or catch it or feed it to your dog; if it mows your grass, entertains your family, tells you stories or mops your floor — a truck brought it. 

And each of those trucks, making deliveries large and small to factory, home or mall, has a driver. A driver piloted that big truck across mountains and plains, nursed it along in mysterious freeway backups and wrestled it through city congestion that turns lesser people into babbling fools.

With these drivers working on highways that are more and more crowded, more and more outdated and inadequate in so many ways, the downward trend in fatal accidents “is a testament to the skills and commitment to safety demonstrated by our nation’s professional truck drivers.”

Sokolis Group wanted to share our Thanks to those drivers out there doing what they do best!

More information about Sokolis Group please contact us at 267-482-6155 or www.sokolisgroup.com.

E15 ethanol mandates would bring huge benefits – for the few, at the expense of the many.  This fleet fueling never stays the same and fuel savings never seem to stay still.

If 10% ethanol in gasoline is good, 15% (E15) will be even better. At least for some folks.  Not the folks that like lower fuel saving or lower fleet fueling cost.  Certainly not fleet managers or fuel managers who manage large fleet companies.

We’re certainly heading in that direction – thanks to animosity toward oil, natural gas and coal, fear-mongering about global warming, and superlative lobbying for “alternative,” “affordable,” “eco-friendly” biofuels. Whether the trend continues, and what unintended consequences will be unleashed, will depend on Corn Belt versus consumer politics and whether more people recognize the downsides of ethanol. It will change the fueling landscape and fuel savings that most people want.

Federal laws currently require that fueling suppliers blend more and more ethanol into gasoline, until the annual total rises from 9 billion gallons of EtOH in 2008 to 36 billion in 2022. The national Renewable Fuel Standard (RFS) also mandates that corn-based ethanol tops out at 15 billion gallons a year, and the rest comes from “advanced biofuels” – fuels produced from switchgrass, forest products and other non-corn feedstocks, and having 50% lower lifecycle greenhouse gas emissions than petroleum.

These “advanced biofuels” thus far exist only on paper or in laboratories and demonstration projects. But Congress apparently believes passing a law will turn wishes into horses and mandates into reality.

Not surprisingly, ethanol activism is resisted by people on the other side of the ledger – those who will pay the tab, and those who worry about the environmental impacts of ethanol production and use.

* Taxpayer and free market advocates point to the billions being transferred from one class of citizens to another, while legislators and regulators lock up billions of barrels of oil, trillions of cubic feet of natural gas, and vast additional energy resources in onshore and offshore America. They note that ethanol costs 3.5 times as much as gasoline to produce, but contains only 65% as much energy per gallon as gasoline.  Here is where your fuel savings are lost.  Even if you are using a fuel card or fleet card you are paying more.

* Motorists, boaters, snowmobilers and outdoor power equipment users worry about safety and cost. The more ethanol there is in gasoline, the more often consumers have to fill up their tanks, the less value they get, and the more they must deal with repairs, replacements, lost earnings and productivity, and malfunctions that are inconvenient or even dangerous.  Fueling companies have a harder time handling the product for the same reasons, which increase fleet fueling costs because of increase transportation costs.

Ethanol burns hotter than gasoline. It collects water and corrodes plastic, rubber and soft metal parts. Older engines and systems may not be able to handle E15 or even E12, which could also increase emissions and adversely affect engine, fuel pump and sensor durability.

All these people have a simple request: test E12 and E15 blends first. Wait until the Department of Energy and private sector assess these risks sufficiently, and issue a clean bill of health, before imposing new fuel standards. Safety first. Working stiff livelihoods second.

* Corn growers will benefit from a higher ethanol RFS. However, government mandates mean higher prices for corn – and other grains, as corn and switchgrass incentives reduce farmland planted in wheat or rye. Thus, beef, pork, poultry and egg producers must pay more for corn-based feed; grocery manufacturers face higher prices for grains, eggs, meat and corn syrup; and folks who simply like affordable food cringe as their grocery bills go higher.

Biotechnology will certainly help, by enabling farmers to produce more biofuel crops per acre, using fewer pesticides and utilizing no-till methods that reduce soil erosion, even under drought conditions. If only Greenpeace and other radical groups would cease battling this technology. However, there are legitimate environmental concerns.

* Oil, gas, coal and uranium extraction produces large quantities of high-density fuel for vehicles, equipment and power plants (to recharge batteries) from relatively small tracts of land. We could produce 670 billion gallons of oil from Arctic land equal to 1/20 of Washington, DC, if ANWR weren’t off limits.

By contrast, 15 billion gallons of corn-based ethanol requires cropland and wildlife habitat the size of Georgia, and for 21 billion gallons of advanced biofuel we’d need South Carolina planted in switchgrass.

* Ethanol has only two-thirds the energy value of gasoline – and it takes 70% more energy to grow and harvest corn and turn it into EtOH than what it yields as a fuel.  That just doesn’t make fueling sense to me.  Why would any fuel management system want to lose energy, you can’t replace it by cheaper diesel fuel prices or fleet cards, mobile fueling or fuel cards.  Your fleet companies, fuel savings go out to the farm.

* Ethanol blends do little to reduce smog, and in fact result in more pollutants evaporating from gas tanks, says the National Academy of Sciences. As to preventing climate change, thousands of scientists doubt the human role, climate “crisis” claims and efficacy of biofuels in addressing the speculative problem