As we approach the Thanksgiving season and Black Friday, it's time for us to look at where the fuel market is and how it could affect your fuel management program. There are clearly mixed signs in the fuel marketplace. Most view the signs as positives toward stagnant fleet fuel prices or possibly lower fuel prices. Let's take a look at what is going on with fuel inventory management across the world:
• U.S. inventories for gasoline, heating oil (diesel fuel for the fleet management industry) and crude oil are still all close to record high inventory levels. Some weeks we see these fuel inventories dip, and then the very next week they come racing back. One thing everyone should be able to agree on is the fact that fuel inventories have been high and don't look like they will crash anytime soon.
• The U.S. dollar is basically at around a 15-month low compared to other major world currencies. That is not a good thing since fuel is traded in U.S. dollars. This allows Yens and Euros to buy more fuel with less and provides a safe harbor for some investors to put some money away as a natural hedge against the U.S. dollar.
• Floating storage, or crude oil sitting in ships out at sea, has seen its rate rise to over 90.3 million barrels of crude oil. This exceeds the daily world usage and is the first time in recent years that there is more oil floating than is used on a daily basis.
• Unemployment rates hit 10.2 percent, the first time its reached double digits in 26 years. That brings you back to the early 1980s and the Reagan Administration's first term.
• Temporary workers increased to 44,000, showing signs that companies have pushed the envelope with the staff they have and are at maximum production. If history holds true, temporary workers in these types of economies turn into new full-time employees. Certainly 44,000 are not going to touch the 10.2 percent very much, but it is a positive sign.
• China's fuel imports are at their second highest level of crude oil in October.
• The International Energy Agency has forecast that fuel demand in the fourth quarter will see the first increase in over a year. Their projection is up slightly to 86.2 million barrels daily in world oil usage.
It's a mixed bag. The underlying story to all of this in my mind is that crude oil prices are currently over priced by at least $15 a barrel. There used to be an expression called, "war premium" and it still gets used when a new war is about to break out. I believe this fuel market is characterized by an "I'm scared to be short premium" concern. People are worrying that since the fuel market reacts or over reacts to everything in the news, things could shoot up on them and pass them by.
Here is something to think about over the next few weeks. To have a good fuel management plan, it starts with just a plan. Nobody does anything real well without having a plan, especially in something as crazy as fuel and something as important to your fleet management. Start your fuel planning now; make sure your fleet fuel card programs, your bulk fuel purchasing programs, fleet fuel auditing program, fuel insurance (risk management programs) are all in place. If you do these things, your fuel management and fuel planning for 2010 will be ahead of most companies. Good luck, and Happy Thanksgiving.
Preventive maintenance prior to the onset of the cold weather is an important factor in keeping your fleet on the road. The heat of summer is the true enemy of batteries, and the death knell can come when you least expect it or want to deal with it-on a frigid winter morning. As the temperature drops, so does your battery capacity. At zero degrees, your batteries have less than 50 percent capacity than they had at 80 degrees. Adding to that is the fact that at zero degrees your engine is 2.5 times harder to start due to the oil thickening and the resistance to movement of cold internal engine parts. These two factors combined can be a recipe for a very unpleasant morning and for the truck not making its scheduled run. Remind drivers to power off all electrical accessories that put extra strain on the batteries while engaging the starter to ensure as much available electrical power is utilized to power the starter motor. Now is the time to test batteries to help eliminate potential problems on a cold winter morning.
Daily inspections and maintenance are also critical to staying on the road:
• Fuel tanks should be kept full to minimize condensation that could cause fuel system freeze-ups.
• If fuel has gelled, change the fuel filter. Always use the recommended fuel filters. Never use a larger micron filter to increase flow or extend filter life. This could void your engine warranty. Remember your fuel filter is your only protection against contaminants in the fuel.
• It is imperative that air tanks and water separators be drained daily during cold weather. As the ambient air temperature decreases, there is considerably more condensation buildup in the fuel and air tanks. Sub-freezing temperatures and water don't mix.
• Avoid brakeline freeze-ups by making sure gladhands are always tight and never leave them laying on a fifth wheel deck exposed. If moisture is present in an airline, use one cap full of brake line antifreeze in the emergency (Red) side only. Brakes may lock up if put in the Service (Blue) side. Make sure you are using a brakeline antifreeze which is compatible and recommended to your particular equipment.
Lastly, keep everyone safe this winter by keeping parking lots, loading docks, trucks and trailers free of ice and snow. Safety starts with you.
Every year the transportation industry faces new challenges during the winter months, and this year is no different. Among those challenges, many states have mandated biodiesel blends while many have mandated idling restrictions. To add to that, fleet fuel prices are rising, and weather forecasters are predicting a colder and snowier winter than any in recent memory. And with the early showing of snowy weather in the mountain states, they may be right. Truck breakdowns are certainly more prevalent during the cold winter months, and proper care and maintenance is critical to keep your fleet rolling. Here are a few tips that can help you stay on the road with as few problems as possible:
• Fuel treatments and additives: For many years winter fuel was a blend of #2 diesel and #1 diesel or kerosene. Today there are many fuel additives that give you the same cold weather benefits at a fraction of the cost. Be sure the fuel in your bulk tanks is treated. If using a mobile fleet fueling service, ensure that they are treating during the cold weather months. Most do, but don't just assume. Ask if you are unsure. Retail and card lock fuel is treated for the area it is sold. Make sure your fuel is treated to be protected down to the coldest geographic areas that your trucks run.
• With the new bio fuels/biodiesel blends, always ask your supplier if they are using a bio fuels blend and if they are treating that fuel. Biodiesel is more difficult to treat for trouble-free winter use than low sulfur diesel or ultra-low sulfur diesel. An accepted method of fuel testing is for cloud point or CP. The newer method is to test for cold filter plugging point or CFPP. The CFPP is the lowest temperature at which fuel will still flow through a specific filter. Ask your supplier if they are performing either of these tests on the fuel you are purchasing and what the cold weather performance of their fuel is.
• Cold weather starting: In most states, with idling restrictions, the days of leaving a truck idle all night to ensure it makes its run in the morning are gone. Most have engine block heaters. These should be plugged in when the engine is still hot, as they are designed to maintain the engine's heat, not heat a cold engine. Instruct drivers not to cool down the engine before plugging in the block heater. However, make sure that they know to unplug the heater before starting, as the heaters can be severely damaged if left plugged in a running engine.
These few tips can make the difference between a go or no go situation, making that delivery commitment, or completing a run versus breaking down. Breakdowns during inclement weather are extremely dangerous. There are many great tips for proper fuel management systems in cold weather ,but the best tip is to increase driver awareness and subsequently hold them accountable for action or inaction