Monte Guerrette estimates that his firm will face at least a 10 percent increase in its gas at the pump costs this year as compared to 2011. And that is a conservative guess when it comes to volatile gas prices, which go down and up, but mostly up, depending on geography, season, refinery problems, oil supply, world politics and speculators.
Ironically, “in this tight business economy, we have to more often drive longer distances to get business and service accounts,” points out Guerrette, senior project manager with Mid State Electric of Ocala, Fla.
So what’s an integrator to do these days to better manage his or her fleet fuel expenses? Here are seven ways numerous firms use and that can apply to fleets from a handful of vehicles to thousands.
- Newer and smaller make a difference. The types, newness and size of vehicles; the ways to purchase; the methods to manage and maintain a fleet; and payload accommodation all can be crucial.
- Shop around, but not too far around, for gas.How, when and where fuel is purchased can tip the balance. There are numerous gas card programs. Some are integrated into a fleet management service. Some are specifically branded to a gas station chain. Others are more all-encompassing. One other tip: Buy gas on Wednesday or early Thursday. Gas station owners often post price increases Thursday at 10 am or a little later for weekend payoff.
- Use carrot and stick measures.Driver behavior and its enforcement by management and their application of technology make business sense. Smarter driving habits hold down gas costs. And revisit any existing personal use policies of company vehicles. With those good old days receding in the rearview mirror, some integrators have adjusted or eliminated personal use.
- Tech up but check return on investment.Technology solutions can range from onboard computing and telematics to global positioning systems (GPS) and sophisticated integrated fleet tracking and management solutions, at times also integrated with software providers that automate security firm operations including client satisfaction. A level of these technologies can work no matter the size of the fleet.
- Adjust client pricing.As a stop gap consider fuel surcharges, increased mileage charges on certain types of service calls or a more overarching increase in fees. “We pass gas increases through to our clients,” says Bradford Caron, president, Signet Electronic Systems of Norwell, Mass. The increases are adjusted in “our mileage expenses per mile. You just cannot neglect your own overhead expenses.”
- Even the little things can make a change for the better.Bob Stoffel, who, until he retired, was logistics “big daddy” over a work fleet of more than 94,000 ground vehicles at UPS. He instituted a now iconic strategy to save gas money: turn right, not left, at intersections, no matter which way you are heading. Idling motors waiting for the signal or oncoming vehicles to pass before turning left are the devil’s tool impacting mileage and productivity.
- Think about alternative energy vehicles.Of course they don’t make sense right now, what with the high buy-in and the lack of infrastructure to fuel and maintain them. But some integrators may see value in them as a method to reinforce their corporate culture or their specialty in energy-saving residential and nonresidential systems.
One speed bump on this road trip: No one solution works perfectly just on its own. In addition, managing fuel cost is really a secondary focus of security businesses, points out Tom Raftery, vice president corporate services and purchasing for Protection 1, Romeoville, Ill. The primary focus: clients and potential clients and the sale, services and monitoring of security, life safety, automation and integration products, systems and installation.
So it is apparent that, when it comes to the gas bill, it takes time and money to save money and time and increase productivity and safety. But taking reasonable action can bring more money to the bottom line; efficiencies can increase customer satisfaction; measures can improve safety; and, as a spillover, some measures can spotlight a certain degree of “greenness” of the business itself.
Today’s Systems Integrator talked with a number of executives to gauge their views and actions.
Collaboration and partnership of integrators with fleet management services can range from financing of an initial purchase to resale of used vehicles. Such partnerships often push for downsizing of vehicles in fleets. But there is much more.
David Wade, group director for supply chain at ADT Security Services, Boca Raton, Fla., has a close relationship with GE Capital Fleet Services, his fleet management service, one that continues to evolve and pay dividends in ways beyond vehicles and financing.
Like most all dealers that install, ADT traditionally had a fleet of full-size service vans. GE Capital of Eden Prairie, Minn., gathered a team of strategic consultants and fleet management experts to help ADT develop new strategies. The outcome: More than half of the fleet now consists of Ford Transit Connects. GE Capital also studied ADT information and communications technologies, which led to a high-tech GPS and telematics vehicle solution.
The bottom line for its 7,000 or so vehicles: ADT says it will save more than $6 million a year in operating costs; reduced CO2emissions by 40 percent; and telematics should create a further estimated savings of more than $3 million annually.
While knowing that mileage ratings for vehicles and tires are often different in reality, Jamie Orvis, president of Security Solutions, Norwalk, Conn., was not necessarily a proponent of Transit Connects. “But it turned out to be a good move. They weigh less” and that means more efficiency. Orvis uses fleet cards when drivers buy gas and intelligent technology to help encourage positive driver behavior. Setting a reasonable tone, Orvis uses technology, for instance, to “gauge speed relative to the speed limit” on streets where the vehicle is traveling.
Tom Sansone Sr., president of T&R Alarm Systems of Clifton, N.J., says that he has also gone to smaller vehicles. “We now buy Chevy pickup trucks with a cap. We still have some full-sized vans that really burn up the fuel. Larger vehicles such as our 50 foot bucket truck and dump truck are diesel.” T&R has a customer base that is different in some ways as compared to ADT or Protection 1. SDM magazine’s sister publication, Today’s System Integrator, recently featured Sansone’s success serving the corrections niche, for example.
So among many security firms, there continues to be a downsizing of vehicles, although preferences vary.
“In the past, about 40 percent of our fleet was full vans. We are now down to 10 percent,” says Caron. “We are also getting rid of vehicles earlier. Older vehicles need servicing and maintenance more often and get lower mpg as compared to newer vehicles.”
Depending on the application, hybrids, electric and diesel powered vehicles, except for the heavy equipment some dealers, installers and integrators need, “may not have return on investment right now,” Raftery contends. There are limited experiments with alternatives, often pushed by a security firm’s wish to burnish its “green” or “leading edge” image.
Scott Taylor, director of field services for Vivint of Provo, Utah, and who manages about 720 various vehicles in his fleet, squeezes more out of its Enterprise Fleet Management service (St. Louis, Mo.) and analysis tools. But the firm also has invested in intelligent scheduling of appointments, working with ClickSoftware Technologies of Burlington, Mass., and deployed by Diabsolut of Quebec, Canada, for a unique scheduling and mobile solution integrated with other customer relationship management or CRM components. The solution functions on mobile devices used by field technicians.
“The approach allows us to optimize our field technician schedules throughout the day to ensure that all jobs and resources are optimally matched, even with changing service requests throughout the day," says Taylor. He adds that you have to be a believer in such automation. The system continually provides a three hour window of opportunity for on-the-road appointments. “And it is important to let the system do its thing. If you start to manually change things,” you can lose out of the advantages it provides, including decreases in the use of gas.
Overall, “there are four essential elements when considering a vehicle. Sufficient storage. Passenger use and roominess. Mileage. And resale value,” says Taylor. “And resale value can sometimes outweigh the others” in the long run..
Raftery, who handles 65 offices, five call centers and about 500 vehicles, of which many are larger vans, leases through fleet management companies, too. Downsizing to a smaller vehicle such as Ford Transit Connects, a growing favorite among security firms, can “get us about 12 more miles per gallon, although with a lower payload,” he says. “With 100 pounds less of payload, you can gain two percent in fuel savings.” It’s always a challenge to minimize payloads: “The bigger the vehicle, the more drivers want to carry stuff. We are also putting ladders, spring loaded, inside the vehicles to eliminate fuel drag” from gear on the top outside of vans.
Just like a consumer, it makes a difference where and how a fleet driver purchases gas. “We have a centralized fuel purchasing program; but we are not buying fuel in bulk,” Raftery says.
When it comes to gas cards, Vivint has some used by others but, according to Taylor, “we have developed our own card, too.”
Dan Budinoff, president, Security Specialists in Stamford, Conn., employs “a whole bunch” of efficiency and safety solutions. He has, for example, a fuel surcharge of $5 per service call as a hopefully short term measure.
In addition to bringing in Transit Connects for service techs, Budinoff equipped sales staffers with Honda Fits, a unique looking vehicle but, according to Budinoff, the Fits fit in, thanks to their 30 miles per gallon or so attraction. Another one is his WrightExpress (South Portland, Maine) fleet charge and fuel cards. Unlike oil company-specific cards, WrightExpress cards, according to Budinoff, are honored by most gas station, “including the off brands,” and make it easier for drivers to more quickly shop around for a best buy. In addition, use of the cards at Security Specialists triggers daily reports to SageQuest, of Solon, Ohio, a software-as-a-service partner of SedonaOffice of Chagrin Falls, Ohio.
Orvis also is a SageQuest user to put job information, work orders and customer locations in the context of a real-time map view for drivers. “We can lay out a day’s worth of service calls. In one view with six different calls, for example, the map shows the direction of ways to go and inefficiencies in routing. When possible, we juggle appointment times to achieve more directional travel.”
SageQuest, which calls itself a “FleetMatics” company, provides GPS fleet tracking and management solutions to improve overall efficiency of a mobile workforce. SedonaOffice develops financial accounting and business management software for security alarm companies.
Michael Marks, co-founder and president, SedonaOffice, views his firm as providing enterprise resource planning in the security niche through software-as-a-service and cloud-based services. “We are there for security firms from contract through cancellation,” Marks adds, and who says his sweet spot is helping firms “do more with less.”
When it came to SageQuest, the GPS stars came together, says Marks. “We worked with the firm for a number of years. And more recently a client of ours came to us with a request to link our apps to a GPS app.” Boom. “When you create a service call, even before you schedule it, you can see every service vehicle [in the area] and drag and drop appointments or swap to optimize visits.” He points out that, no matter the fleet size, there are savings to be made, exponentially as the number of vehicles increase. “Better route planning and efficiencies. Time saved and increased productivity. More billings per day.”
Caron uses a GPS tracking service, WEXonline from WrightExpress. “It’s automated with issuance of email notifications” of certain driver behavior such as speeding and includes a geofence application to alert when a driver may go beyond a geographic perimeter. Newer vehicles capable of supporting GPS also can alert to things like tire pressure too low. WrightExpress just launched "Octane," its free mobile app that includes a fuel site locator with up-to-date transaction-based fuel prices and text-to-speech capabilities.
Speaking of such technology, “GPS absolutely works,” says Raftery, who points out there are a number of providers of GPS, telematics and onboard computing options. And automated dispatch can often better meet customer needs, equipment requirements, gas savings and efficiency. Beyond that, the various approaches allow a closeness to the customer.
Still, the Protection 1 executive warns that sophisticated, some say complex or too costly, management and operation of tracking and scheduling may be more than the savings derived. But that’s the case in any of the strategies. Driving crosstown to save a couple of cents per gallon may cost more in gas to get there.
Active maintenance programs also pay dividends. They can be driven by the security firm or its fleet management service. Changing the oil at appropriate intervals and accurate tire pressure are just two elements, but important ones. “Proper tire pressure can save 90 to 100 gallons per vehicle per year,” says Raftery.
Without a doubt, a fleet management service or a fuel card service, as Orvis has indicated, can help at the pump. They can gain a per gallon pump price less than publicly displayed or adjust pricing at billing through pre-purchasing or agreements pegged at a certain rate. Auditing reports, evaluated by an outsource firm or the security company, can identify abuses of a fuel program such as premium fuel, multiple fuelings, and pumping more than a tank can hold.
And there is always the “need to influence employee behavior,” observes Raftery. “It all depends on local management so that drivers don’t use just the same, most convenient or favorite gas station,” which may not be the least expensive. There is that reasonable need to shop around for the best pump price. In addition, speeding eats gas. Some fleet management services and technology solutions can e-mail a supervisor of untoward driving behavior.
Also in the face of rising gas prices, “we have adjusted our personal use of vehicles program,” says Vivint’s Taylor. “In the past, we had a flat rate for personal use. Now we charge employees by the mile and they are more aware” of the costs.
Driving all these efforts, to one degree or another, is the rising cost of motor fuel. It’s a challenge facing Americans and the global economy as well as a debating point during this year’s Presidential elections.
A Gallup poll last month, for instance, found a vast majority of Americans (85 percent) say President Obama and Congress should take "immediate" action to keep a lid on prices. While that seems highly unrealistic and ineffective for such a complex problem, security firms both big and small are taking actions both large and little to better manage their energy costs, especially when it comes to company cars and trucks.