How Rising Gas Prices Affect Business Driving and Travel (and what you can do about it)
by Greg Harper
You have likely noticed that national average fuel prices are on the rise. Prices have been moving higher and higher since early July. This is due to a steep increase in the price of crude oil as well as reduced output of the supply. Summer driving season also means that demand for crude oil is high. These factors combined have led to a recent surge in the market price of crude oil and is likely to impact the price of gasoline at the pump in the next 30 days.
With gas prices increasing, organizations are struggling to control fuel budgets while supporting business needs to increase revenue and retain clients. When increased gas prices take a toll on profitability, companies look to alternate solutions to help ease the pain at the pump. Let’s look at how the cost of fuel is affecting business drivers and their companies, and what you can do to counteract rising prices:
For all vehicles
It’s important to keep vehicles properly maintained. Mileage will be maximized when tires are properly inflated and fuel filters are changed at the recommended intervals. A well-maintained vehicle is safer and more reliable. Another tip is to remove the junk from your trunk. Extra weight from unnecessary items saps fuel economy. Drivers should also drive the posted speed limit. Excess speed not only consumes more fuel per mile, but it adds unnecessary risk. Finally, plan ahead to optimize driving routes to ensure you’re driving the least time or distance possible.
For service/delivery vehicles
Optimizing driving routes helps not only those of us with personal vehicles, but business vehicles as well. Many companies have realized that manually planning service routes wastes time and results in inefficiencies. Automated route planning software
helps companies can help reduce time – on average, 50-80% – as well as an added bonus reducing miles driven 10-25%, which ultimately helps companies decrease hard dollar fuel costs.
Additionally, companies can use automated mileage capture
software to reimburse drivers for only actual business mileage. Automating the mileage collection process typically reduces mileage reported by 13% and helps organizations cut hard dollar costs up to 15%. Plus, capturing accurate mileage ensures that your organization is fairly and accurately reimbursing business drivers.
For air travel
Business travelers can follow a few common sense rules to help combat rising fuel prices – such as: book travel 2 weeks in advance whenever possible; evaluate the cost differential between flying and driving when distances are less than 500 miles between you and your destination; eliminate unnecessary baggage that is typically subject to airline fees; and look to alternative city pairs.
To strengthen control over all travel costs – including evaluating city pairs – an organization can use benchmarking data. When a company uses benchmarking and travel price data
to compare airfare, lodging, meals and car rentals, they can begin to identify the best cost savings opportunities and avoid leaving money on the table during travel supplier negotiations.
Is your company using any of these methods to obtain relief? Let us know in the comments below how your organization is managing fuel budgets in times of fluctuation.
Posted 8/1/2013 4:24:20 PM
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Tags: business driving
, business travel
, gas prices