Posted by Jack Lee
Tue, 12/15/2009 - 17:54
Longer fuelling time costs you more and cuts into productivity
aussi disponible en français: http://tinyurl.com/ybxfjyv
I remember starting my working career as a kid, my employers told me what I was worth. At the time I think it was around a buck or two an hour. As time went on my “working-worth” increased steadily until I became an entrepreneur, then my value grew as a direct proportion to managing costs. So, I had to work smarter, not harder. Today that challenge continues for me, our associates and valuable clients.
Some costs you can’t control, but labour costs can be contained particularly when it comes to refuelling, if you work smarter. In a recent study of leading transportation companies across Canada, the average time to fuel at commercial stations has increased by 50%. What used to take truckers 30 minutes now takes 45. And I know this number is low for bigger cities where you sit in traffic longer.
What about your drivers who waste time on the phone, make a restroom stop or decide to pick up a quick cup of coffee? But for purposes of argument lets stick with 45 minutes per refuelling session; 15 minutes longer than we expected. That’s a 50% increase in time, and a 50% increase in hourly labour costs.
When you waste time working, you are wasting money. It’s as simple as that.
This measurement considers the total amount of unproductive time spent getting fuel per truck per day. The clock starts when the truck leaves its route to find a fuelling station, waits in line, adds fuel to tanks, completes the transaction and returns to its route.
The study was conducted through personal and telephone interviews with senior executives, owners and fleet managers of businesses in transportation, logistics and freight operating in major urban centres in Canada. It was conducted by 4Refuel, the only company in the world to develop systems for automatically tracking fuel transactions and reporting them online.
Lets do some math to show what the real cost of refuelling is when you do your own fleet filling at card-locks. For a fleet of 20 trucks you can expect to spend approximately 50 hours each week devoted to refuelling. And many of those hours are overtime hours costing time and a half or double time rates. What do your drivers earn per hour? Now do the math. It adds up to tens of thousands of dollars in lost productivity. Now, think about what you get for all those hours spent filling up, other than fuel. Nothing.
Today many companies have come to the conclusion that time spent refuelling can be re-gained and put back onto their bottom line when they use Total Fuel Management. This solution has been pioneered, developed and fine-tuned by 4Refuel Inc. the only company in the world to look at logistics, refuelling and fuel management from your perspective. Total Fuel Management includes everything from fuel procurement, delivery, to the measurement and management of fuel consumption data.
Total Fuel Management eliminates the growing labour costs associated with refuelling plus delivers valuable information to make your operations run more smoothly while increasing profits. I’d say that’s pretty good advice from a guy who used to be worth only a buck or two an hour…
Jack Lee,
President/CEO
4Refuel Inc.
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Crude above $85 a barrel and heading higher
The average price for retail diesel moved back above $3 per gallon in the U.S. compared to $2.265 just a year ago. That is the first time the $3 mark has been broken nationally since November 15, 2008.
Furthermore, AAA reports that gasoline prices are averaging some 80 cents per gallon higher than they were on this day one year ago. Five states have regular unleaded gasoline prices over $3 per gallon Those states are Alaska, California, Hawaii, Idaho, and Utah with the cheapest regular gasoline is found in New Jersey, where average levels are just under $2.67 per gallon.
Meanwhile crude oil prices have been ever steadily heading upwards towards the magic $100 mark. OPEC has been keeping a steady beat of communications about being "happy" with the average of the $75 a barrel price. They may get their wish sooner than expected as crude oil will be flowing from wells such as the Alberta oil sands at that price. But the $100 a barrel price for crude oil may once again be tested before that occurs.
The “Undulating Plateau” versus “Peak Oil” Theory
An oil expert with the U.S. Energy Information Administration, was recently quoted that “A chance exists that we may experience a decline of crude oil production between 2011 and 2015 if the investment is not there”.
This warning on oil output issued by Obama’s energy administration comes at a time when world demand for oil is on the rise again, and investments in many drilling projects have been frozen in the aftermath of the tumbling of crude prices and the world financial crisis.
Glen Sweetnam, director of the International, Economic and Greenhouse Gas division of the Energy Information Administration at the Department of Energy, does not say that investments will not be “there”. Yet the answer to the issue of knowing when, where and in which quantities additional sources of oil should be put on-stream remains widely “unidentified” in the eyes of the most prominent official analyst on energy inside the Obama administration.
The “peak oil” theory assumes that world crude oil production should irreversibly decrease in a nearby future, in want of sufficient fresh oil reserves yet to be exploited combined with an ever increasing demand for fuel by the world.
The Obama Department of Energy now supports the alternative hypothesis of an “undulating plateau”, which states: “Once maximum world oil production is reached, that level will be approximately maintained for several years thereafter, creating an undulating plateau. After this plateau period, production will experience a decline.”
Green light for the TransCanada Keystone XL Pipeline from Canada
Canadian authorities have given their blessing to a proposed pipeline project that would bring crude oil extracted from Canadian oil sands into the U.S. Gulf Coast.
A construction application for TransCanada Corp., to expand its Keystone Pipeline to reach the Gulf of Mexico, received approval from Canada's National Energy Board (NEB) on March 11. Decisions on applications for other U.S. regulatory approvals are expected by year's end.
TransCanada, under pressure from crude producers, has agreed to consider allowing conventional crude from the Bakken oil fields of Montana, North Dakota and Saskatchewan on the line.
Previously, TransCanada had resisted requests from US oil producers to ramp up into their pipeline for crude oil from those fields, drawing protests from those producers, who said there was sufficient demand for the oil. TransCanada now says it will meet with individual parties to work out the details of potential entry points to the pipeline.
Recent studies show that the Bakken Formation currently contains as much as 3.65 billion bbl of proven recoverable oil with estimates of up to 50 billion barrels still waiting drilling activities to start up; Meanwhile, Canadian oil sands hold 1.7 trillion barrels of oil, according to estimates.
Canada and US cooperating on crude oil pipeline
Robert Jones, Vice President with TransCanada, announced on March 3, 2010 in Billings, Montana that they would consider allowing the US access to the Keystone XL pipeline. It is currently being built to bring much need crude oil extracted from the Alberta Oil Sands to the US Gulf Coast refineries.
Calgary-based TransCanada Corp. will begin construction on the 1,980-mile pipeline this year making a $12 billion investment.
The company previously had rebuffed calls to build an "onramp" for crude oil from the Bakken oil fields of Montana, North Dakota and Saskatchewan, claiming there was insufficient demand.
But facing political pressure, TransCanada Vice President Robert Jones said Wednesday Keystone XL had reconsidered their position was "open for business" and would talk with conventional crude producers in the United States.
Jones made the pledge after meeting with several dozen oil company representatives, who were brought together to meet in Billings by Montana Governor Brian Schweitzer and North Dakota Governor John Hoeven.
Governor Schweitzer had threatened to withhold regulatory approval to grant right of way through 290 miles of Eastern Montana in order to force TransCanada officials back to the table and negotiate in good faith.
Terry, my hometown, is located in Prairie County in Montana will be greatly affected by the building of this pipeline. It being built right smack down the middle of this sparsely populated 1,700 square mile area made up of Badlands and cattle ranches.
The economy of this county needs diversification away from being agricultural and will now become part of the international solution to the energy needs of the free world.
When crude supplies are plentiful but fuel prices stay up.
Statistics is the science of producing unreliable facts from reliable figures has proven to be true when it comes to the US Department of Energy inventory reports, which are published weekly each Wednesday morning. The petroleum trading community has banked in the past on those numbers to give them some kind of indication on the immediate trend for finished product prices. But as of late even when those numbers have shown big builds fuel prices have increased instead of going down as expected. It will be rocky ride in 2010 for both crude oil and fuel prices. The wild swings in finished product prices will cause the economic recovery in Canada and the US to slow down.
Shell announces cut back in oil sands production
Terry, Montana
Royal Dutch Shell is slowing its expansion into high-cost Canadian tar sands and will in the future focus on exploration of conventional deposits of oil and gas, rather than expensive, capital-intensive projects, according to their CEO Chief Executive Peter Voser.
Environmental groups have been waging an ardent campaign against the Alberta oil sands projects, protesting about their impact on air, land, water and communities. In addition concerns have been raised about the potential impacts of climate change legislation on any further exploration.
Shell has about 20 billion barrels of proven reserves in the oil sands projects, which represents almost a third of Shell's total resource base. The overall picture may become clearer once crude oil becomes scarcer and the price goes back over $100 a barrel.
The Shell Alberta oil sands project was originally driven by the economics created by the 2007 and 2008 run up to $147 for crude oil prices. The subsequent collapse for crude oil prices and slow recovery of the world wide depression caused demand for fuel to decrease and high priced crude became no economical enough to use in the slate of raw materials for oil refineries.
Longer fueling time costs you more
When it comes to having your drivers fuel their own trucks they can go slower than cold molasses running uphill.
It's usually just another chore on their check list of things to do after they have had an exhausting day running, delivering or picking up freight. Time is money with truck fueling and maintenance checks cutting into going home to having a warm meal and some good company.
What is actually costing the drivers’ productive time and energy to be reduced is the paperwork necessary to hold them accountable for miles driven versus fuel used. Paperwork reports can cover any mistakes made during the day and reviewing those for errors by the supervisor is very time consuming.
4Refuel Total Fuel Management (TFM) can take care of those efforts with all the tools and prepares reports ready at your finger tips to help you reduce the cost of the second highest expense on your books after labor.
In cold weather a carpenter doesn't forget about his sore thumb till he hits his thumb again! Then the first hit didn't seem so bad. You can stop hitting your thumb on your equipment fueling and fuel management reports by having 4Refuel TFM handle that important function for you.