What Is Fuel Management? 6 Best Practices

Efficient fuel management is fundamental to long-term success in the transportation industry. As fuel costs fluctuate, sustainability rises in importance, and supply chains face continuous scrutiny, transportation leaders seek innovative solutions to reduce fuel reimbursement inefficiencies and enhance accuracy, all while staying within budget.

Fuel management is a strategic necessity that combines cost control, efficiency, and sustainability to drive success.

What is fuel management?

Fuel management refers to the process of monitoring and optimizing energy consumption within transportation networks. For shippers, it considers a variety of factors including the time, price, tax, and geography of a shipment to ensure you are paying only for fuel that is consumed during actual freight movement—not for extra costs attributed to inefficient practices or ineffective surcharge programs.

Fuel management programs should integrate with all modes and energy types to provide a comprehensive solution for managing costs and improving operational efficiency. It’s a growing field; the fuel management system market is expected to grow from $1.24 billion in 2023 to $2.07 billion by 2030, reflecting the increasing demand for fuel efficiency optimization and fleet management.

What are the benefits of fuel management?

Accurate and efficient fuel management is a critical component of modern transportation operations. Fuel management drives cost savings, improves efficiency, and supports the transition toward more sustainable logistics practices. By carefully monitoring and optimizing fuel consumption, transportation leaders can build a strategic fuel management program.

1. Reduce costs

Smart fuel management takes into account key factors like time, tax, price, and geography to calculate an accurate, market-based fuel reimbursement. Transitioning from a national average fuel index to a market-based fuel calculation allows shippers to align more closely with the actual fuel costs carriers incur, ultimately safeguarding their bottom line.

2. Improve efficiency

By aligning fuel reimbursements with industry benchmarks for class 8 truck fuel efficiency, shippers can create more fair and transparent partnerships with their carriers. While efficiency metrics will naturally vary based on equipment and geography, leveraging accurate data to reflect carriers’ actual performance ensures reimbursements are aligned with real-world operations.

3. Support sustainability goals

With global and consumer pressure to reduce carbon emissions, fuel management plays a pivotal role in achieving sustainability targets. By using load-level emissions tracking to pinpoint and address high-emission areas, transportation leaders can cut their carbon footprint by up to 6% in emissions intensity within their first year on the CleanMile program.

These benefits underline the critical need for a strategic fuel management program. But what are the best practices for implementing and maintaining such a program?

6 best practices for fuel management

Adopting the following best practices for fuel management can set your organization up for success.

1. Adopt a market-based fuel reimbursement program

By shifting to a market-based fuel reimbursement model, you can calculate fair and accurate payments based on real-time prices instead of weekly averages. This approach mitigates risk in turbulent fuel markets and provides a fair reimbursement structure.

2. Increase fuel efficiency

Improving fuel efficiency is a smart and impactful way to reduce costs and cut emissions. With insights driven by a trusted, strategic transportation partner, shippers can align their freight movements to industry benchmarks. This allows them to add an extra layer of oversight to their fuel management strategy.

3. Implement fuel price risk management strategies

Fuel price volatility presents a challenge for shippers—but a robust risk management strategy minimizes exposure to market volatility by securing a fixed fuel price, tailored to the location and timing of your freight movements. The implementation process can be quick and easy, especially if you are already a Breakthrough Fuel Recovery client!

4. Manage your fuel surcharge program

Refining your fuel surcharge program to separate base rates from the linehaul rate is essential to gain greater visibility of each component. Leveraging a zero-base rate strategy empowers you to eliminate operational inefficiencies and enhance your fuel management strategy.

5. Optimize your routing guide with AI

Utilizing AI-enabled tools to uncover freight efficiency opportunities is a game-changer for a robust fuel management strategy. AI-driven solutions can analyze millions of data points to optimize freight routes, suggest more fuel-efficient carriers, and reduce empty miles.

6. Reduce emissions for sustainability

Focusing on emissions management positions your company as a leader in sustainable transportation. Leveraging transportation emission management tools ensures your sustainability goals are met without sacrificing operational efficiency.

Improve transportation operations with Breakthrough

Fuel management is more than just a cost-cutting measure; it is a tool to future-proof your transportation strategy, ensure transparency, and stay competitive within an evolving industry.

Breakthrough empowers shippers with innovative and data-driven solutions to streamline their operations and tackle inefficiencies head-on. From market-based fuel reimbursements to advanced emissions tracking, our tools deliver industry-leading insights to optimize your approach to fuel management.