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The cost of running a haulage company is higher than ever. Low margins, wage rises, and fluctuating fuel and energy costs, coupled with interest rate hikes, have compounded the post-pandemic industry slump. In November 2023, a report produced by accountancy firm Price Bailey found that 463 haulage businesses had gone bankrupt in the previous 12 months. Sadly, this number has been on the increase since 2020, and the yearly rate of collapse has more than doubled since then.
With margins already paper-thin, Jamie Bridgen, CEO of The Fuel Store, explores how incremental changes can help operators to save money.
Fuel costs
As a heavily fuel-dependent industry, haulage is particularly susceptible to fluctuations and spikes in fuel costs. 2023 saw diesel prices spike to record levels, with geopolitical tensions exacerbating price uncertainty into 2025, making it hard for operators to manage cash flow.
According to the Society of Motor Manufacturers and Traders (SMMT), the average HGV with a payload of 26 tonnes achieves fuel consumption of 30 litres every 62 miles. For HGVs averaging an annual mileage of 74,500 per year, the annual fuel expenditure sits at just over £36,400 per vehicle.
“While not a magic bullet, corporate fuel cards can help shave a significant chunk off fuel costs, as well as saving time on expense management. In 2023, the average saving for our fuel card holders last year was around 12.5 pence per litre. Using the average HGV mileage from the SMMT, that equates to around £4,500 per HGV. Multiplied across the fleet, the savings soon add up.” Jamie explains.
Data-driven driving
By understanding the data that can impact fuel consumption, fleet managers can build a picture of driver behaviours, and identify areas for improvement and/or training. As well as reducing unnecessary fuel usage, promoting more efficient driving habits can impact safety and downtime caused by vehicle maintenance, all of which impact your bottom line.
“With driver shortages impacting efficiency, and costs escalating, taking a deep dive into fleet data can help fleet managers to identify actionable insights that have a direct impact on the company’s bottom line. All of our fuel card customers get access to an online portal, which provides access to data such as fuel spend and usage, transactions, card and budget management tools. They can also access time saving tools such as a fuel pump locator, and HMRC compliant invoicing which takes the pain out of expense management.” Jamie explains, “Those looking for deeper business insight can opt to add software called Fuel AI – a handy tool that can combine and analyse a host of data, helping fleet managers to quickly identify trends. Having access to this data can support data-driven decision making, which, when used to its full potential, can save as much as 9% off fuel costs.”
Meeting regulatory challenges
In addition to financial constraints, the haulage industry is subject to a host of regulations including vehicle emission standards, maximum working hours directives for drivers, and health and safety requirements. For HGVs and vans, the DVSA has strict regulations about checks that driver must carry out – with both drivers and operators sharing the responsibility. With DVSA officers tasked with spot checking vehicles, those who don’t comply will be subject to fines, and can be taken off the road – both of which can cost firms dearly.
Jamie continues, “The DVSA does offer a printable checklist. But, as any business owner knows, the more paper based systems you use, the more likely you are to fall foul of non-compliance and lost paperwork. And, with the DVSA requirements covering 27 different checks – from mirrors and windscreens, to lights, guages, steering, brakes, oil, loads, coupling, electrics and many more – things can be forgotten. Digitising the process takes a huge amount of pressure off both fleet managers and drivers.”
To meet this need, tools such as Driver Toolkit from The Fuel Store provide digital checklists. Fleet managers simply send drivers a QR code, drivers complete the checks on the digital platform, and submit the result. As well as ensuring safety and compliance, fleet managers have a record of results, and data can be easily retrieved in the event of a DVSA roadside check. The system can also be used to save and recall regular driver licence checks.
“While this may not seem like an immediate cost-saving measure, the risks of non compliance are incredibly high,” Jamie continues. “Like any of these risks, prevention is better than cure. Conducting and recording these checks stands to save your business from the cost of downtime and fines in the future.”
Consider card fraud
During July-September 2023, the DVLA received over 39,000 requests for information on drivers thought to be guilty of fuel theft – 77% more than 2022. Cases of fuel theft have been numerous in recent years, from a bin lorry driver who stole £42,000 of fuel, to a delivery driver who stole more than £56,000. While some cases involve huge amounts of money, others can be as simple as drivers using cards to top up personal vehicles – but the amount soon adds up.
The Fuel Store’s Fraud Guard product protects customers from this kind of threat – customers report lost and stolen cards, or flag any concerns, and the team will investigate. If there’s an issue, the team will investgate, and customers will be reimbursed for the cost of any fraudulent activity.
The right tools for the job
Fleet management is a complex undertaking. Just like any other job, having the right tools to hand can make everything run more smoothly.
“I started The Fuel Store in 2013 to offer UK businesses access to cheaper fuel. Today, we have unrivalled forecourt coverage, unbeatable customer service, and a great reputation for saving our customers time and money. We’ve moved beyond supplying fuel cards, to providing our customers with some fantastic tools that ease both the financial and the administrative burden of running a fleet.” Jamie enthuses.
“There’s no doubt that the haulage, transport and logistics industry is under pressure. Sustainability, digital transformation, e-commerce trends, risk management and workforce management will continue to drive change. Our team knows the sector inside out, and we are here to help our industry partners to seek out efficiencies which, however small, could make all the difference to the road ahead.”