What a difference a year makes. In early 2008, spurred by the introduction of low-sulfur diesel fuel and a cut in production capacity due to petroleum plant maintenance schedules, fuel prices jumped to historic levels.
Producers scrambled just to find available fuel sources, almost regardless of the cost. Many even considered purchasing long-term fuel options. The price increase also affected product sales. Bid proposals and sales contracts contained fuel escalation clauses. Then, of course, the economy faltered.
In late February 2009, the Energy Information Administration (EIA) provided a calming forecast on fuel costs. It projected that the on-highway diesel fuel price, which averaged $3.79 per gallon in 2008, would fall to $2.28 per gallon in 2009 and rise to about $2.55 in 2010.
Producers welcome this news. Diesel fuel expenditures can be the second highest component of a producer's variable costs, trailing only cement. And while the sudden return to normal prices is welcomed, there's still the reality that fuel prices will increase.
The need for producers to invest in fuel-saving technologies continues to be real. Fortunately, our industry's manufacturers recognize this and continue to develop new products.
In January, Command Alkon, a large supplier of dispatching software, became a Certified Industry Partner of Trimble Mobile Resource Management. This agreement allows for joint sales efforts and strengthens the technical relationships between both companies. Similarly, Systech, another major technology supplier, also announced a formal agreement with Trimble.
These alliances, among others, demonstrate the opportunities producers have to cut costs and increase profitability. “To stay competitive and thrive in a tough economy, producers must maximize the efficiency of their trucks and plant operations,” says John Rabchuk, president of Systech.
Even with tight capital budgets, producers should control their fuel costs by adopting current technologies. And if saving money isn't a strong enough enticement to secure funding, how about demonstrating a producer's commitment to the environment? Saving fuel reduces a cubic yard of concrete's carbon footprint.
Going green saves green
While fuel savings are important, new technologies also allow producers to demonstrate their commitment to green construction. According to some environmental experts, saving one gallon of fuel eliminates the emissions of more than 20 pounds of greenhouse gases, such as carbon dioxide and methane. By combining fuel savings with emissions reduction, producers can adopt a win-win message for employees and customers alike.
This approach is not new. In 1996 vehicle manufacturers began installing EPA-mandated emission control systems to monitor engine performance. While a periodic testing program has been useful, the EPA recognized that these testing facilities do not evaluate emissions between the scheduled testing cycles.