Oiling those troubles
Fuel is one of a transport operator’s greatest expenses. JACO DE KLERK investigates what impact this important issue has and looks for possible remedies…
Stress is one of those things we just can’t get rid of: It motivates us when we’re under pressure and contributes to sleepless nights more often than not. And one profession that certainly experiences high levels of stress is that of a transport operator. They certainly have enough on their plates with issues such as changing legislations, safety concerns, delivery deadlines and theft. However, rising fuel prices is somewhat of a fiend on its own…
The severity and impact of ever-escalating fuel prices surely leaps out when you consider how much fuel transport operators are using. Van Wettens Breakdown Services (Van Wettens) reports that it is currently using 110 000 litres each month and Transvaal Heavy Transport (THT) 130 000 litres, which places the recent increase of around – 30 c/litre into a new light.
Transport companies’ earnings from income-generating vehicles are directly linked to monthly fuel escalations, but an entire fleet (income-generating plus those for other uses) suffers when prices are on the rise, increasing operating costs overall. For Van Wettens, fuel represents 21 percent of its turnovers and 39,5 percent of its direct costs.
As Abe Uys, executive director of Crossroads, says: “Depending on the type of operation, fuel can represent up to 45 percent of our rates. If we’re unable to recover price fluctuations from our customers it impacts severely on our profitability.”
Adding to the stress and hindering planning is the uncertainty of whether, when or by how much fuel prices will rise in the future, which sparks vast debates in the transport sector. Sampie Swanepoel, managing director of THT, predicts oil prices will rise to US$ 150 (around R1 157,00) or even $ 200/barrel (R1 543,00). “It’s like predicting the Lotto numbers for next week’s draw,” comments Pieter Pretorius, general manager of Van Wettens, after being asked what he foresees for oil prices. However, prices may continue to fluctuate, escalating with an upward spiral over time.
With such uncertainty and instability about oil prices, would operators consider alternative fuel sources – such as bio-fuels – to alleviate the impact of its fossil alternatives? Bio-fuel is produced from biomass and considered to be a much cleaner fuel than petrol or diesel. This fuel source is considered to be carbon-neutral, as the biomass absorbs roughly the same amount of carbon dioxide during growth as it does when it’s burned. However bio-fuel isn’t as innocent as it seems, as in many cases large areas of forest are cut down to make space for the plantation of bio-fuel suitable crops. That deforestation may harm the natural carbon cycle. One thing is certain – alternative methods for powering vehicles and machinery or in producing bio-fuels will need to be considered.
Another alternative is to use “greener” engines with greater fuel economy. Currently there are Euro 5 engines available in South Africa. The biggest factor determining the growth of these vehicles on South African roads is the quality of fuel available nationally and in neighbouring countries.
Swanepoel says cleaner fuel must be produced by 2015 or 2017, which will enable the use of greener engines. Hybrid trucks can also increase fuel efficiency up to 20 percent.
The total spend on fuel during the lifetime of a vehicle is three to four times the original capital spend when buying the vehicle. It may be argued that vehicles with advanced electronics are better suited for long-distance tar roads than for off-road applications. These are some of the tests to be conducted before transporters could consider moving over to modern technology.
It would seem the battle against rising fuel prices is something of a losing one, with external forces influencing the methods that could be used to fight the good fight. However, there is something every operator can do to alleviate some of the strain caused by soaring fuel prices – lube up.
Lubricants used to be just lubricants back when engines were simpler – you could use one product for multiple applications. However, with greater sophistication in technology came the need for more refined products. “As vehicles develop, so does motor oil. Ongoing formulation and research ensures less energy is used, less CO2 is emitted and that fuel consumption is optimised – without compromising on performance,” says Melicia Labuschagne, general manager of Liqui Moly SA. “However, it’s not about using any lubrication but about using the correct ones. The quality of fuel in South Africa isn’t of a high standard and fuel supply countrywide isn’t always consistent in quality. Low quality fuel contributes to clog up or dirty fuel systems and that leads to higher fuel consumption and lowered performance.”
Failure to use the correct oil will result in increased engine wear, decreased performance, greater build-up of deposits and a higher risk of a vehicle breaking down – including increased fuel consumption (aiding rather than battling rising fuel prices). “Mineral oil is no longer the oil for new generation vehicles, with no benefits when it comes to start-up, energy saving, performance or fuel consumption,” says Labuschagne. “High quality oil, such as synthetic and hydrocrack formulations – which provides similar performance as synthetic fuel, but is cheaper to produce – is becoming increasingly popular. Mineral oil may still have the biggest share but isn’t able to deliver the performance that modern engines need.”
Synthetic oils may also deliver greater advantages in newer vehicles. This oil is engineered to do the job of a conventional lubricant, perhaps even better, as they can be specifically designed to fulfil a particular need. The fact remains that these types of oil are a bit more expensive but can offer significant performance advantages – remaining stable in extreme temperatures. They also possess viscosity characteristics superior to those of mineral oil, with a molecular structure that meets and often exceeds manufacturers’ criteria for high-performance engines.
Labuschagne says: “Oil is not just oil. We all pay the same for fuel. Know the correct oil for your vehicle, pay for the right quality and the money you’ll save on fuel consumption will far exceed the difference between the price of bad oil compared to that of a good quality one.”
There’s also a final line of defence operators can utilise – fleet management. As the sayings go: “Prevention is the best cure” and “knowledge is power”. Autotrak Vehicle Management Solutions can help you monitor your fuel usage and even possible fuel theft. The company provides a standalone product with features that include the identification of fuel theft in real time, the recording of fuel tank fill-ups and the calculation fuel consumption per trip. That will place any operator “in the driver’s seat” when it comes to their fleet’s fuel usage – providing vital “intell” for the war against escalating fuel prices.
So in an industry in which a plate overloaded with stress and uncertainty is commonplace, operators have to hold their heads high and push forward. Things will always be tough – that’s just one of life’s realities. However, doing the little things may make life somewhat easier.