- 10
- MAR
- 2011
'Slow steaming' on the roads: reducing fuel and fleet costs
Author: Jonathan Webb - Categories: CSR & Green
Countries are lowering speed limits to preserve oil supplies. Can companies do the same?
It appears that high oil prices are here to stay. Older oil-dependent practices are simply too expensive to maintain. Procurement is best placed to prepare businesses for this change.
Spain has recently reduced the speed limit across the country to 110 kilometres per hour (68 miles per hour) from the previous limit of 120 kilometres per hour (75 miles per hour) in a bid to maximise national oil reserves. A similar practice has long been in use in the marine industry.
Many ocean-bound steamers have employed a 'slow steaming' method on the high seas, which preserves fuel. Maersk has recently ordered the construction of three of the world's largest vessels, which are specifically designed to cruise at slower speeds.
Can we take a similar approach when it comes to road transportation?
Most cars' fuel consumption reaches an optimum level at between 80 and 88 kilometres per hour (between 50 and 55 miles per hour). At higher speeds, the rate of fuel consumption increases.
Although many logistics companies impose speed limits of 50 miles per hour on their heavy goods vehicles, further use of this option is seldom made. Perhaps fleet, purchased taxis or couriers could be similarly limited to reduce fuel costs. Moreover, this would reduce organisations' carbon footprint and improve corporate social responsibility scores.
Perhaps procurement could mandate that all company cars be similarly restricted to the 'optimum speed' of the vehicle?
Comments
Tudor via LinkedIn
Fri 11 Mar 2011 10:53
The long term result of this may be speed limits of 60 , 40 or 30 miles an hour. How far would this be taken logically. It would be better long term for the vehicle manufacturers to start designing cars to be more fuel efficient. Unfortunately this only happens when people stop buying. The solution is also not electric vehicles. It may be cheap now but I bet it would quite quickly become just as expensive. Revenue collection rules! Isn't the current overall tax on petrol running at 189 %
Jonathan Webb
Fri 11 Mar 2011 11:14
It seems a grave future indeed. Given the inelasticity of demand for petrol, people seem to continue buying petrol regardless of the amount of tax.
The UK already has residential speed limits of 20 mph - and perhaps we'll see similar roll-outs elsewhere in on the road system. But, should fleet procurement managers take the lead on the 'go slow' approach? If the slowdown is coming, surely companies can take advantage of the potential savings before oil prices become excessively high?
Rafael Pinto
Sat 12 Mar 2011 20:51
Woudn't this generate a larger fleet in companies and have the opposite effect?
TWstroud
Sun 13 Mar 2011 14:42
Joining Rafael's concern - this may lead you to bulk up on more inventory.
You need a fatter pipeline with a slower flow. The steamships have used this method to constrain supply (even while increasing fleet size) to firm up rates. One immediate result: container shortages.
Ian Wright
Tue 15 Mar 2011 15:25
I think we are missing a point here. Why not have more to flexible working so that there is no need to make the daily commute and just WebEx or Vid conference into the meeting. It will also allow's for better car sharing as you'll co-ordinate the travel dates. Most efficent way of reducing fuel consumption is not to use it at all.
Jonathan Webb
Tue 15 Mar 2011 15:39
Interesting points from everytone.
TWStroud, the shipping industry partly cut back on capacity because of the massive drop in demand - Maersk for instance, experienced losses last year, and it beginning to invest in new ships.
Ian, undoubtedly, tackling the issue is a matter of demand management. However, people will be reluctant to wean themselves off their easy habits of the past. Perhaps slow steps, like reducing speeds, might force business travellers to seek alternatives?