For businesses involved in the oil industry, there are a certain set of challenges that they face which are beyond their control – i.e. the political and geo-economical factors that affect the sector.
The oil prices determine the operations of the oil businesses, irrespective of the role they play in the extraction and distribution of the material.
When the prices hit a massive low, oil extraction companies are forced to assess a critical situation where their production cost exceeds the market value, rendering them at a loss. In the case of the oil refinery and distribution companies, the impact is slightly minimum as they have the opportunity to sell the oil at premium rates. And as for large oil corporations, their extraction operations are massively affected which they compensate at some level through their distribution channel.
Such volatile nature of the oil and gas sector has made companies desperate to identify ways to protect their revenue and control operational costs through increased transparency. So how can you gain operational visibility to improve performance efficiency and profitability? Let’s find out.
How fleet management software can cut down costs
One of the most commonly practised cost-reduction strategies implemented by businesses are employee layoffs and unwillingness to take up more work – But, is this the most effective way to make ends meet? Not quite.
Fleet management software does more than just show where your vehicles are – from analyzing the revenue earned by keeping the vehicles on the road to knowing which aspects of your operations are draining your profits, you have a 360-degree understanding of your operations.
Here’s how fleet management software helps in eliminating unnecessary costs.
Reduce fuel expenses
Irrespective of the industry, every fleet business faces the inescapable cost, i.e. fuel. Without proper planning and supervision, businesses can waste huge portions of their revenue. Did you know that,
- An hour of engine idling can waste up to a 1 gallon of fuel.
- Excessive speeding and harsh braking can reduce vehicle mileage
- Improper route planning can lead to increased distance and unwanted fuel consumption.
With effective fleet management, you can plan smarter routes. By avoiding roads with heavy traffic and choosing the shortest route, you can minimize unwanted engine idling and fuel consumption respectively. Additionally, by monitoring driver behaviour, you can reduce the impact of aggressive driving on your fuel usage and mileage.
Minimize accident costs
Did you know that the accident rate for commercial fleets is 20%? Most businesses spend thousands on compensation fee and vehicle repair costs. Most importantly, within the volatile nature of the industry, the employees’ lives are at risk. Fleet management software helps you in overseeing driving behaviour, phone usage and monitoring driver fatigue and drowsiness to reduce avoidable accidents.
Lower vehicle maintenance costs
Given the harsh climatic conditions of the middle eastern region, there’s a constant threat to your vehicle condition. Where improper tire pressure can lead to a blowout, the hot temperature can damage your battery condition. So it becomes increasingly important to maintain your vehicles in the best condition to prevent exorbitant repair costs and reduced lifecycle.
The fleet management platform can help in scheduling preventive maintenance in a way that doesn’t disturb your daily operations. From checking your tire pressure, coolant, battery condition to planning an oil change, your business can schedule regular maintenance to avoid unnecessary costs.
To sum it up
Adopting a fleet management software can provide innumerable benefits to the oil and gas industry. With a better understanding of your fleet operations, you can improve cost efficiency and, in turn, keep your profit margin steady, irrespective of the external factors that affect the industry.
Talk to our fleet experts today to see how MoveX can help your business.