RADIO ACTIVITY

Mar 01, 2002 10:30 PM  By

Radio frequency has begun to revolutionize warehouse operations, and its application to truck fuel management is no exception. When fuel management systems first came on the scene more than a decade ago, they were touted as the solution to employee theft as well as an easier way to keep records. Now, RF-enabled systems allow managers to go way beyond their original intent.

Currently, most truck fleets use a combination of several different technologies, including magnetic stripe cards, smart cards, or keys with imbedded magnets or chips. These devices must be inserted before fueling, and the medium — either card or key — is pegged to the driver. Each time a driver pumps gas, a computer tracks the driver, time, date, and how much fuel has been distributed. The driver logs in his vehicle number and odometer reading by using a keypad. “Our drivers used to fill out a fuel ticket,” says Cathy Baker, transportation support supervisor at Hudson Transportation Inc. in Troy, AL. “Now they use the key to fuel up, and I can download the information to my computer system and track it.”

Hudson installed the key system when it upgraded its underground storage tanks about three years ago, in accordance with Environmental Protection Agency regulations that required all tanks over a certain age to be replaced. The company has 51 trucks and 80 refrigerated units.

Tracking fuel consumption by vehicle allows Baker to check the miles per gallon and in-service hours for each truck, and to decide which trucks need servicing or an overhaul, based on performance and hours. She also uses the data to track fuel tank inventories on the company’s two 25,000-gallon tanks to facilitate re-ordering. “We also can track missing fuel, but so far we haven’t had a problem,” she adds.

False notes

Even when intentional theft is not an issue, inaccuracies are. Because so many fleets use fuel records to schedule preventive maintenance, errors in odometer readings and errant fuel mileage can be costly. “Odometer errors impact our repair schedules,” says Larry D’Agostino, transportation analyst at Temple, TX-based McLane Company, a subsidiary of Wal-Mart. “When drivers entered their unit numbers and odometer readings, we got a lot of wrong data.” He says that drivers made errors because they were in a hurry, tired, or simply hit the wrong key because they were wearing gloves. In addition, drivers often got behind in their entries; maintenance that should have occurred didn’t. That led to poor mileage and sometimes breakdowns.

McLane was able to resolve these problems once it began switching from a FleetKey system to a Fuel Point RF system from Lansdale, PA-based Gasboy International Inc. about a year and a half ago. D’Agostino adds that the new system also did away with the need for dedicated fueling personnel.

RF systems work like this: A driver pulls up his vehicle to the gas island and inserts the nozzle into the filler cap. A tiny transmitter in the filler ring sends a signal to the nozzle telling it the vehicle identification number and the odometer reading. When this information is verified, the fuel flows. When the driver is finished fueling, the amount of fuel consumed is sent to the company’s record-keeping computer, where it is logged. And here’s the best part: The driver does not have to make any entries or keep any records. He doesn’t even have to sign anything.

Moreover, because the RF transmitter and the nozzle must be within a few inches of each other for the pump to work, it’s impossible to fill a non-authorized vehicle or gas can. “The nozzle must touch the filler ring,” says Frank McGoogan, director of marketing for Syn-Tech Systems Inc./Fuelmaster in Tallahassee, FL. Syn-Tech markets an RF system as well as traditional card and key systems. “It takes the driver out of the loop. He doesn’t have to do anything but fill the tank. He doesn’t need a card or a key.”

Pumped up

Another benefit of the RF system is that it can prevent fueling mistakes. For example, a diesel nozzle is larger than a gas nozzle so you can’t mistakenly fill a gas vehicle with diesel. However, you could fit a gas nozzle into a diesel tank, according to Greg Mierzcwa, sales support coordinator for Hodgkins, IL-based Petro-Vend, which offers a Fleetlink RF system. “This eliminates a person putting the wrong fuel in the tank,” he says. RF systems also are safer, because the nozzle shuts off immediately if it falls out of the filling pipe.

The cost of upgrading from a magnetic or key system to RF is several hundred dollars per unit, but to Mike Coleman, fleet manager of Great Bay Distributors Inc. in Tampa, FL, an Anheuser-Busch product distributor in the Tampa Bay area, the cost was worth it. “There is absolutely no chance of theft,” he says. “The most important thing is that we can get an exact cost per mile for our vehicles so we can see if they’re performing properly.”

The company has about 200 vehicles at two different locations, Largo and Holiday, FL. Each night, its main computer polls the pump islands and downloads fuel data. Because of its high accuracy, Coleman also uses the data to order fuel automatically for his three tanks. “It saves me time and money,” he says of the Gasboy system. “Our previous swipe card system [from a different company] didn’t work well at all.” Coleman says his next upgrade will be to offer the data on a network instead of having to use a dial-up connection.

Because the data from RF systems is as accurate as technologically possible, companies feel more comfortable using it to do more than they did with their older systems. Ken Rankhorn, a key-punch operator who is in charge of fuel reports for Gold Kist Inc. in Live Oak, FL, relies on the RF data generated by Syn-Tech’s Fuelmaster system to produce individualized reports. “Every department wants a different report, so I can vary and customize reports. Previously we used magnetic strip cards, and it would let drivers ‘cheat’ on mileage, so we didn’t get accurate data.” His company, headquartered in Atlanta, is a $1.7 billion sales cooperative whose members in Georgia, Alabama, Florida, and North and South Carolina produce more than 14 million chickens per week.

The data is so accurate, in fact, that results for fuel inventory control for the unit’s two tanks totaling 24,000 gallons are remarkable. “We are within three gallons a month,” says Rankhorn. Another benefit: Because different trucks pay different tax rates, the RF system can easily keep track of it all automatically with simple programming.

Magnetic attraction

While more fleets are switching over to RF systems — currently, fewer than 10% have installed them — magnetic cards and keys are still cheaper, and they can be used outside the company’s main pumping island. “Many fleets still like magnetic stripes if they fuel at public places,” says Kent Robinson, director of marketing for Gasboy. Also, because all three systems — magnetic stripes, keys, and RF — can be integrated into one data collection system, a total changeover is not immediately required.

Robinson sees a trend toward less expensive RF systems and a greater role for sending data over the Internet, which will speed the transition to the more accurate data obtained via RF. His company will introduce a system that connects to the Internet so managers can monitor fuel consumption and storage tank inventory from anywhere using an Internet connection. Gasboy’s Infinity system will also allow managers to receive fax, e-mail, or pager notification of key events such as a pump breakdown. Such a system could be configured to call automatically for service. “We’re also going to have a camera option that can take pictures of a site transaction,” says Robinson. This would enable a visual record of a driver fueling his vehicle as well as recording the data.

RF systems could eventually be tied to a truck’s engine diagnostic network, thereby allowing companies to download real-time performance information while a truck idles at the fueling island.

While all of this technology bodes well for managers, what about drivers? “Drivers really like the RF system,” notes Rankhorn. “All they have to do is fuel and drive.”

Larry Kahaner is a business writer based in Washington, DC. He can reached at larry@kahaner.com.

Wrong Wavelength

RF-based fuel management systems are a great way to handle transportation more efficiently, but research indicates that many companies need a lot more than that. In a study released in January 2002 by The Logistics Institute at Georgia Tech, 65% of companies operating private and dedicated truck fleets say that with better planning, they could save their firms 6% to 30% in transportation costs (cost savings rank high in importance). However, they are reluctant to adopt the technologies that can help them do so. More than 60% of the respondents use a manual process for route planning, load building, dispatching, and tracking, and 42.9% of companies with less than $10 million in annual transport costs say that their ideal method of transportation planning would be manual.
RR

TRUCK TRANSPORTATION PLANNING
Ideal Method Less than $10M (n = 35) More than $10M (n = 38) Total (n = 73)
Manual 42.9% 13.2% 27.4%
In-house/custom software 31.4% 42.1% 37.0%
Customized commercial software 22.9% 39.5% 31.5%
Outsourced 2.9% 5.3% 4.1%
(4 = highest, 1 = lowest; mean scores shown)

Source: The Logistics Institute at Georgia Tech

IMPORTANCE INDEX
Truck Transport Expense Route Efficiency/Cost Savings Customer Service Backhauls Driver Satisfaction
Less than $10M (n = 20) 1.85 1.40 3.60 3.15
More than $10M (n = 27) 2.07 1.33 3.37 3.22
Total (n = 47) 1.98 1.36 3.47 3.19