By David Savage, chief revenue officer, Lightfoot

The fluctuation of fuel and energy costs can be immensely difficult for commercial vehicle fleets to manage, especially when influenced by outside forces.

Some of these are global effects created by war, supply and geopolitics. But some are closer to home. There are several suspected financial impacts on the fleet industry in the Autumn Budget tomorrow too. So what could really hit businesses?

One is the restoration of the 5p fuel duty cut originally introduced in 2022. The Competition and Markets Authority (CMA) says the disparity between wholesale fuel prices and what drivers pay at the pumps is at a record high, and some experts believe restoring the 5p cut will have little effect on prices as it will be absorbed by the retailers. Some are less sure.

The other is instigating a pence-per-mile road tax for electric cars. While all vehicles should be taxed fairly, implementing a pay-per-mile scheme for electric cars risks sending the wrong message and inhibiting growth in the sector. It also adds another variable cost which fleet managers are now struggling to control.

Whether this happens or not, the concept that a government can arbitrarily add a cost like this means fleets have to constantly be on their guard about how they manage what they pay to power vehicles.

In the case of EVs, the situation needs managing because of various wildly differing scenarios. It could cost 5p per kWh to charge at home, or nearly 20 times that on the road. Fleets need to be able to see when their vehicles are charged, for how long and at what tariff so they can ensure charging is completed as efficiently and cost effectively as possible.

The unpredictability of recent years shows how difficult the cost of fleet operation is to plan for. For instance, in the last five years, petrol prices have ranged from 106p to 191p per litre, while diesel has fluctuated from below 112p to a peak of 199p. And in the decade before that, there were similar variations. The one thing you can rely on with fuel prices: you can’t rely on them, then, now, or in the future.

These huge fluctuations in fuel costs can happen without much warning, and quickly too, causing major financial implications with the potential of wiping out profit margins.

So, how do fleets respond to this uncertainty?

Doing nothing can be expensive. A fleet of 500 vehicles, each driving 30,000 miles a year at 35mpg, would spend over £2.5m on fuel at 120p per litre. When prices hit 199p, that bill would have skyrocketed to nearly £3.9m.

Fleets are struggling to stay on top of variable and unpredictable costs, and in an uncertain climate, there’s not many ways for companies to control these factors. Instead, fleets are trying to control the only factors they can, such as improving driver behaviours to become more efficient. This could mean becoming more fuel-efficient, reducing downtime and increasing EV range.

Clients report to us that with Lightfoot’s driver coaching technology applied, they are regularly seeing fuel economy improve by up to 15%, climbing from 35mpg to 40mpg. At 130p per litre this means that a 500-vehicle fleet’s annual fuel bill drops to just over £2.2m – a saving of nearly £300,000.

Then, in terms of electric vehicles, we can monitor where they are charged and how they are used, including keeping track of activities that unnecessarily use too much energy, as well as coaching the driver to drive more efficiently. The result is increased range by up to 15%.

This improved efficiency creates a financial buffer for fleets, helping them absorb price shocks and varied pricing models without jeopardising operations. It also gives them flexibility at a local level, supporting drivers who need further training, and removing the need to micromanage them.

As well as enabling fleets to budget and forecast better, it helps with electrification. While many commercial vehicle fleets are grappling with how to make this happen, Lightfoot can help identify which vehicles and routes would benefit from electrification, while coaching drivers to maximise range. And for those not ready or unable to switch, adopting the recommended changes will ensure a fleet is driving to maximum efficiency.

Unfortunately, no matter what comes from the Budget, the next few years are likely to be unstable with many uncontrollable factors.

So, for fleets it becomes a case of controlling the controllables, and one way to do this is helping drivers to drive more efficiently. As we’ve seen, using real-time coaching and gamification through incentives can achieve real-world success, insulating as much as possible your business from outside economic forces, whether at home, or abroad.