How Fleet Managers Can Manage Fuel Costs

1. How Fleet Managers Can Manage Fuel Costs AFLA Conference Sept. 11, 2009 Jim Lodestro Pricelock, Inc.

2. Fleet Fuel Costs • Fuel is typically the #2 cost item in any fuel budget • Fuel is a variable cost – and subject to significant volatility • When fuel prices reaches between $3.25 - $3.50/gal – in many cases it becomes the #1 cost item in the budget • On average it represents between 20-40% of any given fleet budget • Fuel cost is the #1 item that fleet managers feel are ever increasing & not controllable

3. Issues With Fuel Price Volatility • Fuel price swings creates a budgeting and planning nightmare • Fuel expense creates significant financial risk and exposure • Create organizational stress – huge financial drain

4. Fleet Fuel Price Protection – Consider ItDeath, taxes & volatile fuel prices… • Fast becoming a Strategic Best Practice • Less than 25% of fleets current consider or use it in some shape or form • Proactive Partner with Finance • Provides ability to confidently budget and plan • Risk Mitigation • Minimizes fuel expense risk and caps financial exposure • Competitive Weapon • Provides ability to undercut competition – “fixed” bids/contracts • Cost Effective • Similar in many ways to Fire, Liability, Collision, D&O protection

5. Customer Case Study – Commercial Fleet • Fuel Price Protection is critical to managing the budget & overall spend • Fuel is now effectively a ‘fixed cost’ in Budget • Minimal financial exposure • Dramatic impact on their LT contracts – believe they have significant competitive cost advantage