An investigation into the economics of fuel management in the freight logistics industry

Abstract

The transport and logistics industry has to confront many challenges to achieve the objective of efficient distributed operations, such as vehicle and cargo traceability and security. Research has identified effective fuel management, including fuel theft, as a major concern within the road freight logistics industry, as fuel expenditure constitutes a significant portion of the running costs of transport operators. In this paper we propose a telematics architecture that not only addresses the needs of the road freight logistics industry for effective fuel management, but that can be integrated into a common infrastructure to be used for other management functions as well. We estimate the cost of the proposed fuel management concept and develop an economic model to investigate the financial viability of its deployment. Using this model we determine the required level of fuel savings to achieve a positive cost-benefit for the proposed system and demonstrate that this should be practically achievable against the background of actual fuel losses experienced in this indust