Fleet Management Solution Saves Land O'Lakes $500,000 in Fuel Costs

Combination of technology and new driving technique lead to significant cost reductions.

April 16, 2008

3 min read

Everybody talks about rising fuel prices, but one company that's doing something about it is Northwest Food Products Transportation (NFPT), a subsidiary of dairy products company Land O'Lakes. Thanks in part to its adoption of a fleet management solution, NFPT saved $500,000 in one year in fuel costs.

NFPT manages a private fleet of roughly 200 tanker trucks, a contract fleet of another 300 trucks and the Land O'Lakes private fleet of 1,700 trucks. All told, the company's trucks transport 7 million pounds of milk and dairy products every day.

While the savings could be described as environmentally-friendly, they've come not from overhauling the trucks but from eliminating paperwork. Truck drivers used to spend about an hour a day on paperwork, including logging, explains Roger Nordtvedt, NFPT's general manager. "Then at the end of each day, administrative staff spent about one more hour per truck entering all the data into a central database. It was very time consuming, and we found that often, the logs were incomplete or inaccurate. During DOT [Department of Transportation] audits, we regularly had multiple logging violations. We knew we had to make a change."

Using Cadec's fleet management solution, NFPT has been able to eliminate paper thanks to electronic logging, which allows the company to now automatically track en-route data such as mileage, sudden decelerations, fuel economy and off-route driving. Each truck is now equipped with a GPS system that can identify where a driver is at any time. In many cases, the driver need only answer a "yes" or "no" question based on preplanned pickups and deliveries.

In terms of fuel economy, the use of the Cadec software has allowed NFPT to monitor how well its drivers use progressive shifting, "a driving technique that can help save fuel by ensuring that trucks are running at lower RPMs," Nordvedt explains. Drivers were brought in for training if they were having difficulty with this type of driving. The end result was NFPT was able to increase fuel efficiency by a half-mile per gallon, which represents an annual savings of $500,000 in fuel.

A collateral savings also came from a reduction in maintenance costs, due to the progressive shifting, which led to fewer brake jobs. According to Nordtvedt, maintenance costs dropped by 4.5 cents per mile.

See Also

About the Author

Dave Blanchard

Senior Director of Content

Focus: Supply Chain

Call: (941) 208-4370

Follow on Twitter @SupplyChainDave

During his career Dave Blanchard has led the editorial management of many of Endeavor Business Media's best-known brands, including IndustryWeek, EHS Today, Material Handling & Logistics, Logistics Today, Supply Chain Technology News, and Business Finance. He also serves as senior content director of the annual Safety Leadership Conference. With over 30 years of B2B media experience, Dave literally wrote the book on supply chain management, Supply Chain Management Best Practices (John Wiley & Sons, 2010), which has been translated into several languages and is currently in its second edition. He is a frequent speaker and moderator at major trade shows and conferences, and has won numerous awards for writing and editing. He is a voting member of the jury of the Logistics Hall of Fame, and is a graduate of Northern Illinois University.