Peregrine Trucking Company

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Peregrine Trucking Co. recommendations
MGT 325

At Peregrine Trucking Company, we attempt to maintain a high level of efficiency and social consciousness while meeting or exceeding our profit margins. Taking a glance at our financial report, the two largest expense variables that we currently have are labor and fuel. Neither of these expenses is eliminable in our company; however, we can reduce these expenses slightly.

I have preformed an evaluation of the company and have found that with the fuel prices increasing almost weekly, we need to reduce the amount consumed by our fleet operations. I have established that the current fleet operational standards, equipment, and the routing techniques are in need of renovation. With these areas targeted, improvements made have the potential to reduce fuel consumption, increase customer service, and improve employee morale. These improvements will increase the company’s profit margins to meet or exceed 2008’s levels.

The cost of diesel fuel increased to unprecedented levels in 2008 and [have since] continued to rise almost on a monthly basis (Gallagher, 2010). In my analysis, I determined that since this increase in fuel cost, the increase in fuel consumption has increased as well. The age of the equipment and the schedule of the regular maintenance of the equipment, I believe are the cause of this increase. Currently there is no policy in place pertaining to the maintenance schedule of the vehicles. These policy should require all drivers to perform a pre-trip inspection and report their findings back to their supervisor. The supervisor should report any issues with the equipment to the maintenance department for immediate repair.

By performing regular maintenance on a vehicle, vehicles maintain elevated fuel mileage and perform more efficiently (Krar, 2011). The cost of the regular maintenance is relatively low considering the overall savings in future expenses. As the age of our equipment increases, parts will begin to fail and/or wear excessively causing more downtime and a high impact on the profits. Changing the oil will “have a positive impact on the gas mileage of their vehicle as well. In your engine, the lubricating properties perform a variety of vital functions that not only keep your vehicle running but also determine how efficiently it does its job.” (Carsdirect, 2009).

This maintenance schedule should coincide with the driver’s pre-trip inspection reports. Currently the drivers do not perform these inspections every time they drive the vehicle, nor do they report issues with the vehicle after their shift is over. If they were required to perform an inspection prior to driving the vehicle and make notations on a form to turn in with their paperwork, an issue can be resolved before it causes a larger impact. For example, during a pre-trip inspection, the driver notices that one of his tires is low on pressure; he inflates to the proper level and makes a notation on his form. On his next scheduled shift, the same tire is low and he takes it to the repair shop where they discover a nail in the tire. By keeping proper inflation on all the tires, the driver will maintain his fuel efficiency (Krar, 2011) and thus reduce his fuel consumption.

On the same lines as the maintenance data, I retrieved the data from the tractors onboard computer system and discovered the average miles per hour was above average for most of the drivers. Most of our drivers are regional drivers and within this region, the average speed limit is 55 mph. Our drivers are averaging 66 miles per hour, which is well above the limit. There was an above average of idle time as well. Both of these issues will increase the amount of fuel consumed by each driver.

Both of these issues, if corrected, will reduce the amount of miles per gallon. “You can assume that each 5 mph you drive over 60 mph is like paying an additional $0.30 per gallon for gas.” (U.S.E.P.A., 2012) At the average speed of...
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