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Why fuel cost optimization is key to increasing profitability?

Boosting profit without increasing revenue


To maximize profits, many businesses focus on aggressive sales and marketing strategies to achieve revenue targets, while overlooking cost-saving strategy. Did you know that regardless of your business scale, cost-saving methods have the potential to boost profitability just as effectively as revenue-driving efforts? Let's consider the following examples:


We have the formula: Revenue - Cost = Profit (Example: 10,000 - 9,000 = 1,000 VND)


  • Scenario 1: Increasing revenue by 90%, costs may not increase exactly by 90%, but with a slight deviation. Let's assume costs also increase by nearly 90%: 19,000 - 17,100 = 1,900 VND.

  • Scenario 2: Decreasing costs by 10%, while maintaining revenue: 10,000 - 8,100 = 1,900 VND.


Thus, it can be seen that reducing costs by 10% is as effective as increasing revenue by 90%.


For transportation businesses, surveys show that the largest cost is fuel, accounting for 35-40% of total fleet operation expenses.


cắt giảm chi phí gia tăng lợi nhuận

How to save 10-15% on fuel costs?


The fuel cost-saving experience of large enterprises such as DHL, Transimex, and Green Leaf Vietnam involves the adoption of Dibee solution to address two key challenges:


  • Reducing fuel wastage.

  • Enhancing fuel usage efficiency across the fleet.


According to the business review with these enterprises, fuel costs have decreased by an average of 10-15% after implementing Dibee for several months.


Transparent fuel transactions


Dibee offers a smart fuel payment solution that eliminates cash transactions, enabling efficient monitoring of fuel purchases for businesses. Currently, Dibee provides two payment formats: Physical card and Mobile application.


  • Physical cards: Each Dibee fuel card is distributed with the vehicle license plate information and assigned to a specific driver. Drivers are required to present the card for verification whenever purchasing fuel. This ensures that drivers cannot refuel personal vehicles or lend the card to others, thus completely avoiding unauthorized transactions that result in cost losses for the company.


Vòi bơm xăng Dibee

  • Mobile application: To enhance user experience, Dibee launched a mobile application in early 2023 and encouraged customers to transition from the physical card to this format or use both concurrently. The application has garnered strong support from many customers due to its superior advantages over the card format.

    • Convenience - drivers can refuel at over 1000 affiliated gas stations, including the whole PVOIL network through the app, locate suitable stations along their route, and flexibly change vehicles according to settings.

    • Security and transparency - driver identification is via phone numbers, and data is synchronized in real-time to the management system (web portal). This enables managers to promptly review any transactions upon detecting irregularities and take immediate actions such as setting up or suspending the fueling right for drivers with specific vehicles.

    • Cost-saving - the app is currently provided and upgraded for free, significantly reducing the cost of issuing physical cards while providing numerous superior benefits.

Dibee-mobile-app-screenshots_EN

For the issue of drivers refueling into containers such as bottles or tanks, Dibee has pioneered the development of a fuel limit setup feature. This feature allows managers to set various limits for each fuel purchase transaction. For example, maximum fuel quantity per refueling based on the tank capacity or distance traveled, permitted fuel types, maximum transactions per day based on travel distance, and even permitted gas stations based on the transportation route. In case of any misconduct, the system will promptly notify the assigned managers to take appropriate action.



Accurately assess the fuel usage of each vehicle and driver


Dibee offers industry-leading insights into transportation practices, particularly concerning the average fuel consumption across different vehicle types. Acting as a benchmarking tool, it aids businesses in evaluating the fuel efficiency of their fleet. Upon integrating Dibee into their fuel cost management strategies, companies gain access to an online management system that houses various visual dashboards and detailed reports, providing comprehensive insights into the fuel usage of each vehicle and driver. For example, the consumption report highlights vehicles consuming fuel below or above the average level and quantifies the percentage deviation.

dibee-consumption-report

With the detailed data provided by the Dibee system, businesses have the groundwork for tracing, identifying root causes, or making appropriate assumptions to assess issues and devise suitable corrective solutions. For instance, if the actual fuel consumption deviates only slightly from the established limit, it may be attributed to the driver's driving behaviors or skills. However, if the deviation is substantial, it suggests a likelihood that the driver is being dishonest.


Conclusion


Boosting profits for transportation businesses is entirely achievable with modern solutions. By leveraging technology and embracing innovative thinking, businesses can effectively tackle the challenges they encounter and devise appropriate solutions.


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Dibee has consistently assisted over 200 customers with varied fleet sizes, including notable names like DHL, Vietnam Post, CJ - SG Safety Vina, Green Leaf Vietnam, Bitis', and many more, in tackling fuel cost-related challenges.


For further details on how Dibee can optimize fuel costs and modernize your management processes, please reach out to us at:

 

  • Business line: (028) 73 03 66 99     

  • Email: sales@dibee.co 

  • Submit your requirements HERE and we will be back shortly 


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