Closing the Loop at TNT Express

TNT has completed a two year programme to install Merridale diesel fuel monitoring and electronic tank contents gauging equipment at all of its depots, using own-yard fuelling facilities. MIS Fuel Monitoring won the contract, following a thorough evaluation under competitive tender. A total of 49 sites have been upgraded making this one of the largest fleet-wide implementations of fuel management systems in the UK.

Merridale equipment was selected by TNT because MIS were able to offer a total package solution, including the central fuel management software. This links to the TNT Engineering Group's fleet management system, located at Atherstone, Warwickshire. In operation fuel dispensers are accessed by a smart key allocated to individual vehicles. The key automatically identifies the vehicle being refuelled and the driver is asked to enter the vehicle odometer reading. As an additional safeguard, the system checks that the elapsed mileage is correct before fuelling is allowed to proceed.

Details of the amount of fuel drawn are recorded and downloaded on a daily basis, to the Merridale FuelFX fuel management system. At the same time an electronic fuel dip update is taken, which together with the totals drawn from each site enables TNT to reconcile its in-house fuel stocks on a daily basis.

According to Duncan Davies, Strategic Projects Manager for TNT Express UK and Ireland Network Operations, the group dispenses some seven million litres of fuel every quarter, across its national network.

"From our total capacity, at any one time we hold a significant amount of fuel stock spread over 49 sites. Effectively this is our strategic reserve and provision against any circumstances where national fuel supplies may be disrupted. During the fuel crisis of 2000 for example, we were able to continue operating and maintain the quality of our service far longer than any of our competitors."

Prior to the Merridale implementation, TNT has been managing its diesel stock through manual records at the pump and a physical dip measurement of the tank contents. Whilst this permitted a degree of local control, it did not provide any facility for central administration. The main benefit of electronic monitoring is that the group now has a central view, on a daily basis of its entire fuel stock management around the country.

"From this we can measure and therefore take steps to control the environmental impact of TNT in terms of the amount of fuel that we are using for all our depots around the country."

As a transport organisation TNT recognises its responsibility to use fuel efficiently. This is being achieved primarily by ensuring that all vehicles are correctly serviced, to maximise their miles-per-gallon (mpg) performance. The Merridale system captures mileage from the vehicle odometer reading. This allows the company to plan its vehicle servicing far more accurately than has been done before.

The system will also provide better informed decisions on the procurement of new vehicles. Details of external fuelling can be imported into the software and combined with internal transactions to provide full visibility of the costs of each of the types of vehicle and models that the company runs in its fleet.

"From this we are able to analyse fuel consumption and make buying decisions that will be consistent with our environmental strategy," says Duncan Davies, adding, "These are the two huge wins."

An additional benefit from the system is that it will provide an instant alert if any storage tanks should start leaking their contents. Since it is a closed loop there are basically two ways to influence the stock level, either by adding fuel or drawing off fuel as it is dispensed into vehicles. Any variation will set the alarm bells ringing, thus providing an important back-up to all the other measures taken to protect the security of the fuelling installations.

From an efficiency point of view, Duncan Davies argues that operating costs can also be reduced by a percentage, simply by actively managing drivers' mpg performance.

Another important benefit is that the company's buyers are able to save money by taking advantage of the fluctuations in price of diesel on the spot market. Having a central view allows the company to see where it is running low of stock. Buyers can use this to select the best day on which to purchase fuel. Even a small price change can make a big difference when purchasing 100K litres of fuel.

While all of these business benefits had been identified within the initial business case, for TNT the biggest single issue was the need to introduce an improved stock management capability.

"The combination of a tank contents probe and the fuel monitoring system at each of the sites was absolutely crucial. If you are monitoring the issuing of fuel but also losing stock, there is no visible audit trail where you can identify exactly where your fuel is being lost. It is the combination of the fuel probes and the fuel monitors that closes the entire cycle down, allowing full control of the fuel stocks."

Looking back over the implementation Duncan Davies comments; "We formed a very easy relationship with Merridale. On customer service the company was incredibly flexible and response times were brilliant."

"The implementation was cost effective. The business case was extremely easy to develop, in terms of what it was going to cost to put it in and the benefits that we were going to get out of it. Certainly for large organisations with their own fuel stocks, we have shown that the figures do stack up."