Serves the Commercial Small Fleet Market of 10 – 50 Vehicles

Making the Move to Managed Fuel

May 2002, by Paul Dexler and Steve Elliott

The general consensus is that by putting a managed fuel program into place, your company will likely realize savings of at least 15 percent in overall operating costs compared with not using fuel management. Importantly, those basic savings bear no relationship to the size of the company fleet.With managed fuel, you get a more complete picture of each driver's operating characteristics, and can spot problem areas such as the wrong grade of fuel being pumped. Detailed monitoring of incidental expenses incurred is easily accomplished.Cards can be instantly "turned off" to avoid unauthorized purchases if an employee is terminated. A monthly or weekly printout shows purchases by vehicle number. You can see miles traveled per month and miles per gallon per vehicle. Any discrepancies can be flagged so that you can contact the driver to see if he or she is mismanaging fuel purchases.The benefits of fuel management are numerous, according to companies that have tried it. Paramount among these for many managers of company vehicles is less paperwork and more control over fuel type and price.Find the Existing Numbers
The more carefully you can design the program to fit your company's needs, the greater the savings can be. Let's take a look at some of the considerations you'll need to take into account when developing your fuel management program.Start out by going through your current fuel charge, billing and payment systems as carefully as you can. Find out what your actual costs are. Without an established baseline, there is no way you can plot any benefits against your current costs.You have to know where you're coming from in order to develop a correct course toward where you want to go.Determine what it costs for your company to cut a check to a driver. Determine the amount of time it takes to decipher a fuel receipt and enter it into your system. Track each of your current fuel-related expenses, to build a baseline from which you can work.Multiple Suppliers are Available
There are many possible fuel management suppliers. Once you have determined what your needs are, present them to several suppliers to see which one will most closely match those needs.Fuel companies and major credit card companies all have programs through which a fleet can manage its fuel purchases. In addition, there are companies specializing only in fuel management for fleets. Most fuel management program providers will fine-tune their program for your specific needs, so do not hesitate to ask for special considerations. If company A won't accommodate you, Company B probably will.Multiple Tools are Offered
Here are some of the tools offered by fuel management providers, not necessarily in any order of importance. You determine your actual order of importance.Are you looking for the lowest fuel prices, or looking for maximum convenience, or are you only concerned with data capture and controls? Any one, or all three, of these goals can be reached through the use of these fuel management tools.
  • Driver convenience.

  • One card may be good at thousands of fueling stations across the country. With another, your drivers may waste valuable time looking for the "right" station.
  • Increased security.

  • You can set the PIN number requirements for driver or vehicle.
  • Electronic transaction capability.

  • Most stations offer this added convenience.
  • Custom-designed billing.

  • Payment can be set up monthly, weekly, or for whatever frequency you need. Payment can be electronic.
  • Multiple reports.

  • Reports can help you see and control every aspect of the drivers' use of their fuel cards.
  • Exception reports.

  • These can help you pinpoint vehicle performance and maintenance needs, as well as flag problem vehicles or drivers.
  • Tax-exempt fuel services.

  • Most fuel management providers allow tax-exempt entities to have their adjustments handled at the pump at the time of purchase.
  • Direct account access.

  • Customers can view account status directly from their computers.
  • Service staff available 24/7.

  • In an emergency situation, no matter what the day or time, service personnel are available to assist.Reducing the Human Cost FactorOne saving that is not directly addressed by the various fuel card providers, but is certainly an important cost factor in your operating expenses, is the human factor.Every time someone inputs data at a keyboard there is an error fatcor involved. When was the last time you typed an e-mail, for example, without making a single typo?The automated systems in place at fuel management providers virtually eliminate the need for re-keying any data. From pump to final statement, there is no keyboarding involved. This means savings in terms of accuracy as well as of time.When Business Fleet conducted a survey of fleet managers on the subject of fuel management, several indicated that their operations were simplified and sped up, while at the same time more detailed information was available.No More Twinkies
    In unmanaged systems, drivers occasionally slip in a snack along with their fuel purchase--the infamous "Twinkie Factor." They assume the notation on the receipt--if it's even there--will probably go unnoticed as it makes its way through the accounting system. With a fuel management system in place, these little high-calorie extras can't happen.Premium Fuel:The Urban Myth
    Another common occurence that can no longer happen in a managed fuel system is the pumping of a higher grade of fuel than is required by the vehicle.There is an urban myth that if a vehicle runs well on regular grade fuel, it will run even "better" on premium. As with most other urban myths, this has no basis in fact. With a modern vehicle, ifit is designed to run on regular, that's all it needs.At 20 cents per gallon extra for premium on a 15-gallon fill-up, that's an additional $3. Do that twice a week, 52 weeks a year, and it amounts to $312. Multiply that by 50 vehicles in a fleet, and your drivers have spent an extra $15,600 of company money over the course of a year.What Works Best?
    While you keep all this in mind, we'll repeat what we said at the start. You have to take an in-depth look at your current operation.Most fuel management providers will be happy to sit down with you and review where you might save money, estimate what your potential savings could be, and lay out a custom-designed program that is best suited to company needs. With the right program in place, you will find that you will have everything you are looking for--with less work and at a lower cost.
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