How satified are you with your company's fuel card provider?
Many fleets use fuel cards to help control and track spending on fuel, and since fuel is one of the largest expenses for most fleet managers, it’s imperative that we manage this cost. The benefits of using fuel cards include tracking driver spending at the pump and potential discount to retail fuel price.
The advantages of tracking driver spending can't be overstated, as the data provided can help fleet managers assess if drivers are efficiently purchasing fuel, as well as identify high-performing vehicles and drivers who can serve as examples to the rest of the fleet.
Automotive Fleet recently conducted a survey that probed fleet owners and operators about their fuel spending habits.
It’s interesting that somewhat larger fleets seem to be relatively more satisfied with their current fuel card providers than midsize fleets. I thought that perhaps larger fleets might be getting a better deal from their fuel card providers because bigger customers equals more money to spend. That provides more leverage.
This wound up being the case. More than 60% of larger-sized fleets were able to receive at least 1% off retail price for fuel, and more than 30% were able to get at least 3% off. Compare this to the roughly 41% of midsize fleets that were able to get at least 1% off the retail price and the 37% that didn’t even get 1% off.
Larger fleets appear to have more power to negotiate better deals than midsize fleets. Importantly, midsize and larger fleets report similarly in areas with larger discounts, but are extremely different in the less than 3% discount range. Larger fleets might be more used to pressing hard on negotiations and trying to get the maximum discount possible. The majority of fleets with more than 500 vehicles pay nothing for their greater-than-3% savings, while midsize fleets pay regular fees for the same discount.
How much does your company save on the retail price of fuel because of your fuel card provider?
All this goes to show that perhaps midsize fleets should push harder in negotiations with fuel card companies; they aren’t seeing the same savings as larger fleets. This also presents an opportunity for fuel card companies, as around 17% of midsize fleets recently stopped using or switched fuel card providers due to fees being too high. Since the vast majority of fleets have used the same fuel card for more than five years and don't have plans to switch soon, perhaps fuel card companies could entice the fleet managers with promises of higher discounts and lower fees.
Ultimately, fuel cards are a fantastic tool in the fleet manager’s arsenal, but also have room to be used more effectively, especially in midsize fleets. Large fleets have large resources to push on these bottom -line negotiations, and midsize fleets should take a page out of their playbook.
Although some might argue that large fleets have an edge because of the volume of purchases (and they do), that doesn’t mean that you can’t ask for bigger discounts. In our study we found that even fleets with as low as 50 vehicles are able to obtain greater than 3% discount to retail fuel prices.
Even if your fleet doesn’t have the same firepower as a massive 5,000+ vehicle fleet, you can still push for more savings.