The Evolution of Fuel Management
Advancements in technology have significantly impacted the ability for fleet managers to track fuel use and spending to make their operations more efficient and cost-effective.
Fleet drivers used general purpose cards to purchase fuel until the early 1980s when the concept of fuel cards came about. These new cards provided much more data that fleet managers could use to track spending, consumption, and efficiency.
In this day and age, having to physically go inside a convenience store at a gasoline station would be considered an inconvenience if it were the only option available. But, just a few decades ago, it was the norm.
It wasn’t until the 1980s when electronic banking started taking off in the U.S. that oil companies and gasoline stations started moving to the electronic side of business as well. For WEX Inc.’s founder, A.R. Wright, he saw that as an opportunity, according to Mike Dubyak, WEX president, CEO, and chairman.
“He took an ATM and hooked it up to gasoline pumps on an island where someone could put a card in and activate the pump and pump fuel,” Dubyak said.
Tools used by gasoline stations and oil companies to monitor fuel transactions in those early days were a far cry from technology available today.
“Embossed cards were ‘zip-zapped’ through an imprinter, and then someone would send that ticket off to a processing center where someone else would process it,” Dubyak recalled. Ticket information was limited to location, date, and dollar amount.
This method wasn’t exactly the most effective way to track fuel use — one of today’s largest fleet expenses. During this decade, fuel management and fuel card use started becoming more commonplace.
“Back then, fuel management was really just managing invoices and paying for fuel. Customers were using credit cards, but there really wasn’t any universal card,” explained Randy Morgan, executive VP of sales for Comdata.
Avoiding Lines and Paper
The concept of fuel cards originated in the early 1980s with such pioneers as Comdata, which launched its fuel card in 1981 at approximately 10,000 truck stops.
“The industry adopted it very well. People were just amazed they could see and manage real-time fuel transactions,” Morgan said. “They were using credit cards and cash before, but there really wasn’t a universally accepted card until then. They started to understand what they didn’t know before, which was driven by the real-time data.”
According to Morgan, that was the foundation of Comdata’s MasterCard fleet card. “We gave customers knowledge and tools on how to manage their fuel spend that they didn’t have before,” he said.
The transaction processes were electronic, but reporting was still paper-based back then. “It was a lot of paper; it was a different time back then,” he continued. “Back in the 1980s, we had the availability to connect someone to real-time connectivity. Fax was an important delivery tool back then. Being able to fax someone fueling information on a daily basis was crucial to business.”
Fuel data became much more specific once oil companies started rolling out electronic capabilities in the late 1980s at their gasoline stations, moving away from the paper-based imprinter and rolling out point-of-sale electronic devices inside the store or the kiosk that accepted Visa or MasterCard. The challenge for fleet cards was the fact that there were more than 150,000 gasoline stations.
Companies such as WEX, which introduced its fleet fuel card in 1983, worked with oil companies to embed specifications to capture data elements such as odometer reading; driver ID or pin number; and date, time, and dollar amount of fuel purchased.
“We were part of this electronic movement happening in the country to have gas stations embed an electronic spec that could now provide fleet card fuel management well beyond the general purpose credit card,” Dubyak said. “We also were able to convince fleet leasing companies to become partners of ours, and the fuel card became one of those services provided to fleets by us through the top fleet leasing companies.”
In the mid-1990s, fleets were able to increase driver productivity with pay-at-the-pump services.
“Pay-at-the-pump was great for fuel management,” Dubyak noted. “The driver could drive in, fuel up with a fuel-only card or one restricted to automotive services, and leave the station without ever going inside the convenience store. So, that was a key electronic convenience capability and achievement encompassing all the different data elements that fuel management cards like ours require at the pump.”
Online became the next big technological capability, helping large fleets avoid countless pages of paper.
“They can customize through online capabilities because technology continues to be enhanced. Electronic capabilities made it more efficient for fleet customers to manage their fuel requirements themselves,” Dubyak said.