Questions to Ask Before Signing Up for a Fuel Management Program
Considering that fuel is one of your top operating expenses, and likely to remain so, managing your fleet’s fuel costs is more important than ever. For many fleets, this may be the time to consider a fuel management company. We interviewed several large-fleet managers who’ve used their current fuel management provider for as little as six months to as long as 11 years, and asked that they pass along their wisdom and experience to you.
Kellie Duenke, manager of Monsanto’s 2,100-vehicle fleet, told us that her company recently switched to a new fuel management provider based on a wider acceptance of the fuel card than their previous provider. “We’re an agriculture products company, so we do business in a lot of remote areas and need a card that can provide our drivers with fuel no matter where they are,” Duenke says.
Wide acceptance was also the major issue for Boehringer-Ingelheim’s fleet manager Lee Buttrick, who oversees a pharmaceuticals fleet of 1,500. “We’ve used the same provider for about 10 years. When we first signed up with them we did a test in the areas of the country that we felt were the least-covered by their fuel card. We expected to have the most problems in these areas and felt that we could learn from them. But it turned out to be a very successful test, so we went company-wide with the card. Everybody from our president on down to office services uses the card and just loves it.”
Linda Taylor, who manages Diebold’s 3,600-vehicle U.S. fleet, also cited fuel card acceptance as her number- one priority. “A large network of fuel providers is extremely important to our global fleet,” she says. Diebold specializes in integrated self-service delivery systems and services.
For Mark Klein, manager of automotive glass replacement and repair company Safelite Glass’ fleet of 3,000 vehicles, the main concern in 1991 when Safelite first signed up with a fuel card provider was the complexity and timeliness of the reporting detail. “We do 30,000 fuel transactions a month, so we need a company that can provide the highest level of detail – Level III – for each transaction. We looked at every provider in the market and the one we chose had Level III reporting. This enables us to know not only the driver, date, time, location, and all other pertinent details of the purchase, but with the filters the program has we can also investigate and compare our drivers’ premium fuel purchases measured against the state average.”
Klein says this level of reporting gives his company a great deal of control, allowing them to cap spending limits and number of purchases per day. “We have three different limits on the card, which serve to manage driver spending and also protects us in case a card is stolen,” he says.
Klein also stresses that timeliness and the ability to receive reports electronically is critical. “When chasing a problem, you need to get information quickly. We can get information instantly from yesterday or from the last three months – whatever we need. And if there’s a problem with a driver, we can shut off a PIN number immediately, right from a desktop computer.”
Having a solid method by which to manage your drivers’ PIN numbers is extremely important, says Lee Buttrick. “We use their employee ID number; that way we have control of it if we need to shut off a card.”
Duenke agrees that the level of control offered by the card provider is of paramount importance. “We want to be able to better designate limits and regulate purchases – now our drivers can’t get their ‘cokes and smokes’ with the fuel card. And it discourages drivers from purchasing a premium grade of fuel because we’ll see it in the exception report.”
Although all of our fleet managers cited Level III control as being one of their top criteria used successfully by all of them to control drivers’ spending, Buttrick points out that mistakes sometimes occur in the coding by the fuel companies. “Be careful how you approach your drivers when reproving them for using premium grade fuels,” Buttrick advises, “because we’ve seen instances when the product code is keyed incorrectly.”
These and other types of problems are what make it so important to have a fuel card provider who listens and responds to your feedback. “It doesn’t happen as often as it used to,” says Buttrick, “but when it does we call our card provider and they are really good at following up and correcting the situation.”
Another occasional problem you should be aware of is accidental card swiping. “If a driver accidentally swipes a card three times, it can’t be reset for 24 hours, and the driver will have to use another company card or pay for the fuel out-of-pocket,” says Duenke.
Despite small glitches in the system, all of our fleet managers agree that the overall effects of a fuel management program are positive. “We’re simply too large a fleet to do this manually,” says Klein. “Sheer size dictates that we be on a fuel card program. We spend $10 million a year on fuel, and every month we find areas where we can save money because of the level of detail of our reports.”
Duenke says that because their network of fuel locations has increased, her fleet has eliminated a lot of the out-of-network fees they paid with their old card provider. And exception reports allow Monsanto to better control expenses. “But if I had a wish list,” she says, “I would love to see a card so sophisticated that it could actually prevent drivers from purchasing premium grade fuel – no vehicle in our fleet needs premium fuel.”
Buttrick says her company has also saved money by using a fuel management program. “20 percent of our drivers used to fill up with super unleaded gasoline, and now we’ve gotten that number down to below five percent. We’re really happy about that.” Buttrick had some parting advice for fleets considering a fuel management company. “Benchmark with your counterparts,” she said. “Find out what card others in your industry use and see how well it works for them.”
10 Questions to Ask
Consider these questions (as well as others that may pertain to your unique fleet needs) before deciding on a fuel management provider:
1. Is the fuel card widely accepted, even in rural areas?
2. Does the company provide Level III reporting capabilities? Exception reporting?
3. How quickly can the company provide electronic reporting?
4. Are you able to limit purchases to fuel only? (No ‘cokes and smokes’?)
5. Are you able to set other limits, such as number of transactions per day and/or dollar amount of purchases?
6. Can you shut off a PIN number immediately if necessary?
7. Is the company responsive to customer complaints?
8. Does the company charge to replace lost/stolen cards?
9. If a card is deactivated, do you have to send it back?
10. Is the card of good quality? (Does the magnetic strip wear out quickly? Do drivers have trouble swiping the card?)