Fuel represents a major spend area for fleet managers and is the second largest TCO expense in the commercial fleet industry, after depreciation. This means that effectively monitoring fueling trends is and best practices is critical to maintain a successful operation.
And while it’s impossible to predict exactly in which direction fuel prices will trend, useful tools that are available to fleets, like telematics, can help fleet managers identify ways to keep costs managed as efficiently as possible.
But the fleet industry is an ever-evolving space, which means new technologies are constantly being developed that will help make fleet professionals even better at managing this spend category.
Automotive Fleet reached out to experts in the vehicle fueling space to get an idea on burgeoning tools and trends in the space to get a sense of where the industry is headed for fuel technology.
Mobile apps have radically changed how everyone operates in their lives, with much of what we do on a day-to-day basis having some functionality available through an app, whether its online shopping, finance managing, virtual communication, etc. It is understandable that this will be more common to fuel purchases, too, moving forward.
Traditional fueling technology by use of a fuel card with embedded EMV microchip technology is becoming more antiquated. Regions like Europe and Australia have more consistently incorporated tap-and-go technologies into the payment methodologies of their everyday lives.
However, the United States has trailed when it comes to more widespread adoption for this type of tech, but contactless payment will inevitably become a common method of fuel purchasing in the states, too, predicts Justin King, senior VP of product and innovation, Comdata.
“To us the plastic card is simply a form factor. I don’t believe that plastic cards are going to be around in 20 years,” he said, and added that all the major players in the fuel payment industry have plans to move in this direction, too.
In the case of Australia, a study from Mastercard in the country found that 82% of Australians were using tap-and-go technology to make payment.
“Everything’s going mobile and contactless and you look at some of the initiatives led by folks like Visa to get all cards to be contactless,” he said.
Given the great advances in vehicle and fueling technology, and how these are increasingly becoming tied to functions available in a mobile format, going to contactless technology is inevitable.
The COVID-19 pandemic through much of 2020 may have an influence on increasing adoption of the technology moving forward, too, as “social distancing” practices have become a major talking point for managing fuel spend in several ways.
“I've noticed with this coronavirus, there’s been a lot of talk about the virtues of using virtual cards and virtual spending to pay vendors because of accounts payable shops and accounts payable departments who are receiving physical paper invoices and paper checks which is creating moments for potential contamination,” said King.
Shell has taken these concerns of potential contamination with physical interaction into consideration and have tools and technologies available that are helpful amid the COVID-19 pandemic.
“We are prioritizing safe interactions with our customers, safe working environments for our colleagues and safe practices in the wider communities in which we work,” said Rusty Barron, vice president and general manager of Shell’s Fleet Solutions business for the Americas.
Shell technologies that offer support during the pandemic include mobile tools that allows users to make payments and manage invoices via a mobile app and also grant the capability to activate a fuel pump from their vehicle to minimize external contact.
Additionally, Shell has its “Shell TapUp” mobile platform that brings fueling solutions directly to the customer. To provide support during the pandemic using this solution, Shell is providing fuel to Meals on Wheels programs in three states, and is also using this to provide support to the Houston Police Department.
The continued utilization and implementation of newer fueling technologies, like tap-and-go, is also designed to play a major part in the reduction of fraudulent payments, especially since some stations may still use the more dated magnetic swipe functionalities for payment.
While certain types of fraud can be directly related to improper driver etiquette, e.g. via the misuse of a company card or “slippage” by way of employees using fuel cards to purchase non-fuel items, fraud can also be perpetuated by a third party through skimming, which is when a device is attached to a fuel pump credit card reader that is used to steal purchaser information.
Fraud detection can further be improved via the help of telematics and GPS technologies, with consideration of driver location and making sure it aligns with what the fleet is monitoring.
“What we’re doing on the fuel side, is we’re looking at the GPS data to see where that vehicle last was to see if a transaction is in pattern and makes sense based on where that vehicle is,” said King.
Technologies available now also have the capability of monitoring the IP address of where charges are being made, the amount of time it takes to enter address information when making a payment, and other specific nuances of online payment that may indicate fraudulent charges, including how a smartphone is positioned when purchases are being made.
Data and Analytics
Other advanced fleet technologies that may become more ubiquitous to the industry in the coming years includes a growth in analyzing fleet fueling data.
“We are likely to see an increased reliance on fleet fueling data to help inform broader business decisions,” said Barron of Shell. “In order to successfully navigate this data revolution, fleet management will require a new generation of technology solutions to analyze insights and use them to improve operating efficiency, boost productivity, and make more educated fleet management decisions.”
The usage of predictive analytics and artificial intelligence (AI) will also play a part in helping fleets assess best practices for their operations.
These technologies could assist in the overall management of a vehicle by identifying the best combinations of fuel and motor oil that would go into the vehicle to maximize fuel economy, in addition to a variety of other potential benefits.
“This is the type of stuff that with the right set of data, and with the right kind of modeling around, you can begin to predict which type of oil will make an engine last longer, based on how it's being driven or the climate it's being driven in,” said King.
In utilizing this technology and being consistent with the best needs for vehicles, fleet managers will ultimately see reductions in other potential pain points, such as maintenance needs.
“You can use AI and analytics to really streamline and optimize the maintenance program for a particular vehicle and maximize the longevity of that vehicle and reduce maintenance costs as much as you can for that,” said King.
Beyond the technological advancements considering vehicles running on unleaded gasoline or diesel, alternative-fueling technologies still very much have a place in the fleet space and are continuing to see technological advancements as well.
Whether in helping to reach corporate sustainability goals or reducing their overall carbon footprint, fleets are finding applicability that makes alt-fuel vehicles essential for their business. Not only that, but several automakers have announced initiatives to move heavily into vehicle electrification. So, for some fleets, it may not be a case of “if” but “when.”
Because this space is expected to expand for fleets in the ensuing years, professionals in the alt-fuel space recommend managers who are looking to introduce “greener” vehicles to be mindful of their applicability and identify the best ways that these assets can more seamlessly fit into their operations.
“It's important for us to understand all of that. And we can do that in a dynamic way by tying into routing and scheduling systems. But when we design their overall fueling system, we want to make sure that we understand what the peaks and valleys are for the company,” said David Peterson, director, fleet at ChargePoint, who spoke on the idea of how fleets might introduce EVs into their operations.
Being able to share this information that is specific to the fleet with potential OEMs, alt-fuel vendors, and other key fleet partners will help in making things easier for fleet operations.
“Fleets should think about electrification as a system and once they figure out the vehicle that they want, or the set of vehicles for the use case that they're looking at, they should start the conversation with us about how to design the right fueling system,” said Peterson. “And that's from a hardware, site design, software and support standpoint. The full picture needs to be considered to ensure a seamless transition and smooth continued operations. Otherwise piecemealing the process will not yield the best results.”
And while the growing portfolio of EVs is helping to bring them to the forefront of fleet utilization, not every fleet has been as invested in incorporating EV vehicles into their operations, though it hasn’t been due to a lack of interest necessarily, but applicability and vehicle availability.
“It's not that fleets that are utilizing medium- and heavy-duty vehicles haven't been proactive about incorporating battery-electric vehicles, in fact they are,” said Peterson, “They've been actively trying to figure out how to transition their fleets or segments of their fleets into electric technology, preparing for a greater availability of vehicles in the near future.”
The engagement in this space is expanding however, as mentioned earlier with OEMs creating products for this segment. For example, Ford announced at the NTEA Work Truck Show in March 2020 an all-electric version of the Ford Transit that will hit the U.S. market for the 2022 model-year.
So once the available vehicles match the applicability, a fleet landscape with more EVs may be commonplace, but it all starts with being prepared to manage vehicles with varying fuel types.
“Once you start asking the fueling question, then you are asking the big question, which is, I have a fleet today that already uses gas, diesel or both,” said Peterson. “Now fleets are adding another fuel like electric fuel, or even CNG or hydrogen. How are fleets going to manage different fuel types, in such that it is not creating a whole new problem? You may have a mixed fuel fleet now, so what do you need to do to make sure you are managing your entire mixed fuel fleet in an optimal way?”
Other Fueling Options
For some fleets incorporating hybrid, natural gas, or propane powered assets may be a viable solution for fleets who are trying to reach sustainability initiatives without worrying about things like range anxiety and a lack of widespread EV charging solutions for BEVs. Different options are there, it’s just figuring out what works best, case-by-case.
“It's a great time to be a fleet manager because they have more alternative fuel products, vehicles and types of technologies at their disposal than ever before,” said Eric Foellmer - director of marketing for XL Fleet. “There is obviously a great deal of investment and interest right now, particularly in the electrification space, whether that's battery electric or plug in hybrid or hybrid. There is a wider range of options now than there was even a year or two ago, and it's a really exciting time to be part of this industry.”
At NTEA’s Work Truck Show this year, XL Fleet debuted two new hybrid-electric Chevrolet Silverado pickup truck options: an upfitted hybrid electric Silverado 2500 HD and Silverado 3500 HD.
These vehicles are seeing a lot of interest with construction companies, utilities and municipalities, said Foellmer of XL Fleet.
“Because these vehicles offer an electric assist during acceleration, they’re a great choice for any application where a customer is driving with variable speeds, with a lot of stop and go traffic, and they’re not on the highway all the time,” he said.
And since some of these assets sit on platforms familiar to drivers, it is easier for drivers to familiarize themselves with the vehicles and setup.
“Being able to utilize a hybrid or a plug-in hybrid option, particularly one that is readily available and installed on their favorite vehicle platforms they’re already using, is a cost effective way for a fleet manager to make immediate progress on reaching sustainability targets,” said Foellmer.
One notable takeaway that Foellmer has gleaned from the high adoption of hybrids and PHEVs is that it indicates an interest in engaging more with battery-electric vehicles in the future, and that this may support the trajectory of the technology’s continued development.
“Corporate and municipal sustainability mandates have definitely increased the demand for electrified fleet technologies, which is helping to move the ball forward for all types of EVs,” said Foellmer. “But I think people are recognizing that they're still years away from being able to deploy battery electric vehicles more broadly. And for the foreseeable future, internal combustion engines are still going to be the norm, not the exception. So fleets are adopting hybrids and plug-in hybrids in larger volumes as a way of moving that needle right away, which accelerates and paves the way for the long-term adoption of battery electric vehicles down the road.”
Other fueling options available for fleets include compressed natural gas (CNG), and ANG technology is particularly well suited to the light-duty vehicle segment, and ANG bi-fuel trucks are designed to be cheaper than gasoline only, use less energy, fuel faster than CNG and emit fewer GHG emissions.
“The historical challenge of viable alternative fuel options for large light-duty vehicles created an opportunity for natural gas to reemerge as a simple, readily available and affordable solution for this segment,” said David Newton, commercial director, performance materials, Ingevity. “By tapping into the abundant supply of natural gas in the U.S., light-duty pickup trucks are beginning to leverage ANG vehicle technology, a lower-pressure fueling solution that costs less, is more efficient and is even more environmentally friendly than CNG and diesel.”
Offering these alternative fuel options may also be a practical forward-thinking solution to thrive in future crises if they arise, such as the coronavirus pandemic.
“Whether a weather-related event, an electrical blackout, or today’s unprecedented viral outbreak, readily-available fuels like natural gas demonstrate the importance of fueling flexibility and reliability and the value of reducing recovery time when critical infrastructure is impacted,” said Newton.
Interest in natural gas technologies has remained consistent with NGV system developers and installers continuing to receive U.S. Environmental Protection Agency and California Air Resources Board (CARB) certification for new model-year vehicles that are modified to become bi-fuel and/or dedicated natural gas trucks.
Steve Whaley, the director of on-road business development for the Propane Education & Research Council, also observed the increasing engagement of alt-fuel vehicles for fleets, with overall interest coming from several different voices in the industry.
“The automotive industry is moving more and more toward environmentally friendly energy solutions,” said Whaley. “Not only are companies forced to contend with new government regulations to meet lower emissions and increased CAFE standards, but pressure from communities and customers is requiring many companies to make the switch to alternative fuels.”
For the propane fuel side of the alt-fuel industry, current new technological developments include new ultra-low NOx engines, which are 90% cleaner than EPA standards, and Propane Autogas Hybrids, which work in a similar way to gasoline hybrids but produce reduced emissions.
Fleets are continuing to find practical functions in their operations for different types of fuels, and these fuel providers are still creating solutions to best serve audiences that are depending on them.
“We’re continuing to look for innovative ways to improve the environmental impact of propane vehicles and are in the prototype stage for a new engine that will help more fleets reach their sustainability goals once it comes to market,” said Whaley.
Additionally, offering these alternative fuel options may also be a practical forward-thinking solution to thrive in future crises if they arise, such as the coronavirus pandemic.
“The impact of the novel coronavirus outbreak and the state of the global economy on alternative fuels continue to underscore the importance of having many fueling options across vehicle segments,” said Newton. “Whether a weather-related event, an electrical blackout, or today’s unprecedented viral outbreak, readily-available fuels like natural gas demonstrate the importance of fueling flexibility and reliability and the value of reducing recovery time when critical infrastructure is impacted.”