I was just talking to a client earlier this week and he was letting me know that his diesel fuel prices were up 23% since this time last year. He was thankful that his fuel management program with us was in place but for those of you that don’t, time to start reading about a fleet fueling policy. Most fleet companies review standard operating procedure at least annually if not more often. When it comes to a fleet fueling policy most companies don’t even have one because they feel like diesel fuel prices are out of their control. Fleet managers would be correct in believing that they cannot control the Open market of the rise and fall of diesel fuel prices (crude oil) on NYMEX. Just because you can’t control the fueling market doesn’t mean you burry your head in the sand and feel that you don’t have fleet management control over your fleet fueling policy. The only way to get control on your fleet fueling policy is to actually have a policy. This fueling policy could include fuel hedging, fleet fuel cards, mobile fueling, fuel tax exemptions, fuel card, diesel fuel additives, fueling companies that you use, your fuel saving goals.
I can’t think of a policy that can help your fuel management program better then reviewing or starting a fleet fueling program. Did I hear you say you don’t really have a policy, now is the time to start your fleet fueling program? There is many different ways of having a fuel management system for fleet fueling policy. We only get so much space in our column so we will take one part known as any of the following: fuel cards, fleet cards, fleet credit card, fleet credit card services, fuel credit card, fleet fuel cards and we are going to put them all in one bucket for your company to control diesel fuel prices and help fuel savings. We could go many other directions like truck stop, mobile fueling, diesel fuel additives, fuel hedging but you will gain enough knowledge to get your taste buds wet on this.
Establishing a fleet fueling policy makes sense. After all, fuel is usually the single largest variable expense for a fleet of any size. A fleet fueling policy–carefully planned, implemented and enforced–can be a company’s most effective tool in the battle to cut unnecessary costs. In this day and age, saving money and cutting cost are a great ways to survive.
We have talked about fleet fuel cards before and the electronic capture of diesel fuel price data at the pump through the use of electronic fleet fueling cards, fleet managers now have timely, accurate data they can use to battle waste and abuse. It is very important to control your fleet fuel spend. People are always surprised to learn that on average over one and half percent of a company’s fuel budget goes to fueling theft. We are talking about the kind of fuel theft that happens when someone at your company takes fleet fuel from you. Eighty one percent (81%) of the time this is the kind of fuel theft that takes away from your fleet management budget. The other nineteen percent of the time is from an outsider stealing from you through siphoning or using your fleet fuel card without proper authorization.
If a driver makes a purchase outside parameters set by the fleet manager, the driver buys premium rather than regular gasoline this information is recorded instantly and appears on a regular billing statement along with the individual driver and vehicle number. Through the use of tools like exception reporting and purchase alerts fuel managers can enforce cost-saving policies quickly, not weeks after the fact or not at all. Hours make differences, as a fleet manager you want to be able to quickly enforce your fleet fueling decisions. With your fuel card – fleet card your fleet manager or outsourced fuel management company needs to take action swiftly.
We have all heard of management by exception and when you’re dealing with hundreds to tens of thousands of fleet fuel transactions it is really the best way to go. For many, highlighting problem areas is the very cost-effective, accurate and efficient way to implement, manage and enforce a successful fleet fueling policy. With exception reporting, fleet fueling information is funneled through the company’s policy parameters and is sorted to show where, when and by whom fleet fueling policies are being disregarded. The most experience, time and expertise you have in your fuel management system as part of these fleet management services the better your fleet companies operation is. Some companies don’t have any of the above. Look out, with diesel fuel prices almost $3.50 fueling thefts make people become a little more likely to steal.
Six ways to stay sharp in putting together an effective fleet fueling policy for your company.
- You fleet fueling policy is in place, the next step is to communicate the new policy clearly too every driver in the fleet. Let them know that all fleet fuel purchases will be monitored and that all exceptions, especially repeated infractions, will need to be justified.
- Set up the desired grade of fuel for each vehicle. Every time a fleet driver fills the tank with a premium or mid-grade fuel, the company wastes as much as 10¢ to 25¢ or more per gallon. This can add a lot of money to your fuel management program so make sure you have controls in place and are watching.
- Enforce limits at the time of purchase. The most effective way to enforce a fleet fueling policy is to set limits so that purchases outside the limits are not even allowed. For example, if you restrict transactions to two per day, the third transaction will be declined at the point of purchase
- Restrict non-fleet fuel products and services. Many fleet managers find it helpful to place restrictions on the kinds of products drivers may purchase. These things could be soda, coffee, car washes, etc. This helps to control costs, quality and consistency.
- Control the location, days, and times of fuel purchases. Frequent fuel purchases made with the company’s fleet fuel card outside of business hours are a sure sign of waste and abuse. Make sure your drivers purchase fleet fuel only during business hours, look for fuel purchases that exceed fuel tank capacity, and eliminate multiple purchases in a single day whenever possible.
- Make fleet drivers go to low diesel fuel price supplier and buy at locations with pay-at-the-pump. Drivers will save time and get on the road faster by only pay-at-the-pump locations. It will also further reduce any chance of non fleet fuel purchases inside the store.
Diesel fuel prices are going to hit $4 a gallon before they hit $2 a gallon. A good fuel card –fleet card program can help your fuel management system. Fuel theft has gone on forever and will continue to go on even if your fuel cards –fleet cards have control, your fleet companies operation needs to do fuel management. Fuel card companies provide a tool to better fuel management. That tool is a fuel card but a fuel card company makes its money through fueling transactions, they aren’t going to audit, review or make decisions for you that are your fleet management services job or a company you hire to do so like us. 267-482-6155. Call, Save, Capture Control.