Fuel for thought

It takes more than a card to manage fuel purchasing

When you think about it, fleets don’t really ask for much when it comes to managing their drivers’ fuel purchasing. The lowest available price per gallon; few out-of-route miles to get to the pumps; absolute transparency concerning purchase transactions; and accurate, real-time data reporting are all that is required. How hard is that?

It is a very tall order, as it turns out, but nothing less will do when the life of the company may hinge on successfully managing the variable cost of fuel. Fleets want to get real control over fuel purchasing—to stop waste, to stop theft and to gain enough visibility into the entire process to better manage costs lane-by-lane, truck-by-truck and customerby- customer.

According to many people in the fueling business, this desire for increased control is creating a move toward greater automation of the fuel purchase process. The theory is that if you can increase efficiency and eliminate opportunities in the transaction process for human error or intentional tampering, cost savings are bound to result.

“In the past couple of years, we’ve seen more and more requests for cardless systems and for control, a lot more control,” says Kyle Sale, executive vice president for eFueling, a supplier of rugged terminal solutions for selffueling providers and (more recently) petroleum retailers. Historically, the company has provided fuel terminal systems that rely on the driver swiping a fuel card and/or entering data such as a PIN number, vehicle number, etc., into a keypad to initiate the fuel purchase authorization process.

eFueling recently announced, however, that the company is now also working with QuikQ to serve both the truck stop and terminal fleet markets with a cardless system developed to activate, manage and track the fueling transaction via RFID. The QuikQ system is designed to allow a carrier to directly interface its enterprise software solution to a fuel vendor’s point of sale, eliminating the need for fleet fuel cards or third-party billing. According to Sale, the primary benefits of the RFID-based system are streamlined user operation, reduced shrinkage and more accurate accounting and billing.

As a vehicle approaches an equipped fuel island, an RFID antenna in the island canopy automatically pulls the data formerly stored on a card off an RFID tag attached to the vehicle. “The trigger mechanism to initiate the fuel purchase is all that is changing,” Sale explains. “All the preauthorization security steps still take place.”

eFueling is already logging data about the fueling transaction, which Sale says can be exported into various fuel management systems. “We have been a niche player in the market,” he notes, “so nine times out of 10 we can interface with the fuel management system a fleet is using.”

Fuel card providers are not sitting on the automation sidelines either, according to Sale. He notes that eFueling is already working with “more than one fuel card provider” to offer RFID based fueling services.

Comdata, for example, is venturing deeper into the field of fuel purchase automation. Ernie Betancourt, president of QuikQ, says that his own company turned its marketing and sales operations over to Comdata Network in the fall of 2011. By the end of 2011, Comdata had already announced that TravelCenters had agreed to roll out the system developed by QuikQ at all its locations nationwide.

“What we hear from our customers, the fuel providers, is that the fleets they serve want more security, more convenience and more reporting,” notes Lynn Greeley, director of sales, merchant solutions, for Comdata. “The fleet fuel card authorization process is probably the most complex process in retail. Many carriers ask drivers to enter PIN codes, various I.D. numbers and other information like the driver’s name into a keypad before fueling can be authorized. [Sometimes this is in addition to swiping a fuel card.]”

More Control

Even with Comdata’s new Fuel Island Manager “SmartQ” RFID-based system, however, most fleets today continue to want drivers to also enter certain information before fueling is authorized, Greeley says. “Fleets do have a distinct preference for allying the card to the vehicle and not to a driver, though,” he notes.

Greeley adds that he is also looking forward to offering customers the ability to send engine data back to fleets at the point of fueling. “That capability is right around the corner,” he notes. “The fast pace of technological development forces us to stay on our toes. We have to not only understand how new technologies work, but what they can provide as well. They sometimes have answers to questions we haven’t even yet asked; it is a luxury to be able to ask those new questions.”

QuikQ’s Betancourt gives fueling management companies like partner Comdata and others high marks for helping fleets control fuel card use via management techniques such as daily purchase limits and authorized networks, but he still feels that the fuel card’s days are numbered.

“I honestly believe mag-striped cards will eventually go away; they just have to,” he observes, “not just because of point-of-fueling issues, but because of card management issues. Think about managing physical cards if you have hundreds or even thousands of drivers and a driver turnover rate of more than 100%.”

In 2010, Transportation Clearing House (which merged with EFS Transportation Services in December 2011 to create Electronic Funds Source, or EFS) formed a partnership with Zonar Systems to create an automated, cardless solution to the fuel purchase transaction process.

Dubbed Z-Con, this fuel purchase authorization technology utilizes ultrasonic sensor technology to detect the presence of a truck entering a Z-Con equipped fueling island. The sensor activates a radio in the fuel canopy and an infrared transmitter. Once the transmitter and the receiver in the truck are aligned, an LED on the windshield of the truck indicates to the driver that fueling authorization is in progress. After the truck’s VIN (vehicle identification number) has been validated, the LED indicates that the driver is authorized to begin fueling.

According to the companies, the system eliminates the need for drivers to swipe a fuel card or enter data to initialize a transaction. Z-Con is also designed to terminate fueling when the vehicle leaves the fuel island area; ensuring that only the correct truck is being fueled.

“Our unique interfaces have the ability to tie purchases to both the driver and the [equipment] asset at the same time, while also tying into the freight carrier’s back offices,” notes Kevin Farnsworth, chief information officer, of EFS. “This is a trend we only see continuing, and our ability to map this data and provide a holistic view of each fuel purchase or transaction is a real differentiator that truly sets EFS and Z-Con apart.”

Generating Payback

Russ Lamer, manager of emerging technology for Wright Express, of which Pacific Pride Services is a business unit, has been watching the evolution of fuel purchase solutions and technologies with interest, especially those utilizing so-called NFC, or near-field communications. “There will be a lot of technologies [for automatically handling secure payments] out there,” he predicts. “Some will pop up and fall apart; others will make it. An infrastructure simply will not survive if it isn’t profitable. I think mobile, automated payments will happen almost by osmosis over time.”

“We are getting all kinds of new questions [from fuel vendors],” observes Greg Iverson, president of Pacific Pride. “They want to know where all of this is going and where they should invest their money. A lot of people are scratching their heads right now. Early adopters are wondering about ROI. There are capital decisions to be made.”

Pacific Pride is rolling out a new universal card this summer, for instance, to augment its cardlock offering. “[As part of the trend toward greater control of fueling], we are seeing a trend toward centralization of card programs within corporations,” Iverson notes. “Corporations want to have one fuel management program, not a different one at each company location.”

Consolidation and with it integration are trends that Sean McCormick, product manager for Telogis Fleet, is also tracking. The company recently announced a global partnership of its own for the integration of telematics and fuel card reporting with FleetCor. The partnership includes the introduction of the Telogis Universal Premium Fleet Card powered by FleetCor and the launch of the next-generation fuel management module for Telogis Fleet. “From our telematics provider perspective, there is a lot of information, such as location, that we can provide to fleets [to augment basic fuel transaction data],” McCormick says. “We can also provide information back to the fuel card provider to help them make better authorization decisions in the first place.”

Fleets, as well as their fueling service suppliers, are also choosing to layer and integrate other technologies with fuel purchase management tools to do everything possible to lower and stabilize their overall fuel costs. For instance, carriers are combining automated, cardless fuel purchasing systems and card-based systems with a fuel purchase optimization solution plus a fuel management software system that allows them to track fuel costs by vehicle, driver, lane, type of operation, customer, and season to create comprehensive approaches to controlling fuel use and cost.

This no-stone-unturned approach makes good sense for fleets that need it and can do it. “It absolutely makes sense to bundle technologies for maximum results,” says Farnsworth.

On the other hand, there are some interesting “dis-economies of scale” for certain fleets, notes Betancourt. “Some smaller fleets just don’t need all the controls and processes available to them today,” he observes. “They don’t need them because the guy with the authority is right there, involved. He knows all the drivers personally, and he may even drive himself.”

It is perhaps ironic that today’s best available fueling technology is helping even big fleets to have what the smallest companies enjoy—real hands-on control.

Resources:

Here are some fuel purchase system suppliers that can help you
put together a plan that works for your operation:
BP: www.bpbusinesssolutions.com
Chevron Texaco: www.chevrontexacobusinesscard.com
Circle K: www.circlekfleetcards.com
CI TGO: www.citgo.com/CreditGift/CITGOFleetPrograms.jsp
CSI : www.csifleetfuelcard.com
Comdata: www.comdata.com
Downs Energy: www.downsenergy.com/fuel-cards.htm
eFueling Technologies: www.efueling.com
EFS (formerly TCH ): www.tch.com; www.efsllc.com
ExxonMobil: www.exxonmobil.com
FleetCor: www.fleetcor.com
Fleet One: www.fleetone.com
Flyers Energy/Nella Oil: www.4flyers.com/cardlock.htm
Fuelman: www.fuelman.com
Global-Fleet: www.global-fleet.com
Gulf: www.gulffleetcard.com
Pacific Pride Services: www.pacificpride.com
P-fleet: www.pfleet.com
QuikQ: www.quikq.com
T-chek: www.tchek.com
Telogis: www.telogis.com
Tesoro: www.tesorofleet.com/lower48
Voyager: www.voyagerfleetnetwork.com
Wright Express: www.wrightexpress.com
360 Fuelcard: www.360fuelcard.com

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish