David Rewers will tell you that fuel cards are not new to the trucking industry. He should know as he's been involved in fuel-card programs for over two decades now. But what is new, says Rewers, group vice president-fleets for Fleet One, is how carriers large and small are trying to get fuel cards to provide “actionable information” they can use to drive up efficiency and drive out cost within their operations now and in the future.
“The key here is ‘actionable information,’ not just data,” he explains. “Are you making sure you're taking advantage of all available discounts at the truck stops where you buy fuel? Are you buying fuel where it's least expensive? And are you building your routes around this information?”
One such piece of actionable information revolves around the location of a specific vehicle to a refueling source within a fuel card's network. To address that issue, Fleet One rolled out a “location finder” texting service last year so truck drivers could use mobile phones and the Internet to easily find fueling locations that accept Fleet One fuel cards.
Fleet One's service is accessed by sending a text to 48696 with the message FLEETOTR (for over-the-road drivers) or FLEETLOCAL (for local drivers) for a link to search and sort refueling locations based on preset criteria. Drivers can further search specific stores for fuel type and brand and get contact information or directions for the location, notes Rewers.
Other companies are doing away with plastic cards altogether. Transportation Clearing House (TCH), for example, has partnered with Zonar Systems to develop Z-Con. This Zonar-built telematics device relies on a series of sensors, radios and computers to consistently and accurately identify a truck when it enters and exits refueling lanes at truck stops (see sidebar for more details).
Ted Jones, president of TCH, says this new technology originally was designed to help customers eliminate diesel fuel theft at the pump but also offers a way to vastly improve fueling information accuracy and transmission back to the fleet while eliminating the potential for human error. Z-Con also makes the fueling process more efficient for both the driver and the truck stop, eliminating the need for plastic fuel cards and paper receipts, Jones adds. Plans call for a rollout of the device early this year.
“Eventually, what we hope to do with Z-Con is tap into more of the information coming from the truck electronically — odometer readings, locations, even engine fault codes — and provide that to fleets,” Jones explains. “We want to be able to offer a seamless transfer of information while the driver is at the fuel pump, without the driver, the fleet or the refueling location having to do anything.”
Yet Jake Sitler, general manager of card provider Multi Service Fuel, stresses that developments such as these don't mean tried-and-true plastic fuel cards are going away anytime soon. In fact, Multi Service is now segmenting its fuel-card offerings so fleets, especially smaller carriers, retain the option to use either traditional fuel cards or ones that feature a variety of different attributes. “Many fleets still want to use fuel cards like they always have,” Sitler says. “But others want more — the ability to manage their accounts via mobile phones and to track fuel discounts. Fuel cards themselves are really like cell phones; they are a dime a dozen. The real value lies in the service plans and options available via the fuel-card program. That's what makes all the difference.”
“Virtual” fuel cards
The new Z-Con technology package being rolled out by Transportation Clearing House (TCH) and Zonar Systems is designed to take fuel cards to the next level — basically by doing away with them. The system authorizes fuel pump transactions with security checks and multiple validations by using a Zonar telematics device to identify vehicles when they enter and exit a diesel fuel lane.
Here's how it works: As a vehicle approaches a Z-Con-equipped fueling island, an ultrasonic sensor detects the presence of the truck, activating both a radio in the fuel canopy and an infrared transmitter. Once the infrared transmitter and the receiver in the truck are aligned, a light emitting diode (LED) on the windshield of the truck indicates to the driver authorization is in progress.
After the truck's vehicle identification number has been validated, the LED indicates that the driver is authorized to begin fueling. The entire process takes seconds to complete, says Ted Jones, TCH president.“Z-Con eliminates the need for drivers to swipe a fuel card or enter data to initialize a transaction, removing the possibility of inaccurate information and guaranteeing proper authorization and secure fueling,” he says. “Z-Con also terminates fueling when the vehicle leaves the pump area, ensuring that only the correct truck is fueled.”
Designing new data security standards
Fuel card providers are joining forces with American Express, Discover Financial Services, JCB International, MasterCard Worldwide and Visa in backing the Payment Card Industry Data Security Standard (PCI DSS), among many other new security efforts. PCI DSS requires merchants and service providers that store, process or transmit customer payment card data to adhere to security controls and processes that ensure data integrity.
“Participating in the efforts of the PCI Security Standards Council to develop standards across the board is a continuation of our commitment to providing customers the most secure payment processing environment available,” explains Michael Dubyak, chairman & CEO of Wright Express.
A more thorough scoping exercise prior to assessment in order to understand where cardholder data resides is one of the key revisions to PCI DSS, notes Bob Russo, general manager of the PCI Security Standards Council. Others include promoting more effective log management in securing cardholder data; allowing organizations to adopt a risk-based approach when assessing and prioritizing vulnerabilities based on specific business circumstances; and accommodating the unique environments of small merchants to simplify their compliance efforts.
“Data protection is critical, ” adds Joseph Daly, executive vice president-operations for Comdata. “We share PCI's commitment to providing the highest standards of data security.”
Apps for fuel cards
One of the latest twists in the fuel-card business is the development of smartphone applications, or apps, to provide a range of new services for users.
Pacific Pride Services, a subsidiary of Wright Express, deployed a location-based app for Apple iPhone users powered by MobSpree. It helps guide truck drivers to refueling sites based on current vehicle location, fuel type required, maintenance services, and even special promotions from nearby Pacific Pride marketers.
“MobSpree's mobile app platform [allows] drivers to find Pacific Pride locations quickly and safely; our franchises can deliver new customized solutions to their customers; and most importantly, we can add new value to our relationships by sponsoring the overall platform,” explains Gregory Iverson, Pacific Pride president. The app is available at http://www.itunes.com/apps/PacificPrideFleet, and will soon be available for other smartphones.
Don't forget the basics
According to a white paper published by Multi Service, fuel cards provide fleets with a wide range of benefits such as access to credit for a daily operating expense, cost savings at the pump, reimbursement or reward programs for qualified transactions, and crucial data for helping carriers reduce costs.
Yet, just as no two fleets are the same, the benefits provided by various fuel card companies are not interchangeable among fleets. For example, Jake Sitler, general manager of Multi Service, says his company's clientele is made up of fleets with 50 or fewer trucks — a very different operational footprint compared to a fleet of a 1,000 or more units.
“Depending upon the size of your fleet, the types of drivers you utilize, the routes you travel, and your specific credit needs, there is likely one best program to streamline your corporate operations and save you dollars,” he explains.
Both the price a fleet pays for fuel and the price fleets pay for the convenience of a fuel card are two of the fundamental factors guiding the fuel card selection process at the outset, Sitler notes. First, fleets need to ensure that they'll pay the cash price for fuel whenever the card is used because the cash price is typically lower than the price of diesel purchased with a credit card.
“When your fleet is pumping hundreds of gallons of fuel each day, those pennies per gallon add up to significant dollars quickly,” he says. “You also need to understand all fee requirements upfront and how they affect your overall fuel savings. Find out if the company offers any type of rebate, refund, or reward program to help you recoup those costs.”
Fuel cards generate economic data
The transaction data fuel cards record is now being used as a way to measure the overall health of the U.S. economy in real time.
Ceridian, the parent of fuel and payment card provider Comdata, had for years relied on employment data to craft internal economic forecasts. Then the company noted something interesting: the fuel transaction data captured by its Comdata division actually functioned as a “leading indicator” of economic growth or contraction, compared to the “lagging indicator” nature of changes in corporate payroll.
Craig Manson, a senior vice president with Ceridian, tells Fleet Owner that the correlation between the direction of the economy and fuel purchases is pretty straightforward. Every time an over-the-road truck makes a diesel fuel purchase using a Ceridian card, the company's database captures the location and number of gallons pumped into the tank. The data is then analyzed to provide a detailed picture of over-the-road trucking activity, he explains.
“Over time…we found that fuel purchases would drop significantly ahead of an economic downturn, and rise just as significantly ahead of growth,” Manson notes.
Ceridian figured it had something, but didn't quite know how to take its raw fuel-card data and turn it into a tool capable of forecasting broader U.S. economic trends.
Enter the economists at UCLA Anderson School of Management and Charles River Associates. They've taken Ceridian's fuel-card data and transformed it into the Ceridian-UCLA Pulse of Commerce Index, known as the “PCI” for short, a monthly indicator that's been proven to track closely to the Federal Reserve Industrial Production number.
“Some economic indicators have a lag time or are based only on surveys of business leaders' attitudes,” explains Ed Leamer, chief PCI economist and director of the UCLA Anderson Forecast. “The PCI is based on real-time, actual consumption data that provides fact-based insight into the economy well before monthly industrial production numbers are issued. This timely insight helps businesses and other interested parties get a jump on what's happening inside the U.S. economy.”
The time savings
Fuel cards are by their very nature designed to help fleets lower the overall cost of their fuel bill by consolidating purchases and maximizing discounts. But one study finds another potential savings: a reduction of paperwork.
Fuelman, a subsidiary of FleetCor, sponsored a study by consulting firm Havill & Co. last year to examine the many ways fuel-card programs can benefit fleets.
According to its research, Havill said 73% of all the respondents to its survey said maintaining a complete fleet fuel management program — one that includes the use of fuel cards — significantly reduces the amount of time spent on collecting, recording and reconciling fuel purchase receipts.
Fleets operating 50 or more vehicles witnessed an even more dramatic time savings, reporting that they had eliminated a day or so per month of administrative work by having a fleet fuel-card program in place.