Fuel Lines January 2010

As a new year quickly approaches, it's an ideal time to review current policies that your company has in place. I can't think of a policy that can help your fuel management program better than reviewing what you are doing now for fleet fueling. And if you don't really have a policy, now is the time to start your fleet fueling program.

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 reduce unnecessary overspending. In this day and age, saving money and cutting costs are a great way to survive and to add to your company's bottom line.

We have talked about fleet fuel cards before, and the electronic capturing of fueling data at the pump through the use of electronic fleet fuel cards. By doing this, fleet managers now have timely, accurate data they can use to battle waste, abuse, theft and fraud. It is a very important tool in helping to control your fleet fuel spending. People are always surprised to learn that, on average, over 1.5 percent of a company's fuel budget is lost to fuel theft. We are talking about the kind of fuel theft that happens when employees at your company steal fuel from you. Employee theft accounts for 81 percent of the fuel that's stolen. The other 19 percent of the time, an outsider is 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, such as when a 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. Hours make differences, and as a fleet manager,you want to be able to quickly enforce your fleet fueling decisions.

We have all heard of fuel 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 a 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.

Following are eight tips that will make your fuel management program more effective:

1. Once your fleet fueling policy is in place, the next step is to communicate the new policy clearly to 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.

2. 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 cents 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.

3. 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.

4. 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.

5. Control the location, days, and time of day for fuel purchases. Frequent fuel purchases made with the company's fleet fuel card outside of business hours are a sure red flag of possible fraud 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.

6. Mandate one or more fuel brands to help control quality, consistency and the cost of fuel and services your drivers purchase. Take a close look at fueling stations in your area, and select those that offer the best quality for the best price. Those that offer bio fuels and bio diesel can also help lower your carbon footprint, which is becoming a large national topic.

7. Encourage fleet drivers to buy fuel at locations with pay-at-the-pump. Drivers will save time and get on the road faster by fueling at only pay-at-the-pump locations. It will also further reduce any chance of non-fleet fuel purchases inside the store.

8. Most importantly, you need to account for every fleet fuel card every day. Losses can be staggering if just one card falls into the wrong hands. A termination of an employee may occur, or a truck gets put out of service. Be certain to account for those cards. At a small company the loss could be small, but at a large company the loss could top six figures with the rogue use of just one card. These figures are not made up; we've seen it. Losses like this can not only be eye opening to fleet fuel managers but also devastating to a company's financial stability.

If you want to make 2010 a winner for your fleet management program, it is critical for every fuel manager to look at your fleet, identify the areas where you have the most problems and work through them. Having a fleet fueling policy at your company will ensure that your fuel management program is in good shape for the New Year.