By: Eileen Goode (@eileengoode)
Unable to control what gas costs at the pump, companies have turned en masse to the use of fleet cards to mitigate some of calamitous effects of spiking prices. Such payment cards allow managers to track costs, negotiate pricing and lower fleet overhead by eliminating inefficient paper-based reimbursement processes.
Given their benefits, their popularity is unsurprising—up to 90 percent of fleets were using some form of fuel card by 2011, according to Stiel Direct’s study “2011 Trends in Fleet Card Payment Solutions. “ . As 2014 begins, gas costs have been on the rise, up 8.41 cents since early December 2013. Current price increases, however, are not expected to persist; increased production combined with decreased demand will likely keep prices at a level similar to 2013 , according to analysis by GasBuddy.
This prediction represents mixed news for fleet managers. Though 2013 represented the lowest U.S. fuel costs since 2010 the year was still the third most expensive for gas in American history, led only by the two years that preceded it, reports AAA.
With fuel costs set to remain at historically high levels for the foreseeable future, fleet managers are finding new ways to make purchasing cards even more useful. Fleet cards, when used in conjunction with analytics, help managers build better data sets, analyze their information more carefully and make better spending choices.
Data Is Power
Nearly all cards – whether issued by a bank, fuel company or specialized provider of fleet cards – will provide basic purchase information, including how much was spent and where it was spent.
However, as data-gathering and analysis techniques have advanced over the past decade, so, too, has the information available through the use of fleet cards. Providers are now looking past the basics and are using card programs to capture enhanced data, such as odometer readings, line-item purchase summaries and exact per mile costs, according to a report by fleet card processor Wright Express, now known as Wex Inc. Enhanced data-capture methods also allow fleet managers to keep better tabs on individual drivers, as this type of data capture requires the cardholder to enter a driver’s license or vehicle ID number for added security.
Fleets can use such information to lower costs in various ways, such as steering drivers to locations with negotiated pricing deals. Businesses also can link data gathered through the cards to a their telematics, dispatch and enterprise systems, which lower overall processing costs and up efficiency. Moreover, knowing how and when employees are using cards is a helpful tool for managers looking to set restrictions on their use.
Limitations on fleet-card use can include the types of purchases an operator can make, and limits on where, when and how much fuel they can purchase fuel.
With expanded data available on demand, managers have a greatly expanded ability to pick out and solve problems. For example, an analysis of card data that reveals a single vehicle in a fleet with much lower fuel efficiency than the rest could signal that the vehicle is in need of service, or that the driver is operating it incorrectly. Drivers using cards during nonbusiness hours too often or to buy an excessive number of Twinkies can easily be flagged, and companies can design loss-prevention programs to fix the problem.
While fleet cards may not always lower fuel cost, they potentially may lower the costs of doing business. As payment cards are linked to increasingly tailored data sets, managers are more clearly able to see where they are losing money and where there are opportunities for savings.