Fleet News

Fleet managers can take control with fuel cards

Direct fuel injection and the latest twin-turbo boost technology are set to allow next-generation company vehicles achieve significant improvements in fuel economy.

But the people driving them will also be vital components in the battle to counter the effects of future increases in operating overheads.

Spiralling pump prices mean they face a front-line role as fleets look to make economies across all aspects of company travel.

“More expensive fuel hits everything that touches our lives and trying to contain the cost of it is of fundamental importance.

"The simple solution is to drive less and consume less,” says Adrian Harris.

As the man responsible for the 450-strong fleet operated by Pertemps, Britain’s largest private recruitment agency, Harris can qualify his point with a lot of practical experience.

An in-house team has developed a systematic management process for the 1,000 vehicles used by Pertemps staff. Called Midas, the process was soon producing annual savings in fuel costs of £50,000 and trimming overheads by 5%.

It was such a success that it became a group subsidiary company and is now a component in the Shell fuel card system.

“Most people tend to do nothing about fuel management because they don’t believe that they can,” says Harris.

“But they wouldn’t dream of supplying their staff with open cheques for expenses because they might not be truthful in their claims.

“My point is that exactly the same applies when companies provide vehicles and fuel.

"It is essential to have control systems in place and the biggest one is the fuel card, which controls where fuel is bought, what it costs and can even provide rebates of up to 5p per litre in some cases.

By far the biggest factor in reducing costs relates to using less fuel. Fleets need to monitor fuel use carefully by looking at drivers’ habits and what journeys they do.

Harris claims that rather than being a Big Brother tool, Midas ensures drivers purchase best-value fuel, behave sensibly and think twice about undertaking unnecessary journeys.

“We changed from making AFR payments to actual pence per mile when we switched to Midas and cut our costs by 50%.

"We also saw annual mileages drop from 20,000 to 15,000 and they’re still falling,” he says.

Arval head of business development Meryl Gilbert believes companies that are serious about cutting fuel costs need to fully understand overheads in order to set realistic savings goals.

“Fuel cards provide an essential tool to track performance against these targets, pinpointing where any corrective action is necessary.

"Fuel card reporting is the most accurate way to map fleet mileage from a total level down to individual vehicles or drivers.

“However, fleets must ensure they select a card with good network coverage so that drivers don’t need to deviate from their routes to find forecourts where they can fill up,”
she says.

Gilbert believes a written fuel policy is important in setting out drivers’ responsibilities to operate in the most cost-effective manner.

“Without giving drivers advice and clarity around the efficient use of fuel, it is unlikely they will manage their fuel effectively, let alone reduce spend.

“Within a location, they can make significant savings by consistently filling up at the cheapest fuel sites, where the price differential between the most expensive and the cheapest forecourt can be several pence per litre.

And if drivers have no option but to refuel at a higher cost site – on a motorway for example – they should be encouraged to take only enough fuel to get them to a cheaper fuel station.”

According to Gilbert, managing the way employees drive reduces costs only if drivers support the action.

“Ongoing communication to influence driving style and purchasing behaviour is essential in keeping control of costs.

"A clear and consistent communications policy embeds this message across an organisation and provides drivers with the tools they need.

“Trained drivers have the potential to cut consumption by between 10% and 15%.

Every driver should plan their journey – significant cost savings can be made by considering the quickest and cheapest route, when to travel, whether anyone else is taking the same journey whether a car is the best option and whether the journey needs to be made.

Pump price savings and more

Fuel cards represent far more than the potential to make savings on filling station forecourts, claims Shell UK fleet marketing manager Chris Shane.

“Reducing cost is a priority at the best of times and one of the main benefits of the card is that it saves time and money in the office as well as reducing pump prices.

“One of the biggest challenges of fleet operation is making sure that all VAT is reclaimed, along with all the expenses incurred by drivers.

Using a fuel card means you get a single VAT invoice, so you don’t have to spend time trying to gather up handfuls of receipts from various drivers.

“And the on-line functions that come with cards also tend to make life easier.

“We deliver our invoices in a PDF format that can be retrieved for a period of 13 months.

“It is also available for up to three different users to allow different departments to have access,” he says.

For larger companies, Shell is able to download information in electronic format to interface with office systems.

“The less businesses have to spend on administration, the less they spend overall – and fuel cards add up to big savings,” says Shane.

Navman link promises savings

A new link with Navman promises extra savings to fleets, claims The Fuelcard Company.

Joining forces with the vehicle tracking specialist means TFC customers can now access preferential rates on hardware providing real-time information on driver activity.

“Tracking presents great opportunities for fleets to cut costs and increase efficiency, so this partnership should prove extremely beneficial.

“One customer with 25 vehicles is estimating annual savings of £100,000 in fuel and another has calculated annual savings of £25,000 by cutting back on vehicle engine idling times,” said TMC managing director Jakes De Kock.

Cracking down on fuel fiddlers

Mileage capture services soon pinpoint phantom fuel purchases made by employees.

And the computerised systems can cut business mileage pay outs by a quarter in a matter of weeks, claims Paul Jackson.

“Our average saving over the past four years has been 24.7%,” says the managing director of The Miles Consultancy.

”We’re achieving this level of saving after six months for customers who are already reasonably diligent about checking fuel and mileage expenses and it is not unusual for us to find 1,000 miles a month being fiddled.

“Some employees regard mileage claims as a second income stream,” he says.

Jackson claims it is easy to highlight exaggerated claims because his company audits the odometer readings of almost 100,000 drivers who report into the TMC system.

“As fleets typically pay fuel mileage rates of 10p to 15p per mile or up to 40p per mile in approved mileage allowance payments to grey fleet users, eliminating unnecessary mileage offers by far the quickest route to cost savings.

"Customers only have to achieve a saving in mileage or running costs equivalent to seven miles per driver per month to cover to cost of our mileage capture.

“We all know that every little helps, but shopping around for cheaper fuel or encouraging drivers to be more fuel efficient will not achieve anywhere near the scale of potential savings we can deliver,” he says.

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