Fleet Card Facts
There are an estimated 650,000 fleets in the U.S. for a total of nine million vehicles.
Currently, fleet cards are the fastest growing segment of MasterCard’s business.
Most fleet cards offer valuable and robust reporting/management tools
The tools can track mile-per-gallon variances, driving patterns, fuel purchases, calculate various tax exemptions and more.
Tony Martin, general manager of a WoW! Super Station in Fraser, Michigan, loves to see the big trucks roll in. With 26 pump handles in front and six in the rear of the Wow! three-acre facility, “we’re designed to handle the big rigs,” he said.
Not only do professional drivers pump plenty of fuel at the Super Station, but they shop inside the store, too. “They tend to buy a lot of fast food,” Martin said. “Four packs of Red Bull are very popular with my drivers if they’re going to be on the road for a while.”
And to ensure that truckers feel welcome in a store two miles from the nearest highway, WoW!, a division of Detroit-based Atlas Oil Corp., accepts a wide range of fleet cards. “If you want to handle big trucks and sell a lot of diesel, that’s what you do,” Martin said.
Fleet cards are similar to credit cards and usually feature the fleet’s name and logo. They are used by government agencies and businesses with multiple vehicles for purchasing fuel and sometimes maintenance. Since fleet cards were first introduced in the 1960s, they’ve eliminated the need for professional drivers to carry cash to pay for fuel and other driving expenses, as well as the need for fleet operators to manage a fuel-related cash reimbursement system.
In the 1980s, the widespread use of computers helped the fleet card industry expand rapidly, but it was the introduction of the magnetic stripe and the magnetic card reader that made the tool so valuable. A fleet card with a magnetic stripe permits computers to collect information on fuel pump transactions and then manage that data to produce reports. The fleet manager uses the information to determine how the organization’s money and vehicles are being used.
Fleet Business Growing
With an estimated 650,000 fleets in the U.S. comprising approximately 9 million vehicles, today’s fleet market is huge. The U.S. government operates the biggest, with more than 650,000 vehicles on the road, according to data from the General Services Administration, but there are plenty of small businesses, such as florists, bakeries and delivery services, operating two- and three-vehicle fleets.
“The real benefit (of accepting fleet cards) for convenience store operators is that it gives them access to this large market,” said Mike Olenicznek of the Voyager Fleet Card program, which offers users about 200,000 fuel and maintenance locations throughout 50 states.
Compared to the everyday credit card, Voyager provides fleet operators with detailed information and security advantages. It allows fuel purchases to be controlled by assigning each driver a PIN number, puts restrictions on the types of purchases that can be made with the card and even allows purchases to be limited by type of product, time of day, number of transactions daily and other variables.
“Customers come in and the card is swiped through a card device,” Oleniczek explained. “Sometimes the driver may be prompted for the current odometer reading.”
Fleet managers want to manage expenses, and for that they need a good back-end system. “Voyager software collects detailed transaction info and provides it to the fleet manager. It tells the manager who is buying premium when they should be using unleaded,” Oleniczek said. “It can be used to calculate how many miles a car is getting per gallon.”
Not only do the tools help track expenses and fuel consumption, but they provide information that helps managers determine how well the vehicles are performing and make decisions regarding use and maintenance. Depending on the card and its specific tools, fleet managers may receive information that allows them to determine mile-per-gallon variances, driving pattern discrepancies, excessive or questionable fuel purchases and each transaction made to the account. In addition, the tools can calculate and report the various tax exemptions that are allowed by law.
Most card issuers provide fleet customers with suggested do’s and don’ts in order to make the best use of the cards and receive full value from the tools.
More Info in Less Time
Joe LaRosa is the director of global fleet for Abbott Laboratories, a major healthcare organization based in Chicago, and he knows the value of fleet cards firsthand. LaRosa is responsible for 7,500 company vehicles in the U.S. and an additional 1,000 in Canada and Latin America. He looks for a fleet card provider and fuel chain that offers drivers an end-to-end solution.
At one time the company used American Express cards to keep those vehicles on the road, but it eventually switched to Wright Express, a fleet card operator that collects data at the point of sale and provides managers with analytical tools and purchase-control capabilities to better supervise their fleet’s expenses.
“American Express gave us no detailed information, only the total numbers of what we’d spent,” LaRosa said. “Wright Express offers a fleet card with more security and provides a complete analysis of our fuel spend.”
Now LaRosa knows the date and time of each driver’s fill up and can determine the fuel efficiency of individual cars and operators. “I may see that one driver is getting 27 miles per gallon and another is getting 17,” he said. “Is this the result of driving habits or shrinkage?”
Where Management Tools Begin
Much of the information used by fleet operators is collected by a major credit card company, such as MasterCard, and then transferred to the card issuer, which may be a local bank. Typically, each card issuer will offer customers its own version of management tools and reports.
“MasterCard provides the platform,” explained Marcie Verdin, senior vice president of Large Market Segment Commercial Products for MasterCard Worldwide. “We do all the heavy listing and the issuers get the economies of scale.”
Currently, fleet cards are the fastest growing segment of MasterCard’s business, and Verdin expects that trend will continue. “The more fuel costs go up, the more volume we’re seeing on cards,” Verdin said. “Fleet operators can’t manage this manually.”
Don’t Leave Home Without It
As the fleet marketing manager for Sinclair Oil Corp. in Salt Lake City, Greg Iverson, executive vice president of business development, introduced fuel distributors in a 22-state area to the Wright Express fleet card.
“It’s a Sinclair card with Wright Express, and it works at Sinclair dealers and other providers in the Midwest and Mountain states,” he explained. “Distributors use the program however it best supports them in their relationship with their customers.”
Despite the obvious benefits of using the cards, there are still some fleets that operate without them. According to Iverson, 80% of small fleets (seven vehicles or less) do not use any type of fleet card, and that means they miss out on the convenient management tools that go with them.
“The best way to manage your (fleet) business and save money is to use a fleet management tool,” he said. “They have robust reporting, including a lot of online reporting tools. You can identify inappropriate fueling of non-company vehicles and better manage your assets.”
There is rationale for why convenience retailers should accept a wide range of fleet cards.
“Fleet cards can be a good tool for stores to drive business for fuel, but also in other areas,” MasterCard’s Verdin said. “Drivers will use the convenience store to purchase food or other items, which provides the store additional revenue from the sale of these products.”
Oleniczek, of Voyager, agrees that professional drivers are likely to become loyal customers of retailers that accept the card they carry. “The drivers are less price conscious than the average consumer,” he said. “Once they are in the habit of coming to your store, they are less likely to go somewhere else to save a few cents.”
To meet the growing demand for fleet card services, many operators are hurrying to solidify fleet operations. For example, Love’s Travel Stops & Country Stores, operator of 200 stores in more than 30 states, reached a deal to deploy Postilion solutions to enable the company to centralize fleet card authorization and transaction capture.
The Oklahoma City-based chain chose Postilion, a provider of integrated solutions for payment processing and self-service banking, because they are able to streamline its authorization and transaction capture process by integrating payment for fuel at the pump with traditional retailing, despite the complexity of the travel industry and the range of fleet cards used to purchase fuel.
“Given our current goals for growing our stores by 15 locations a year and the increasingly tighter margins on fuel purchases, it was imperative that we find new ways to streamline our transaction processing,” said James Xenos, vice president and chief information officer for Love’s Travel Stops.
“The Forecourt and POS Payments solution and the Payment Switching solution enable us to further control the payment transaction authorization and settlement process,” Xenos said, “which in turn reduces our costs and improves our fleet customers’ overall experience at the pump and in the store.” CSD