Service to the Fleet

With fuel costs again on the rise, a fleet card network can attract new business while offering fleet managers the safety, security and reporting tools they need to be successful.

By Howard Riell, Associate Editor.

Fleet cards are a nice piece of business for c-store operators. But the key to keeping that business growing is keeping up with rapidly advancing technology that lets those cards do more for users than ever before.

“The fleet card business is a very stable business,” said Rich Steckroth, director of business development for Sheetz Inc. in Altoona, Pa. “There is nothing new or sexy about that particular part of the business, but it is an integral part of what we do and an important part of our growth strategy.”

Sheetz, which operates 406 stores in the Mid-Atlantic, outsources the servicing and portfolio management of its fleet card business to Wright Express, the South Portland, Maine-based provider of value-based business payment processing and information management solutions with more than 350,000 customers.

Last November, Sheetz unveiled a new pump shut-off feature that gives fleet managers more control over drivers’ fuel spending. The feature reportedly helps fleets increase operational efficiency, identify and reduce transaction fraud and better manage costs. It is currently available at participating merchant locations including, in addition to Sheetz, 76, CITGO, Conoco, ExxonMobil, Marathon, Phillips 66 and QuikTrip.

“We’ve been taking fleet cards at our retail stores for about 25 years,” said Lynn Olson, card lock manager for Auburn, Calif.-based Flyers Energy, formerly NELLA Oil Co., which owns and operates Flyers convenience stores in Northern California. “We issue the cards as well, so it’s a pretty big segment, and the two overlap really well.”

Flyers is also a branded distributor of Chevron, Shell, Valero and Flyers fuels for both wholesale and retail customers.

Diversifying the Offering
Olson estimated that fleet cards account for about 15% of the revenue generated at her company’s 30 Flyers retail locations. It operates approximately 30 standalone commercial gas stations in California, all with high-speed diesel dispensers, which have become significant profit centers for the oil company.

“Our traditional convenience stores supplement the outlying areas where maybe a commercial gas station didn’t make sense,” Olson said. “Normally, in high-volume markets,  we have commercial gas stations that have some unique features that  traditional gas stations do not have. So the two concepts play off of each other and allow us to have coverage for all of our customers across a wide network. That makes our brand offering a lot stronger.”

Flyers provides personalized services for its fleet customers that a standard Visa or MasterCard cannot duplicate. “We can produce the cards and develop a fleet card solution a lot faster because we have people who know the customers, who actually visit them and take care of them on a regular basis,” Olson said. “We also offer more security features on fleet sales than what’s offered at a traditional retail station.”

For example, Flyers locations can do product restrictions. “We can make the card good for diesel only or we can actually limit how many gallons are being sold to a particular fleet card customer with an exact cutoff right at the pumps,” Olson said. “So if one of our fleet customers said, ‘We only want the card to work on 10 gallons for the entire month,’ we can do that.”

At retail locations, such control is more difficult because they are usually equipped with multi-product dispensers. “Once you turn on pump 12, for instance, you can get premium, you can get diesel, you can get unleaded,” Olson said. “Most of our fleet customers only buy diesel, so we can police sales much more closely.”

Many Different Needs
C-store operators planning to enter or expand their fleet businesses need to be aware that not all fleet customers—or their needs—are alike.

“There obviously are different types of fleets,” Steckroth said. “There are the over-the-road guys and then there are the local maintenance and contractor guys, which are a different type of a fleet altogether. So it depends on what your business is all about. If we’re talking the long-haul guys, which are primarily serviced by the travel plazas, that’s one type of a program. If you’re talking the c-store on the corner type of thing, that’s a different type of business model.”

Thus, operators must craft their programs to meet the specific needs of their fleet customers. “If you’re a center-city type of operator, growing the fleet card business is probably not for you because you’re not going to find that many programs that make a whole lot of sense,” Steckroth said. “You really have to begin by developing a solid game plan about who you want your fleet card business to attract and how you are going to drive demand.”

Technology continues to advance. Earlier this year, Nashville, Tenn.-based Fleet One automated its online fuel card applications and credit approval processes. The change enabled the company, which provides fuel cards and fleet-related payment solutions to businesses and government agencies with vehicles, to quickly deploy a custom, Web-based customer application process, including electronic signature functionality, eliminating manual/paper-based processing and greatly improving internal communication and workflow.

In addition, turn-around times for credit approvals on applications have been improved. Fleet One merchant partners include such regional and national companies as Cenex, Chevron/Texaco, Circle K, Kroger, Love’s, Mapco, Murphy USA, Petro, Pilot, Sunoco, TA Travel Center, Valero and WilcoHess.

Comdata Corp., a provider of electronic payment solutions, also launched a cardless fueling solution for travel centers and transportation companies that reportedly provides a faster, more efficient way for drivers to fuel, while giving fleets more options to control the fuel-purchasing process. The cardless program uses radio frequency identification (RFID) technology to initiate transactions at the fuel terminal, instead of requiring the presence of a card to facilitate the process.

RFID tags installed in vehicles activate fuel terminals at approved RFID-equipped locations as the vehicles pull alongside them. By the time the driver steps out to the pump, the purchase has been authorized according to specific controls established for the vehicle. Love’s Travel Stops, operator of 215 Travel Centers nationwide, recently announced a rollout of RFID equipment compatible with Comdata’s cardless program.

With 150 convenience stores and Cardlock sites throughout California and Nevada, Flyers began issuing a co-branded Flyers Fleet Card to its customers late last year, giving them access to 230,000 fuel and maintenance locations on the Voyager network nationwide. Those 230,000 locations include such major retailers as BP, Chevron, Texaco, Circle K, CITGO, ExxonMobil, ConocoPhillips, Shell, Valero and hundreds more.

Flyers’ electronically controlled fuel cards provide access to 30,000 unattended and retail fueling locations. Security restrictions on each driver or vehicle card enable the fleet manager to determine when, where and what fuel each driver can purchase on behalf of the company. They also provide expense-management solutions for commercial fleets of all sizes, helping improve fuel-purchasing strategies, control fleet expenses and streamline expense reporting. Reporting solutions help accounting departments streamline expense reconciliation, including fuel costs as well as to quickly identify fuel tax refunds and owner-operator deductions.

Advancing technology will continue to play a role in expanding the fleet card business. This should create an opportunity for the convenience store operators. “If c-stores can actually begin to do product restrictions that will help fleet customers buy the products they need at the right price, this should continue to evolve as a high growth part of the business,” Olson said.

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