John Challen provides some simple solutions for managing and reducing a van fleet’s fuel bills
Fuel remains the biggest cost when running a typical commercial vehicle, which is it’s understandable that fleet managers search high and low for the best ways to reduce this expense. Options range from changing where the vehicles are refuelled to fuel cards to telematics, with each having benefits of varying degrees.
“Among the fleets with which we work we see a wide range of different results when it comes to fuel management,” says Chevin’s managing director Ashley Sowerby. “This is a cost area where some fleets have strong and definite policies, while others have a much more laissez-faire attitude and believe that the issue cannot really be successfully managed.
“Our experience is that the latter is wrong. Diesel and petrol spending is something that very much responds to determined managerial action. While we may be going through a period when prices have generally fallen, this will almost certainly be temporary and they will again increase over time.”
Much of it might seem straightforward, but Chevin’s advice for fuel cost management is based on six tips:
1) Have the right vehicles for the job
2) Only make necessary journeys
3) Use a fuel card
4) Buy at the cheapest outlets
5) Check the grade
6) Track driver and vehicle behaviour.
Fuel cards are a popular route to go down, and they have come a long way since they were introduced for commercial vehicles and company car drivers. As well as the retail fuel card market, there are also the commercial rate and Diesel Direct (a bespoke product for diesel fuel) categories.
“Up until a few years ago, when fuel prices were fairly stable and fairly low, the people who had fleets of cars were looking for convenience, so went with retail fuel cards,” explains Steve Clarke, group marketing manager at The Fuel Card Group, a company that supplies fuel cards through brands such as The Fuelcard People. “However, people with commercial fleets then got a lot more interested in reducing fuel costs, so switched over. We are getting a lot more people, who were using retail fuel cards, change over to commercial rate because they want to take advantage of cheaper prices.”
To give an indication of the size and scale of the fuel card industry, Clarke states that The Fuel Card Group has around 50,000 business customers, translating to a share of around 20% of the market.
“It’s hard to get accurate figures, but we know what we do, and what the competitors do,” he says.
“One thing will be getting rid of the plastic card and moving towards smart technology via phones or tablets,” he says.
“The other thing is that we will not just be supplying customers with a straight fuel-purchasing product, but also with a fleet management tool. We’ve always had good information to help people calculate good fuel economy, and find out which vehicles are performing better than others, but we haven’t been the best at relaying this information. It is not just supplying the customers with a way to control their actual fuel costs, but also looking at a way to control driver behaviour.”
10 things your fuel card should give you
1. 100% VAT compliance. Fuel cards make it easier to claim VAT back – you will get an itemised, HMRC-approved VAT invoice so there’s no need to keep receipts or log transactions manually.
2. Control of your fuel purchases. Lock down fuel cards to certain purchases only, such as diesel, fuel or specific vehicle-related goods, such as oil.
3. A tailored solution .Because one size doesn’t fit all, your fuel card supplier should be able to offer you a range of fuel card products.
4. Free extras. As part of the package, you get reporting on fuel usage, mileage reporting and tracking, online account management, and customer services access.
5. Savings. Whether it is a more efficient fleet, or reduced admin costs, fuel cards should save you money
6. An easier life. Fuel cards make reporting on your business fuel usage more straightforward and allows you to spot when staff are filling up their vehicles on the fleet – or their own private vehicles – when they shouldn’t be.
7. More than a card. Extra products are available from fuel card suppliers, such as vehicle rental and expense systems.
8. Access to the right fuel stations. Make sure you are using a fuel card network, not a credit card network – the stations you use should work for you, and your drivers.
9. Staff benefits. Life should be easier for everyone with fuel cards. Make sure drivers don’t have to spend hours filling in expense forms by letting the fuel card company do all the hard work.
10. Accurate reporting. You shouldn’t have to spend hours checking and monitoring the details that staff give you. Fuel card data allows you to have confidence in the system, making the whole business more efficient.