One of those running costs that businesses take for granted without the realisation of fleet fueling. Fuel costs are recurring and massive on financial statements, month after month, and are hardly subjected to the kind of close examination they deserve. That’s costing them a lot to accept their acceptance. The figures behind that figure are a complicated mix of individual transactions, driver actions, routing inefficiencies, purchasing habits, and more, that slowly eat into fleet budgets without most operators being able to quantify. Esso fleet fueling cards address this problem by connecting drivers to station networks with negotiated pricing while giving managers the data to measure whether routes and fueling stops are actually costing what they should.
It’s not a technology problem when moving from passive fuel spending to active fuel management. It is a problem of sight. If you can find a way to overcome the visibility challenge, you’ve overcome the cost challenge.
Why Traditional Fuel Reporting Falls Short
Most fleet operations are based on “old” financial data. Fuel receipts are collected, submitted, reconciled and then ultimately combined and reported on a monthly basis which arrives weeks after expenditure. By the time a problem is surfaced during that reporting cycle, the driver has 8 more times gotten gas.By the time a problem is detected during that reporting cycle, the driver has already refueled 8 more times, the problem pattern has been reinforced, and the opportunity for intervening on the source has passed.
There is also a lack of granularity with traditional fuel reporting. A $45,000 fuel bill a month is a lot of information to a fleet manager. It does not give insight into the vehicles that are exceeding their efficiency benchmark, who are buying cars outside of their approved scheme, which routes are having an excessive fuel cost, or if the fleet is experiencing competitive fuel costs or systematic overpayment. The numbers are aggregated and don’t reveal the detail that leads to corrective action.
In addition, the manual reconciliation procedures create another degree of error and delay. It is labour intensive, involves cross checking with bank statements, checking odometers and matching transactions to vehicles, and wastes administrative time without providing useful insight. The result is a historical document, not a management document.
The true definition of Better Cost Visibility.
Simply seeing more data isn’t enough for cost visibility in fleet fueling. It’s all about being able to see the right information, at the right amount of granularity, at the right time.
The beginning is real-time transaction visibility. All fuel purchases (during the purchase, from the person, the location, the type of fuel, the quantity, the price per litre and the time of purchase) must be displayed in real time to the fleet manager, not weeks later in a report. This instantness converts fuel data from a record to a signal for operations.
The next level is to compare to benchmark. The real value in raw transaction data comes when it’s compared to already known performance thresholds. The cost per litre is compared with the fuel price within the region to see if the cost of the fleet is competitive. Litres per 100 kilometres compared to manufacturer’s specifications and historical fleet average will alert vehicles that have slipped outside of acceptable limits, which is not something maintenance schedules can detect — and is often indicative of driver behaviour or tyre pressure issues.
Spend allocation allows organisations to get smarter with spend data – by cost centre, department, driver and vehicle type. If fuel costs can be seen in this much detail, then they’re not an opaque expense anymore, they’re a set of variables with clear owners, and clear parameters for what constitutes good or bad performance.
How Fleet Fuel Cards Can Enhance Visibility
Fleet fuel cards are still the most usable building block for an integrated fleet cost visibility. Purpose-built fuel cards record structured information at the point of sale — automatically associating every transaction with a vehicle, driver and odometer reading without the driver or administrator having to enter the information.
It’s structured data capture that enables meaningful reporting. Once each transaction is tagged with vehicle ID, driver ID, litres bought, fuel type and location, the reporting system has all the ingredients for useful analysis rather than just transaction lists.
Today’s fuel card management platforms add analytics to that transaction data. Exception reporting highlights purchases that exceed specified limits in the following areas: purchases exceeding authorised purchases for litre, purchasing from unsuitable locations, fuel grade mismatch and purchases outside of operating hours. Those exceptions occur automatically, without the need to interrogate the data manually, and help to identify anomalies as they happen.
The additional network restrictions imposed on fuel card programs add to cost control. By restricting purchases to a network of approved pumps where the business has negotiated its price, each litre bought guarantees that it will have contracted rates and not whatever the pump might show at an unknown service station. Data capture, exception alerting and network restriction transform a fuel card from a payment card into a cost management tool.
Driver Behaviour and Its Direct Impact on Fuel Costs
The cost of fuel to a fleet is not a standalone expense; it’s a part of the whole operation. Most fleet managers would not include driver behavior in their cost modelling in a more direct way than it is applied in this case. High figures of consumption which go beyond what the vehicle ought to need for the distances being traveled are due to aggressive acceleration, too much idling time, running the vehicle on the highway at speeds outside its most fuel-efficient range, and inadequate route selection.
Greater visibility of the cost allows you to make the link between driver actions and the cost clear, not assumed. If a fleet manager can tell that a particular driver is consistently at 14 litres per 100 kilometres, while the fleet average is 10, the discussion moves from a general reminder about fuel efficiency to a discussion which is data-driven and measurable about the driver.
Accountability structures that do not exist with general reminders and policy documents are found in driver scorecards (which include fuel efficiency measures along with safety and productivity metrics). As drivers know that their fueling practice is being monitored, benchmarked and reviewed, they behave differently to expectations of improved fuel efficiency compared to those working in a context where fueling practice has no apparent consequence.
Putting Visibility into Repeatable Savings
Improving cost visibility doesn’t mean saving money upfront, it’s a change in how fleet fueling costs perform throughout the year. Transparency, not assumption, is a consistent driver of businesses that have implemented real-time transaction visibility, granular spend allocation and driver-level performance benchmarking to stabilize and decrease their fuel costs over time.
Things that were previously anomalies that were not noticed and would have been ongoing for months now are caught within days. Those that were oriented towards higher cost products are re-routed to approved networks. Mechanical inefficiency is detected through the consumption and the car is serviced before the problem escalates. Only targeted coaching, not blanket policies, is able to correct driver behaviors that drive up costs.
But with cost visibility, fuel remains a significant cost for the fleet. It turns fuel into a managed cost — that’s a significant advantage for business at the bottom of the year, but one most businesses are not aware of.
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