Paul Holland of FLEETCOR explains how advanced fuel cards can benefit public sector organisations as the effects of Brexit are likely to send British fleet costs soaring.
Cost saving is an obvious strategic pillar for all organisations, particularly given the current uncertainty in the UK economy. However, cost management is more important than ever for public sector organisations, which have suffered in recent years due to government spending cuts. Can advanced fuel cards offer a solution?
The UK Government’s austerity measures have been in place since 2010 and, almost a decade on, they are showing little signs of abating. This is highlighted by a recent report from the Automobile Association, revealing that three in five councils in England cut their transport budget in 2017/18. Furthermore, nearly all councils in England plan to raise council tax and increase charges in areas which include: waste, parking and social care. This forms part of an effort to make ends meet this year. Primarily, this is due to the introduction of government schemes such as universal credit and the 1% rent reduction.
For public sector organisations that rely on a fleet, this downward economic pressure is exacerbated by the rising cost of fuel and vehicle maintenance. With this in mind, how can they strategise to make their fuel go further today, reduce costs and be better equipped to cope with spending cuts? The following offers potential solutions for public sector organisations to keep their fleet costs low.
Harnessing the latest technology to spot inefficiencies
By capturing data available within a fleet vehicle such as mileage, the number and frequency of fuel stops, and maintenance logs, it enables operators access to a wealth of information that can help them improve fuel efficiency.
With this detailed information available at their fingertips, public sector organisations can take back control of costs. For example, they are able to work out which vehicles in their fleet are inefficient when it comes to fuel use and maintenance, allowing them to implement strategies to remedy this. Access to this type of insight is simple for many organisations because fuel cards, such as those offered by Allstar Business Solutions, often provide this as part of their service. For example, Allstar’s advanced fuel cards work in conjunction with a business mileage monitor, which provides in-depth reports on journey details, such as precise pence per mile calculations without the need for receipts. When this is paired with the information offered by telematics, operators can deliver further efficiencies across their organisation.
Cross reference data with telematics
Fleet operators can gain access to a more intricate level of management information by digging further into their own data using telematics. This can be invaluable in assessing the efficiency of drivers in relation to fuel consumption, the impact of average speeds and whether the routes being taken by drivers are the most efficient. Operators can then use this information to develop tailored training programmes for their drivers which are designed to improve driving techniques and behaviour.
United Parcel Service (UPS) drivers in the US are told to avoid making right hand turns unless absolutely necessary. According to UPS, avoiding turning into oncoming traffic has saved the company around ten million gallons of fuel and minimised the risk of accidents.
Staying on top of maintenance
Fleet operators should ensure they properly operate and maintain vehicles as, inevitably, those that run on dirty engines or worn tyres have to work harder and use more fuel to do so. On the surface, the cost of this additional fuel may seem negligible, but the reality is that the overall financial implications can be substantial. Keeping a vehicle booked in for regular services from a professional mechanic can identify underlying issues. Often, the earlier the issues are spotted, the less they will cost to remedy.
This is particularly pertinent considering that the cost of maintenance itself is currently on an upward trajectory. Car owners spent an average of £707 (~€794) in 2016 and with Brexit on the horizon, maintenance costs could increase significantly. Operators could soon see up to 10% added to their servicing bills, potentially costing an extra £70 per service as a result of post-Brexit tariffs and trade barriers.
Opt for advanced fuel cards, a solution that goes beyond fuel
At the most basic level, fuel cards offer an effective payment solution for the purchase of fuel. However, technological advancements have improved the options they can now offer. Advanced fuel cards are now able to function as a data capture mechanism and a fuel solution. They can also open up access to cost savings through added value functions.
More advanced solutions, such as those offered by Allstar Business Solutions, can offer a payment solution that streamlines processes to ensure that fleet operators are able to save one of the most valuable commodities they have – time. It is with time-poor fleet operators in mind that the company developed the Allstar Plus VISA card, a fuel card that goes beyond its core offering to function as a combined fuel and expenses card to cover all on-the-road spending.
This offers drivers the freedom to complete purchases for fuel and other expenses without the need for operators to authorise each transaction. Simultaneously, it improves control for fleet operators, who are able to set spending parameters for each card, including:
- Cost limits
- Number of purchases or
- Volume of fuel bought.
This ensures that drivers stay within the company expense policy and works to eliminate risks of fraud, should the card be stolen.
Utilising advanced fuel cards in this way actively provides organisations with a HMRC-friendly invoice for all fuel purchases, as well as a consolidated statement for all other expenses that are amassed through the VISA network. As a result, operators are able to spend less time on payments and operational administration and, instead, can focus on more strategic tasks for their organisation, thus providing another opportunity to reduce costs.
An expense solution
By following some of these simple steps, public sector organisations can bring greater efficiency to the fleet vehicles they use, whilst driving cost efficiencies for their organisation in uncertain times. It’s due to our work in helping organisations realise these efficiencies that the Crown Commercial Service recently recognised Allstar Business Solutions as a trusted supplier of advanced fuel cards to the public sector for a 15th consecutive year.
Under the new Framework Agreement for Fuel Cards and Associated Services (RM6000), Allstar will support public sector organisations in making an informed choice on the most cost-effective fuel and vehicle service solutions for their fleet operations.
Chief Commercial Officer