The news for courier operators is that the current cost of fuel is here to stay – at least for the foreseeable future. So says the Bank of England who reported that the futures curve suggests that the price of oil will remain around its current level for the next few years. With diesel now topping 95p a litre in parts of the UK, the search for measures to contain this rising cost was never more crucial.
What can be done?
The timeless methods of transport cost control by good management both by operators and drivers always pay dividends. Regular vehicle servicing and steady driving will always mean more miles per litre. Nevertheless, operators have to look for alternative methods of purchasing fuel in order to contain increasing fuel costs. Courier Direct suggest two immediate options for the cheaper purchase of fuel are bunkering and fuelcards.
Yard tanks and bulk storage
One option open to hauliers and larger fleet users is bulk buying of fuel at commercial rates. This offers an initial advantage in the base cost of the fuel. It should be remembered though that the drivers can refuel only at the fuel depot; that the Control of Pollution (Oil Storage) (England) Regulations 2001 are stringent and that fuel management programmes and pumps can be expensive to run with storage tanks requiring regular maintenance and check programmes to ensure compliance.
Fuel cards – a simpler way forward?
For courier operators of all sizes, a fuelcard allows their drivers the flexibility to refuel when and where they choose. No cash changes hands and no administrative payand- reclaim costs are incurred by the operator. Additionally, since the EC 6th Directive issued in March 2005, companies operating a pay-and-reclaim system will no longer be able to reclaim VAT on those claims without a VAT registered receipt. This in itself is an incentive to consider fuelcards as a viable alternative in fuel purchase.
Cheaper pump prices
But are there additional benefits? Of the two types of cards, Commercial and Retail, Commercial Card providers like abbey Fuelcards buy in bulk, which enables them to provide their customers with a fixed weekly rate, quoted in advance, that is often cheaper than the pump price.
Retail card providers charge the full forecourt price with no reduction. This can leave operators vulnerable to potentially sizeable variations in fuel prices between filling stations. Unlike abbey Fuelcards, who make you aware of the cost of your fuel in advance, Retail Card customers do not find out until they receive their invoice.
What to look for
The vast majority of cards provide administrative benefits only. However, charges will vary considerably from one card provider to another, with some large retail card providers reportedly charging up to £1 per card per month; £3 per card for internet reporting and a further charge for replacing lost or stolen cards.
One operator – abbey Fuelcards – charges up to 50p per card per month; free management reports and free replacement of lost or stolen cards. They can also tailor the card usage and reports to suit the individual operator. For example, card usage may be restricted to a maximum fuel uplift, to certain hours or to certain days.
Fuelcard Security
With card fraud running at an estimated £40 million per annum in the UK, safeguarding any potential card from misuse is vital. abbey's CHIP and PIN card system protects against theft and misuse which, combined with its automated phone service, gives the authorised person access to cancel their card 24/7 / 365 days a year. They are also alone in offering a zero liability insurance cover that protects the operator from the moment the card is verbally reported lost or stolen.
Steve Clarke, Customer Services and Marketing Manager for abbey Fuelcards Ltd, comments: 'We offer the best way forward for commercial firms to contain their fuel costs in this time of high pump prices. With abbey Fuelcards’ flexibility; free management reports and individual company tailoring, advanced card security and zero liability insurance cover, choice of petrol or diesel and variety of networks, we go out of our way to provide the best all round method currently available for containing ever increasing fuel costs.'