Streamlined efficiencies. Cost-effective measures. New revenue streams. In this tough economy, fuel marketers and fleet owners and operators are pulling out all stops—eager to find ways to stay ahead of the game. Enter cardlock programs. Today’s cardlock options offer cost-effective revenue streams and operational efficiencies—making them enticing components within the industry.
As with most forms of technology, cardlock systems continually evolve as technological advancements present additional opportunities. As Julio Farach, business development for FleetCor/Commercial Fueling Network (CFN) explained, some of these advancements appeal to marketers who have invested in site upgrades to prevent fraud by using video surveillance—an option available for quite some time—which is being adopted only recently due to falling costs.
“Some marketers use sophisticated video recording devices that index to specific transactions, making fraud investigations easier,” Farach said. CFN serves, via its participants (or card marketers), nearly one million drivers and vehicles and well in excess of 100,000 fleets. CFN serves many types of vehicles, from cars to trucks to heavy construction equipment.
New technologies also include the access cards themselves. CFN currently offers the FleetWide card, which is two networks strong. According to Farach, the FleetWide card offers fleets nationwide convenience with acceptance at nearly 3,000 CFN sites plus over 30,000 additional “extended network” sites.
“CFN marketers are harnessing the opportunity to grow by replacing their entire CFN card deck with FleetWide cards, reconnecting with their customers by offering new capabilities,” he said. CFN offers many industry-leading technologies and features, including, for example, e-receipts and e-mail alerts, allowing fleets to focus on their business rather than fuel expense administration.
Advancements in third party card acceptance also are an appealing facet for many marketers. “More and more cardlock marketers are accepting a wide range of cards, which opens up a lot of potential business opportunities,” said Rich Klima, product manager at OPW, a global leader in offering fueling products and services worldwide. “The cost effective nature of cardlock systems are adding to their expanded use by marketers and fleets alike.”
According to Cindy Condon, president of Pacific Pride, part of the Wright Express organization, Pacific Pride, once solely a proprietary system, is now open to other commercial fleet card programs. “Pacific Pride’s innovative approach to third party card acceptance has enhanced the ability for cardlock operators to earn margin on those sales,” Condon said. In addition, cardlock equipment has the capability to provide much more control of each transaction, which helps the fleet control access and costs and helps the marketer manage their credit exposure.
Industry experts agree that when evaluating the technological advancements of cardlock programs, you need to keep in mind the core features of cardlock programs, namely:
• The commercial fleet fueling business provides a real marketing and sale opportunity.
• The customer base tends to be loyal, purchase higher volumes, and may be great propects for other lines of business, such as lubes, propane and bulk fuel.
• The addition of a commercial fueling business adds diversity to a business portfolio.
• If a network is involved, expanded site access is a major benefit.
• The ability to attract more volume without high interchange rates.
• Commercial equipment at cardlock sites provide for much greater transaction control than at retail locations.
• Unattended cardlock sites are generally less expensive to operate.
“Also, if the marketer chooses to join a commercial fueling system like Pacific Pride, the marketer can take advantage of training, marketing support, convenient settlement of funds and a high level of service and support in the operation of a commercial fueling business,” Condon said.
What’s more, for fleets, the highly controlled transactions at cardlock sites allow for better fuel management. Other positive aspects of cardlock programs on the part of fleets include:
• Sites are generally designed for good commercial traffic flow, easy in and out.
• Prices are competitive and often loyalty is rewarded.
• Sites are generally conveniently located in commercial areas.
• Pricing and credit terms can be negotiated locally.
Indeed, as Condon pointed out, the cardlock business is well suited to any petroleum marketer with a commitment to quality sites, good marketing and strict credit management. “A cardlock site can be successful if the site is convenient to commercial traffic and attractive to customers using third party cards or cards issued by other franchisees or network participants,” she said. “It is the commitment to the business that makes the difference.”
While the positive aspects of cardlock programs are paramount, industry experts say the return on investment (ROI) is difficult to estimate. “It is truly a case of ‘reap what you sow,’” Condon said. “If care is taken in the development and upkeep of a site, the marketer commits to a marketing and sales strategy targeted at the needs of a commercial customer and credit is wisely managed, the ROI is significant.”
For example, a commercial fueling business based on a cardlock site or network of cardlock sites can fit in well with any commercial business model. Heating oil distributors, who are geared up to handle credit and make sales to and service credit worthy accounts, have the fundamental tools in place for an effective commercial fueling program.
Or perhaps, retailers with underperforming retail sites may look at installing a commercial cardlock at those sites to keep the sites productive at less cost and to cater to a commercial customer base rather than retail. “Petroleum marketers with a good lubricants business and/or other commercial lines of distribution are particularly well suited to the commercial fueling business,” Condon said. “Commercial fueling adds a value added service to those commercial customers already served by the distributor.”
Gasboy adopts Orpak Technology
On the Gasboy front, Gilbarco Inc. of Greensboro, N.C., Orpak USA Inc. of Hackensack, N.J., and Orpak Systems Ltd. have signed an agreement that will expand the portfolio of Gasboy fleet management systems to include new products with Orpak technology. Orpak Systems Ltd. is a leading provider of cardfree secure fuel payment systems based on vehicle identification and end-to-end solutions for the automation of fuel stations.
"The idea of a turnkey solution from a single supplier and service provider used to be a convenience. In the current environment, where internal resources are leaner than ever, it is a necessity,” said Kevin DeVinney, Gasboy marketing manager. “There simply is no time for operators to deal with the finger-pointing that sometimes comes when operators piece together systems from different providers."
The new Gasboy fleet management systems includes: Fleet Head Office, a Web-based enterprise-wide software that consolidates data and generates superior management reports; CFN PLUS, the next generation of Gasboy’s site controller that is Web-based; and FuelPoint PLUS, a highly secure hands free, wireless vehicle identification, authorization and control system that uses radio frequency identification.
"Fleet operators need to be able to manage data from anywhere. Web-based products like the Gasboy Fleet Head Office allow managers to customize and configure reports and remotely view data from multiple sites simultaneously. They can proactively schedule vehicle maintenance based on accurate and timely information," said DeVinney.
"The new generation of truly wireless vehicle identification systems like FuelPoint PLUS automate the collection of accurate odometer readers directly from the vehicle bus. They eliminate human error associated with manual entry and also eliminate the needs for keys, cards or vouchers that can get lost or be misused," he said.
The new Gasboy products will be sold and supported in the United States exclusively through the existing network of Gasboy distributors and authorized service contractors and globally on a non-exclusive basis.
Striving For Success
So what are the requirements on the part of marketers when incorporating a cardlock program into their operations?
“To be successful at a commercial fleet card program, a marketer must be committed to provide the best sites possible for their customers,” Condon said. Cardlocks tend to be located in commercial areas, have more area for turn around and flow of larger vehicles through a site, and provide good ingress and egress to roadways. In addition, the best commercial fleet card programs are committed to marketing their products and services to credit worthy commercial customers and selling the value of stand-alone commercial fueling sites (cardlocks) to those customers.
“This means investing in quality sales personnel with good training on the features of the cards, the value of cardlock sites, and the value of a network,” she said. “And, a marketer must commit to good credit management. Quality sites, high-touch marketing and strict credit management are required to run a successful cardlock program.”
As Farach explained, the marketer also typically owns and operates a set of cardlock sites, rather than only one or two. To meet the unique needs of multi-site ownership, in real-time, CFN authorizes and processes transactions on behalf of the network’s marketers. The system also communicates with a variety of site controllers, POS terminals and other equipment combinations. Participants get to issue cards that are accepted in nearly 3,000 CFN network sites and over 30,000 “extended network” sites and the flexibility to customize fueling programs in order to meet the needs of fleets.
Of course, the security surrounding cardlock programs also is top of mind for marketers and fleet owners alike. For fleets interested in utilizing cardlock programs, the primary requirement is that most commercial fleet card programs and/or cardlock programs are designed for commercial, industrial and governmental users. “This means that in certain states, only documented and trained commercial customers are allowed to use unattended cardlock site,” Condon said. For example, fleets with access to unattended cardlock sites must be trained in the use of safety equipment and actions to take in case of an emergency.
“Marketers also look for systems that provide security as well as accountability for the fuel being dispensed,” Klima said. OPW offers island terminals and commercial fuel dispensers site controllers that help marketers and fleets record who purchased the fuel and the specific vehicle information involved in the transaction. This can be very important to fleet owners because it can help them determine the maintenance required and the mileage tracking. “The separate island terminals within cardlock facilities are often more cost effective for marketers,” Klima added. Also there is little or no maintenance, and terminals are often in quieter places with lower property values.
To make cardlock program work to its fullest potential, fleets need to be committed to controlling costs. “Our feature set, reporting and controls offered in CFN’s cardlock program make controlling costs easy for the fleet manager,” Farach explained. In a typical setup, drivers receive their own individual card and a driver ID (5-digit code) selected by the driver. The fleet manager can control many aspects such as time-of-day windows for fueling, gallon and per fill limits, and odometer validation, just to name a few of the very basic CFN cardlock program features.
So what does the future hold for cardlock programs? According to Klima, more and more cardlock dispensers are dispensing alternative fuels, including E85 and biodiesel, which may not be available at all stations. “Cardlock programs provide easy access to new products and this is very appealing for fleets and marketers themselves,” he said. “It’s an exciting time for cardlock programs, especially with the innovative graphic displays on the terminal units. And we feel that the cost-effective nature of cardlock programs will continue to lead to an expanding use of cardlocks.”
Are you ready for the fleet to come in?
A few tips from Wright Express on attracting and keeping commercial fleet customers
- Make sure your site is a viable option for the type of fleets you’re after— Are your sites commercial traffic ready? If you’re after a fleet of heavy trucks, there should be a lot of space for larger vehicles to maneuver. If unattended, the site needs to be secure and safe. All commercial sites should provide easy entry from, and exit to, the roadways. Locations close to commercial areas, or in areas where the fleet is likely to conduct business, are essential to a successful fleet strategy.
- Amenities are a plus— Believe it or not, truck drivers like a clean bathroom just as much as anyone else. Clean restrooms and well-lit service islands are just the start. Whatever the scope of the amenities is – the key is to deliver on what you promise.
- You have to pay to play— To be successful at a commercial fleet card program, a marketer must commit resources to the program. This means investing in quality sales people with good training on the features and benefits of the program and the value of both the card program and the acceptance network. Many successful marketers integrate their sales and marketing efforts. They give salespeople the tools they need to help explain the programs, including the means to target the ideal customer. They build a profile of the desired customer and hold the sales force to it.
- Have a credit management plan— Be willing to develop a robust credit management program. This means investing in the tools that provide visibility into the fleet’s fueling behaviors as well as payment history. Understand and manage your risk, especially in tough times. Some card programs offer outsourced receivables, a feature that allows the marketer to provide credit in their name, without the risk of bad debt.
- Be as big as you need to be— Become part of a network that has the flexibility to be as big or as small as a fleet wants. Some smaller marketers benefit greatly from a networked card program, which provides their fleets with additional access points beyond just their few sites. In general, the more access points a fleet has to fuel, the more likely they are to use your card program exclusively.
- Offer flexible payment terms— Within reason you should have the option for a fleet to set the frequency and even cycle for making payments. You may have some of your fleets set up to take money from their checking account once a week if credit is an issue. Other fleets may be set up to pay once a month.
- Put an owner in the passenger’s seat of every fleet vehicle— Provide a card program with robust controls for the fleet. They need to know that their drivers will not be able to make unauthorized purchases, regardless of where they are purchasing fuel and other items authorized on the card.
- Offer a competitive program— Fleets are becoming much more sophisticated and are looking for partners to help turn every aspect of their operations into a competitive advantage. You can start by providing state of the art tools for the fleet, including online account management. You can also offer a discount off of the retail price for using your sites, or be open to negotiated pricing such as cost-plus or contract pricing. This is especially important to higher volume fleets.
- Get creative— It’s up to you to set your program apart from others in your market. A good place to start is listening to your fleets. You may find out that a coffee discount card is important to some, while others are more interested in a price break or points toward service or a wash.