Managed Fuel Services Help Private Fleets Cut Costs, Reduce Risk

Oil prices are known for their volatility.

Global uncertainty, decisions by OPEC and natural disasters can send prices higher, resulting in spikes at the fuel pump. Even when oil prices are stable, fuel costs vary from week to week and location to location. Fuel can also vary in quality. Purchasing off-spec fuel can result in costly maintenance issues and downtime. What's more, fuel theft can cost carriers thousands of dollars annually.

Penske Truck Leasing's managed fuel services take a multipronged approach that helps fleets ensure the quality and price of the fuel they purchase, optimizes every aspect of their fuel expenses, and reduces the risk of theft. In addition to Penske-owned secure fueling locations, Penske Truck Leasing offers an over-the-road fuel card, bulk and mobile solutions, an alternative fuel card, route optimization and consolidated billing.

Secure Fueling Locations

Penske Truck Leasing offers fuel at 370 Penske locations and provides competitive pricing based on customers' use. Each location features full-service islands and guaranteed year-round consistent fuel quality, and the vast majority offer on-island diesel exhaust fluid (DEF).

Relying on the wrong fuel supplier can be costly. "The cost of repair can be a minimum of $500 if you have to get it towed, spin the filters off and drain the tanks," said Ed Touma, director of energy and fuel supply for Penske Truck Leasing. "It can be the next day before you get on the road, and the driver could run out of hours."

Fuel must meet all industry standards, including pipeline shippers' product specifications for quality control, American Standards of Testing Materials specifications, and state and local special blending or clean air requirements.

Penske regularly monitors diesel fuel and DEF quality at all its locations. Diesel fuel testing occurs monthly. "We test our tanks annually for bacteria, and we put a microbacteria fighter in our underground storage tanks four times a year," Touma said.

We have mitigated many of the risks associated with fueling your fleet by establishing:

DEF on 350 fuel islands nationwide — batch tested and highly controlled for quality
Refiner-level supply relationships — established relationships in each market ensures supply security
Priority customer status — Penske can obtain product in the event of a tight market caused by weather events or other disruptors
Theft prevention strategies — only Penske Truck Leasing customers have access to Penske fueling stations, and our full service stations manage all fueling by truck number

Over-the-Road Fuel Card

For on-the-road customers, Penske Truck Leasing offers a proprietary fuel card that's good at more than 100,000 fuel merchant locations nationwide. With the card, fuel pricing ranges from the cash price listed at the pump to a tiered discount based on the size of the fleet. Rebates average about $0.02 per gallon from over 40,000 U.S. merchants.

The card also allows fleets to set up security parameters, such as authorization controls, restrictions on specific fueling times and locations, and spending limits to minimize the risk of fraud.

Route Optimization

To help customers make the most of their fuel spend, Penske Truck Leasing's team will analyze a customer's volume, compare it to posted retail prices and Penske prices on and near the route, estimate the time spent offroute if a driver deviates to find savings, and calculate the total net savings. "We'll take their data from the previous month to say, ‘You could have saved $3,000 if your driver had done this route,'" Touma said.

Bulk and Mobile Fuel Deliveries

Penske Truck Leasing also offers bulk deliveries. For customers with bulk tanks, Penske monitors tank levels, negotiates a competitive fuel price and dispatches deliveries as needed.

Private fleets that prefer to fuel their trucks when they are parked on-site can use Penske Truck Leasing's network of mobile fueling providers.

Penske partners with 4Refuel, a Canada-based provider to serve customers in the Texas market.

In markets where Penske Truck Leasing doesn't have a direct mobile fueling relationship, it has established indirect relationships with mobile fuelers and assists customers in coordinating mobile solutions.

Equipment Specification

Improving fuel economy starts with obtaining the right equipment for the application. By understanding the day-to-day application of the truck, matching the drive train, tires, engine and aerodynamics of the vehicle, and spec'ing the right size truck, fleet managers can improve miles per gallon. Penske has experts who can help managers optimize their fleet and ensure it is comprised of the right trucks.

Price Hedging

To mitigate fuel price risk, Penske Truck Leasing works with customers to hedge fuel prices, thus reducing customers' exposure to volatility and rising fuel costs. "There are ways to buy a financial instrument to protect against the price going up," Touma said, adding that there is a cost associated with hedging. "You have to put money in to get that protection."

Consolidated Billing

With the Penske Truck Leasing fuel network, all billing information is consolidated into one statement and broken down by truck, location and transaction. "If they're buying over the road or at a Penske location, all of that comes on a weekly bill the customer can see," Touma said, adding that alternative fuel comes on a separate bill.

February 2018