Senate Investigates Fleet Card Cos.
WASHINGTON, D.C. -- A Senate appropriations subcommittee moved to investigate alleged anti-competitive practices of the nation's fleet card companies, drawing praise from the National Association of Truck Stop Operators (NATSO).
"Many travel plaza and truckstop operators are on the verge of losing their livelihoods because of the outrageously anti-competitive practices of some of these large fuel card companies," said NATSO President W. Dewey Clower.
The association, which represents 1,200 travel plazas and truckstops nationwide, has sought Senate help to halt what it considers unfair practices by large third-party billing companies, most notably industry giant Comdata, owned by Ceridian Corp.
In a report accompanying an appropriations bill, the Senate Commerce, Justice, State and Judiciary Subcommittee urged the Federal Trade Commission (FTC) to study any unfair trade practices by fleet card companies and their effects on the travel plaza and truckstop industry. The committee expects a report on this study within 180 days of enactment of the act.
Comdata, which controls more than 70 percent of the fleet card market, and other fleet card companies extend credit to trucking fleets when they purchase fuel and merchandise at travel plazas. Those operators then pay transaction fees to fleet card companies.
The issue of high third-party credit fees has agitated many of NATSO members, who have seen fees rise precipitously, by as much as 500 to 800 percent in two years. The soaring rates come at a time fuel margins are razor thin.
"Because the transaction fees charged by Comdata are so large -- sometimes even exceeding the travel plaza's profit margin on fuel -- operators must raise their fuel prices to help offset the expense of the transaction fees," NATSO said in a statement.
Clower added: "In essence, Comdata is dictating our members' fuel prices, which increases the diesel fuel costs for all consumers."
In 2000, Comdata and the FTC entered into a consent order after the agency concluded that Comdata acted anti-competitively. NATSO has urged that the FTC review Comdata's latest actions as part of its review of the consent order.
"Many travel plaza and truckstop operators are on the verge of losing their livelihoods because of the outrageously anti-competitive practices of some of these large fuel card companies," said NATSO President W. Dewey Clower.
The association, which represents 1,200 travel plazas and truckstops nationwide, has sought Senate help to halt what it considers unfair practices by large third-party billing companies, most notably industry giant Comdata, owned by Ceridian Corp.
In a report accompanying an appropriations bill, the Senate Commerce, Justice, State and Judiciary Subcommittee urged the Federal Trade Commission (FTC) to study any unfair trade practices by fleet card companies and their effects on the travel plaza and truckstop industry. The committee expects a report on this study within 180 days of enactment of the act.
Comdata, which controls more than 70 percent of the fleet card market, and other fleet card companies extend credit to trucking fleets when they purchase fuel and merchandise at travel plazas. Those operators then pay transaction fees to fleet card companies.
The issue of high third-party credit fees has agitated many of NATSO members, who have seen fees rise precipitously, by as much as 500 to 800 percent in two years. The soaring rates come at a time fuel margins are razor thin.
"Because the transaction fees charged by Comdata are so large -- sometimes even exceeding the travel plaza's profit margin on fuel -- operators must raise their fuel prices to help offset the expense of the transaction fees," NATSO said in a statement.
Clower added: "In essence, Comdata is dictating our members' fuel prices, which increases the diesel fuel costs for all consumers."
In 2000, Comdata and the FTC entered into a consent order after the agency concluded that Comdata acted anti-competitively. NATSO has urged that the FTC review Comdata's latest actions as part of its review of the consent order.