Service to the Fleet
There was a time not long ago when a cardlock unit was nothing more than the final futile step for an unsuccessful convenience store, leading up to its inevitable date with a wrecking ball.
Stores that weren't profitable as retail gasoline and convenience stores were a natural fit for commercial cardlocks because cutting labor costs and skimping a bit on image turned bottom-line red into black, while at the same time allowing marketers to expand their customer base. But that line of thinking has changed over the past 10 years. Competition for cardlock business has increased dramatically as networks such as Wright Express, Fuelman, Commercial Fueling Network (CFN) and Pacific Pride began to focus exclusively on the fleet business. In recent years even Visa and MasterCard have heavily targeted the commercial fleet.
"Our customers have choices today that they probably didn't envision 10 years ago," said Arnie Donovan, vice president of Burlington, Wash.-based Martin Commercial Fueling Co. "That competition is driving fleet sales and creating new opportunities for store owners and credit-card networks. The competition for fleet business now is just as competitive as it is for retail business."
A Fleeting Task
Donovan should know. His company has undergone a renaissance over the past 15 years. The company used to operate 10 convenience stores and gas stations. But as the price of fuel climbed throughout the 1970s and 1980s and fuel margins stumbled to new lows, the company, headed by chief executive John Martin, decided to reinvent itself.
The first step, Donovan recalled, was taking a hard look at the retail market and predicting which direction it was headed in. "Even 15 years ago, we knew the future of fuel marketing was going to depend heavily on volume," he said. "With 10 stores, we were limited to a finite fuel volume."
According to Donovan, there were few options: Get out of the business altogether; go on an acquisition spree to increase economies of scale and fuel volume; or focus exclusively on commercial fleet accounts. The company decided to service the fleet.
As part of its transformation over to fleet fueling, Donovan first had to identify a fleet network that was focused on moving volume and driving new sales. Then he had to find locations where competition wasn't too tight so he could garner a good share of the market.
"We already knew the retail business was going to the dogs. Competition was tight and margins were slipping," Donovan said. "The last thing we wanted to happen was to transform our business to commercial fueling, then find ourselves in the same position all over again."
Martin Commercial Fueling, which still maintains a vast jobber distribution business to independent retail operators in Washington State, settled on the Pacific Pride fleet fuel network because of "its dynamic reach and commitment to helping us grow our business," Donovan said.
With its five Pacific Pride-branded cardlock stations in Washington, Martin Commercial Fueling is moving three and in some cases four times as much fuel as it was with the retail sites. Plus, the pumps require minimal labor -- all are self-service -- and the fuel islands are open 24 hours a day seven days a week.
Donovan said the strength of the Pacific Pride brand along its network of nearly 1,500 participating commercial sites nationwide has helped increase the bottom line significantly. He estimates the changeover to Pacific Pride increased his fuel volume by several thousand gallons per day over his former retail units.
Despite the impressive results, Donovan warned there was no magic bullet and the company worked long and hard at building up the business. The key to operating within the Pacific Pride network is getting the fleet card into the hands of commercial drivers. As the Martin Commercial Fueling sales force initiates new accounts, those drivers use the card as they haul freight across the country. The Pacific Pride network records each sale during the trip and sends that data back to Martin, which then bills the trucking company. Martin then pays the owner of the site that its card user visited for fuel, plus a nominal fee for laid-in costs.
Cindy Condon, vice president of Pacific Pride Services, said an emerging trend for retailers has been to add on commercial cardlock sites to existing retail units. "In many of the bigger travel center or convenience store locations there is a lot of room off to the side to expand the business," she said. "Adding fuel islands to this empty space is often a cost-effective venture that requires a fraction of the initial investment that was needed to build the site in the first place."
One company doing just this is Stockton, Calif.-based Vanderpool Enterprises Inc. The company operates five Exxon Tiger Express convenience stores in Northern California. Each includes a Pacific Pride fleet fueling center, said Ted Guzman, general manager of Vanderpool's retail division.
Though branding with Pacific Pride forces commercial operators to accept Pacific Pride cards only, other networks, such as Wright Express, Fuelman and CFN, have cultivated a loyal consumer base, along with Visa and MasterCard.
The Wright Express Fleet Card (WEX), based in South Portland, Maine, is accepted at more than 150,000 stores, including chains such as Texaco, Shell, Circle K, Chevron and QuikTrip. The company has issued more than 3 million cards since 1984.
The card is a unique information management tool in that it helps fleet managers control costs more effectively, said Rick Wirth, manager of marketing and external communications for Houston-based Equiva Services LLC, operator of more than 5,000 Shell and Texaco units in the United States.
"Everyone needs good management tools to better run their business. The Wright Express card is one of the best management tools for businesses with fleet vehicles," Wirth said. "They provide you with the details of your drivers' purchases and allow you to set vehicle-use policies and monitor their effectiveness."
Wright Express's daily, weekly or monthly reports give fleet managers instant access to drivers' purchases, allowing the company to cap spending and identify unauthorized spending.
Monthly statements show:
Vehicle analysis report. Detailed transaction data and vehicle performance information.
Exception report. Shows transactions that fall outside the policy limits you have chosen.
Summary reports. Financial, exception, site and activation overviews of activity for the reporting period.
Petro Stopping Centers LP, which operates 55 travel centers, was looking to create a fleet fueling program that not only catered to truckers and local business, but also rewarded them for their business.
In January, Petro Stopping Centers launched its MasterCard Fleet Program. The proprietary Petro Fleet Card goes beyond traditional fleet cards, said David McClure, director of marketing for the El Paso, Texas-based chain. It's designed to control and restrict driver and employee purchases. Individual cards can be programmed for specific purchases. For example, some cards only allow for the purchase of fuel and automotive services. Other companies give employees a full range of buying options that could include foodservice and other convenience store items or laundry and showering services at truckstops.
The Petro Fleet Card then provides managers with an itemized sales list. How the card also differs from some of its competitors, McClure said, is that it offers a series of rebates and discounts.
The special features of the Petro Fleet Card include a 1-cent-per-gallon rebate on diesel and gas, no annual cardholder or transaction fees, monthly billing terms with a 25-day grace period, and online card management and reporting.
"The best way for us to differentiate our offering is to create an incentive-based marketing program, which includes rebates and no transaction fees, around our program," McClure said. "This gives customers control over spending, easy access to fleet reports and still allows them to earn free fuel through our rewards program. It gives us the competitive edge we feel we need to stand out among the competition.
But other fleet-card companies aren't rolling over at the first sight of competition. For example, FleetCor's Fuelman network specializes in obtaining proprietary data and managing and controlling costs for fleet businesses.
The Fuelman network comprises more than 130 licensees as well as 25,000 authorized fuel and maintenance retailers across 48 states. They market Fuelman products and services to 70,000 customers and have approximately 800,000 cards in service.
Fuelman has aggressively expanded its operations over the past two years, building more than a dozen new locations on acre-plus lots pulling in more than 160,000 gallons per month, said Jeff Fisher, vice president of the New Orleans-based company.
Like Petro Stopping Center's MasterCard program, Fuelman's fleet service provides operators with cost-control and management tools that are necessary for operating the fleet business as efficiently as possible.
"The Fuelman proprietary operating system is comprised of two components. First, it utilizes a processing system that captures vehicle and transaction information," Fisher said. "Combined with its software system, operators can customize fleet management programs to control costs and schedule routine maintenance."
Another major player in the cardlock business is CFN. First launched in 1988, CFN bills itself as a network by jobbers for jobbers. The network expands every time a new member is added. Each marketer that joins obtains immediate access to CFN's other sites, and likewise, customers from other sites have access to theirs.
CFN's total fuel management system enables fleet operators to control their fleet and tailor their fueling requirements to their specifications. The online system allows retailers to lock out invalid cards, track all transactions, impose velocity controls and review records from remote locations.
These value-added benefits were important to Ron Hill, vice president of marketing for Countrymark Co-op, a farm cooperative that operates more than 100 Energy Plus convenience stores in three Midwestern states.
"Countrymark searched extensively for several years for a fueling system to network the many diverse requirements of our members," Hill said. "CFN provides the flexibility and innovative technology to connect our cooperative membership. The ability of our members to retain their own customers and remain in charge of their own marketing decisions was paramount in Countrymark's decision to choose CFN."
Stores that weren't profitable as retail gasoline and convenience stores were a natural fit for commercial cardlocks because cutting labor costs and skimping a bit on image turned bottom-line red into black, while at the same time allowing marketers to expand their customer base. But that line of thinking has changed over the past 10 years. Competition for cardlock business has increased dramatically as networks such as Wright Express, Fuelman, Commercial Fueling Network (CFN) and Pacific Pride began to focus exclusively on the fleet business. In recent years even Visa and MasterCard have heavily targeted the commercial fleet.
"Our customers have choices today that they probably didn't envision 10 years ago," said Arnie Donovan, vice president of Burlington, Wash.-based Martin Commercial Fueling Co. "That competition is driving fleet sales and creating new opportunities for store owners and credit-card networks. The competition for fleet business now is just as competitive as it is for retail business."
A Fleeting Task
Donovan should know. His company has undergone a renaissance over the past 15 years. The company used to operate 10 convenience stores and gas stations. But as the price of fuel climbed throughout the 1970s and 1980s and fuel margins stumbled to new lows, the company, headed by chief executive John Martin, decided to reinvent itself.
The first step, Donovan recalled, was taking a hard look at the retail market and predicting which direction it was headed in. "Even 15 years ago, we knew the future of fuel marketing was going to depend heavily on volume," he said. "With 10 stores, we were limited to a finite fuel volume."
According to Donovan, there were few options: Get out of the business altogether; go on an acquisition spree to increase economies of scale and fuel volume; or focus exclusively on commercial fleet accounts. The company decided to service the fleet.
As part of its transformation over to fleet fueling, Donovan first had to identify a fleet network that was focused on moving volume and driving new sales. Then he had to find locations where competition wasn't too tight so he could garner a good share of the market.
"We already knew the retail business was going to the dogs. Competition was tight and margins were slipping," Donovan said. "The last thing we wanted to happen was to transform our business to commercial fueling, then find ourselves in the same position all over again."
Martin Commercial Fueling, which still maintains a vast jobber distribution business to independent retail operators in Washington State, settled on the Pacific Pride fleet fuel network because of "its dynamic reach and commitment to helping us grow our business," Donovan said.
With its five Pacific Pride-branded cardlock stations in Washington, Martin Commercial Fueling is moving three and in some cases four times as much fuel as it was with the retail sites. Plus, the pumps require minimal labor -- all are self-service -- and the fuel islands are open 24 hours a day seven days a week.
Donovan said the strength of the Pacific Pride brand along its network of nearly 1,500 participating commercial sites nationwide has helped increase the bottom line significantly. He estimates the changeover to Pacific Pride increased his fuel volume by several thousand gallons per day over his former retail units.
Despite the impressive results, Donovan warned there was no magic bullet and the company worked long and hard at building up the business. The key to operating within the Pacific Pride network is getting the fleet card into the hands of commercial drivers. As the Martin Commercial Fueling sales force initiates new accounts, those drivers use the card as they haul freight across the country. The Pacific Pride network records each sale during the trip and sends that data back to Martin, which then bills the trucking company. Martin then pays the owner of the site that its card user visited for fuel, plus a nominal fee for laid-in costs.
Cindy Condon, vice president of Pacific Pride Services, said an emerging trend for retailers has been to add on commercial cardlock sites to existing retail units. "In many of the bigger travel center or convenience store locations there is a lot of room off to the side to expand the business," she said. "Adding fuel islands to this empty space is often a cost-effective venture that requires a fraction of the initial investment that was needed to build the site in the first place."
One company doing just this is Stockton, Calif.-based Vanderpool Enterprises Inc. The company operates five Exxon Tiger Express convenience stores in Northern California. Each includes a Pacific Pride fleet fueling center, said Ted Guzman, general manager of Vanderpool's retail division.
Though branding with Pacific Pride forces commercial operators to accept Pacific Pride cards only, other networks, such as Wright Express, Fuelman and CFN, have cultivated a loyal consumer base, along with Visa and MasterCard.
The Wright Express Fleet Card (WEX), based in South Portland, Maine, is accepted at more than 150,000 stores, including chains such as Texaco, Shell, Circle K, Chevron and QuikTrip. The company has issued more than 3 million cards since 1984.
The card is a unique information management tool in that it helps fleet managers control costs more effectively, said Rick Wirth, manager of marketing and external communications for Houston-based Equiva Services LLC, operator of more than 5,000 Shell and Texaco units in the United States.
"Everyone needs good management tools to better run their business. The Wright Express card is one of the best management tools for businesses with fleet vehicles," Wirth said. "They provide you with the details of your drivers' purchases and allow you to set vehicle-use policies and monitor their effectiveness."
Wright Express's daily, weekly or monthly reports give fleet managers instant access to drivers' purchases, allowing the company to cap spending and identify unauthorized spending.
Monthly statements show:
Vehicle analysis report. Detailed transaction data and vehicle performance information.
Exception report. Shows transactions that fall outside the policy limits you have chosen.
Summary reports. Financial, exception, site and activation overviews of activity for the reporting period.
Petro Stopping Centers LP, which operates 55 travel centers, was looking to create a fleet fueling program that not only catered to truckers and local business, but also rewarded them for their business.
In January, Petro Stopping Centers launched its MasterCard Fleet Program. The proprietary Petro Fleet Card goes beyond traditional fleet cards, said David McClure, director of marketing for the El Paso, Texas-based chain. It's designed to control and restrict driver and employee purchases. Individual cards can be programmed for specific purchases. For example, some cards only allow for the purchase of fuel and automotive services. Other companies give employees a full range of buying options that could include foodservice and other convenience store items or laundry and showering services at truckstops.
The Petro Fleet Card then provides managers with an itemized sales list. How the card also differs from some of its competitors, McClure said, is that it offers a series of rebates and discounts.
The special features of the Petro Fleet Card include a 1-cent-per-gallon rebate on diesel and gas, no annual cardholder or transaction fees, monthly billing terms with a 25-day grace period, and online card management and reporting.
"The best way for us to differentiate our offering is to create an incentive-based marketing program, which includes rebates and no transaction fees, around our program," McClure said. "This gives customers control over spending, easy access to fleet reports and still allows them to earn free fuel through our rewards program. It gives us the competitive edge we feel we need to stand out among the competition.
But other fleet-card companies aren't rolling over at the first sight of competition. For example, FleetCor's Fuelman network specializes in obtaining proprietary data and managing and controlling costs for fleet businesses.
The Fuelman network comprises more than 130 licensees as well as 25,000 authorized fuel and maintenance retailers across 48 states. They market Fuelman products and services to 70,000 customers and have approximately 800,000 cards in service.
Fuelman has aggressively expanded its operations over the past two years, building more than a dozen new locations on acre-plus lots pulling in more than 160,000 gallons per month, said Jeff Fisher, vice president of the New Orleans-based company.
Like Petro Stopping Center's MasterCard program, Fuelman's fleet service provides operators with cost-control and management tools that are necessary for operating the fleet business as efficiently as possible.
"The Fuelman proprietary operating system is comprised of two components. First, it utilizes a processing system that captures vehicle and transaction information," Fisher said. "Combined with its software system, operators can customize fleet management programs to control costs and schedule routine maintenance."
Another major player in the cardlock business is CFN. First launched in 1988, CFN bills itself as a network by jobbers for jobbers. The network expands every time a new member is added. Each marketer that joins obtains immediate access to CFN's other sites, and likewise, customers from other sites have access to theirs.
CFN's total fuel management system enables fleet operators to control their fleet and tailor their fueling requirements to their specifications. The online system allows retailers to lock out invalid cards, track all transactions, impose velocity controls and review records from remote locations.
These value-added benefits were important to Ron Hill, vice president of marketing for Countrymark Co-op, a farm cooperative that operates more than 100 Energy Plus convenience stores in three Midwestern states.
"Countrymark searched extensively for several years for a fueling system to network the many diverse requirements of our members," Hill said. "CFN provides the flexibility and innovative technology to connect our cooperative membership. The ability of our members to retain their own customers and remain in charge of their own marketing decisions was paramount in Countrymark's decision to choose CFN."