How do fuel cards work for freight traffic - Truck Dispatcher Training

How do fuel cards work for freight traffic

Studies show an interesting picture in the field of cargo transportation. It turns out that in the UNITED STATES, a transport company spends 95.2 cents out of one earned dollar to operate a truck. Net profit is 4.8 cents. 

Therefore, fleets have to save on everything. One of the important components of the costs of cargo carriers is diesel fuel. 

Trucking companies are trying to use fuel cards as efficiently as possible in order to save money.  So how do fuel card programs work? In this article we will answer the main questions regarding this topic.

Who uses the cardsHow do fuel cards work for freight traffic

Basically, fuel cards are purchased by trucking companies. This most often happens in the parking lots of class 7 and 8 trucks. The size of the carrier does not matter. Customers of fuel companies that buy cards are: 

What is the benefit of the fuel card 

The distribution of fuel cards is not a charity event. Both the seller and the buyer benefit from this. Fuel companies for small discounts attract more customers, and carriers receive discounts of 2-3% per gallon of diesel.  

To attract even more customers, gas stations sometimes offer exclusive discounts that exceed the usual percentages. Fuel card programs bring fleets thousands of dollars saved.

How to calculate savings

The discount policy is stipulated by two parties: fuel and transport companies. There are usually two models: 

  1. Retail-minus involves deducting a certain amount of money from their retail price. These savings go to the fuel card holder. 
  2. Cost-plus is a little more difficult to calculate. The Petroleum Price Information Service (OPIS) sets the base cost per gallon of fuel for each locality. Taxes and transportation costs are added to this price. The discount is added to the rest of the fees. Cost-plus is cheaper in those regions where the delivery of fuel is more expensive. 

Sometimes fuel companies give fleets a “better” option. In these cases, customers don’t have to guess which of the two cards to choose.

How fuel cards are usedHow do fuel cards work for freight traffic

A number of companies charge a commission for each purchase of diesel fuel using the card. Depending on the place of refuelling or the type of card, your money will come to you immediately or at the end of the month. 

Some companies prefer to make discounts at the point of calculation. The carrier pays a low price to the fuel company, which pays a reduced rate to the seller. 

There are also fuel sellers who send the saved funds to the fleet at the end of each month. Such a system sometimes causes misunderstanding among drivers for the reason that when refuelling they draw the full cost.

What else does the fuel card give to carriers

Fuel cards are also useful in other ways, namely: 

Saving money on fuel is the main task of the card. But it can also be used for discounts on maintenance of equipment, repair work, tire replacement, preparation of documents, accommodation, etc.

 

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