Negotiating Fuel Costs For Fleets

By Author: Corey Work
Total Articles: 19
Comment this article

Regardless of your industry, you know that fueling a fleet of vehicles can be expensive and that managing this spend can be a hassle. Fleets who have found ways to negotiate fuel costs and streamline their spending have seen significant savings. These companies show that understanding where their fuel spend is going and knowing how to approach a negotiation can save time and money, resulting in an immediate and significant impact to the bottom line. Follow these tips and you'll be on your way to considerable fuel savings for your company.

1. Prepare Your Negotiation

The most important thing to have before approaching any retailer for fuel price negotiations is a picture of your overall fuel spend and gallons purchased. If this is something that you do not currently track, it's not too late - there are several companies who provide this service for customers, and a few who can dedicate a Fuel Management Specialist to help you collect the facts you need to initialize a successful fuel negotiation.

Understanding the big picture of your company's fuel spend essentially helps you to understand your bargaining ...
... power and is important because it can help you see opportunities and patterns that might otherwise be overlooked. For example, a fleet company who purchases fuel at many different locations may realize an opportunity to consolidate fuel spend to fewer locations, thus enabling that company to negotiate better volume discounts.

2. Know Who Will Negotiate

Most truck stops are open to fuel price negotiation - the more business you do with them, the more likely they will be to discuss fuel prices. On the other hand, convenience stores may not be as receptive, as they are more focused towards serving the end consumer than business, and may not care as much about volume of business.

However, although not altogether common, there are instances of convenience stores negotiating fuel discounts with key fleet companies based on volume. The key takeaway is that negotiating fuel discounts is widely prevalent among truck stops and, although not widespread, certainly has a presence at many convenience store locations.

3. Set Metrics For Success

The only way to know if you have been successful in negotiating fuel discounts for your company is to set your metrics in advance. Before doing that, though, it is important to take into account that all fleets are different and may receive varying discounts from retailers based on volume and national recognition. A large, national fleet may receive different discounts compared to a small, local fleet; stations close to racks may price differently from stations farther away; and a fleet of owner-operators could see different prices from a fleet of company-owned vehicles.

Understanding your current fuel spend is the first step on your way to setting appropriate metrics. If you pay less for fuel after negotiating than you currently do, then you are moving in the right direction. You should also measure the success of your fuel negotiations by benchmarking against what similar fleets pay for fuel. Some may find it sufficient to benchmark against national or PADD (Petroleum Administration for Defense Districts) averages, but these averages are based on retail pricing and will not help you understand how your discounts stack up against other companies.
Comdata's fleet fuel management program offers aggressive pricing and purchasing analysis that will help you save money when using fleet gas cards.