DAT Carrier Segment Lead
Fuel Cards: An Easy Way to Protect Profits
Often variable and difficult to predict, fuel costs are a significant expense that eat into a carrier’s profits. In an industry that requires diligent cost-savings and margin protections, how can carriers protect their profits when faced with rising fuel prices?
High fuel prices put pressure on rates, leading to increased operating expenses. In the case of contract freight, fuel surcharges paid by shippers fluctuate based on fuel prices, with different types of trailers, such as flatbeds, often commanding higher surcharges due to their lower fuel efficiency. Similarly, on the spot market, rates are negotiated to encompass fuel costs, meaning carriers must navigate these fluctuations to maintain profitability.
Here’s where a fuel card helps
Fuel cards are a crucial tool for carriers who need to mitigate the force of high fuel prices on their bottom line. These cards offer a range of benefits, including fuel discounts, purchase controls, and spending limits, which help carriers manage their fuel expenses effectively.
Fuel cards often come with fleet management and reporting tools that provide valuable insights into fuel usage and spending patterns. Of course, the best cards put this spend data in on a centralized dashboard that makes your job easier. Beyond fuel, these cards often give discounts on tires, hotels, parking, and permits, because every penny helps on the bottom line.
When you’re shopping for a fuel card, evaluate each card in terms of:
- The discounts they offer
- Where they’re accepted
- How strong their customer support is and
- The associated transaction fees
Profit protection
Historically, high fuel prices have been linked to an increase in carrier bankruptcies – proactive expense management is paramount. While focusing on revenue is essential, neglecting fuel cost management can quickly take a bite out of profits and jeopardize carriers' financial health. Fuel cards provide a strategic advantage via discounts and controls that enable carriers to navigate volatile fuel markets with ease, safeguarding profitability and sustainability.
Centralized fuel spending reports help you handle operating margin from a birds-eye view, and it creates a powerful pairing with the Profit Estimator from DAT One. In conjunction, you’ll quickly assess the profitability of each load. After inputting key metrics, you’ll see how different loads stack up against each other, enabling you to prioritize those that align best with your business goals.
Fuel cards are a practical solution to an impractical problem. By providing discounts, controls, and management tools that empower carriers to manage their fuel expenses more efficiently, fuel cards are indispensable. By leveraging these resources, carriers can navigate high fuel costs with confidence, ultimately securing their financial viability in an unpredictable market.
How can a fuel card help you? Click below for more information.
Resources:
https://www.dat.com/solutions/fuel-cards-for-fleets
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