Commercial Mobile and Bulk Fueling and Out-Sourced Fuel Management Services

Traditionally, businesses and other entities that operate fleets of vehicles and equipment have met their fueling requirements by either maintaining their own supply of fuel in on-site storage tanks or fueling vehicles at retail stations and other third party facilities.

On-site storage tanks and fueling facilities are expensive to construct and maintain, and expose the property owner and operator to potential liability associated with fuel leaks or spills. In addition, increasingly stringent federal and state environmental regulation of underground storage tanks may require businesses that maintain their own fuel supplies to spend significant amounts to remove, retrofit and/or to maintain underground and aboveground storage tanks to meet regulatory standards. Many fleet operators currently utilizing on-site storage tanks may choose to meet their fueling requirements by other means, including commercial mobile fueling, instead of investing in upgrading and/or maintaining existing facilities.

Fueling vehicles at retail stations and other facilities operated by third parties can result in a higher cost of operations due to inefficient use of employee time, the creation of significant unnecessary paperwork and employee fraud. While large fuel users may be able to negotiate favorable pricing from retail stations or other fuel suppliers, the labor cost incurred in connection with employee fueling of vehicles, and the costs associated with management and administration of fuel purchases, can exceed the benefits associated with price discounts.

Specifically, commercial mobile and bulk fueling and out-sourced fuel management services offer numerous benefits over traditional fueling methods:

• Reduces Operating Costs and Increases Labor Productivity. Fleet operators are able to reduce operating costs and lower payroll hours by eliminating the need for their employees to fuel vehicles either on-site or at local retail stations and other third party operated facilities. Overnight fueling prepares fleet vehicles for operation at the beginning of each workday and increases labor productivity by allowing employees to use their vehicles during time that would otherwise be spent fueling; while maximizing vehicle use since fueling is conducted during non-operating hours. The fuel necessary to operate vehicles is reduced since fueling takes place at customer locations. The administrative burden required to manage fuel programs and monitor vehicle utilization is also significantly reduced.

 

• Provides Centralized Inventory Control and Management. Our fuel management system provides fleet operators with a single management data source. Web-based comprehensive reports detail, among other things, the location, description, fuel type and daily and weekly fuel consumption of each vehicle or piece of equipment that we fuel. This eliminates customers’ need to invest working capital to carry fuel supplies and allows customers to centralize fuel inventory controls as well as track and analyze vehicle movements and fuel consumption for management and fuel tax reporting purposes.

 

• Provides Tax Reporting Benefits. Our fuel management system can also track fuel consumption to specific vehicles and fuel tanks providing tax benefits to customers consuming fuel in uses that are tax-exempt, such as off-road vehicles, government-owned vehicles and fuel used to operate refrigerator units on vehicles. For these uses, customers receive reports which provide them with the information required to substantiate tax exemptions.

 

• Eliminates Expenses and Liabilities of On-site Storage. Fleet operators who previously satisfied their fuel requirements using on-site storage tanks can eliminate the capital and costs relating to installing, equipping and maintaining fuel storage and dispensing facilities, including the cost and price volatility associated with fuel inventories; complying with complex and restrictive environmental government regulations; and carrying increasingly expensive insurance. By removing on-site storage tanks and relying on commercial mobile and bulk fueling, customers are able to avoid potential liabilities related to both employees and equipment in connection with fuel storage and handling. Customers’ expensive and inefficient use of business space and the diminution of property values associated with environmental concerns is also eliminated.

 

• Prevents Fuel Theft. Fleet operators relying on employees to fuel vehicles, whether at on-site facilities or at retail stations, often experience shrinkage of fuel inventories or excess fuel purchases due to employee fraud. Our fuel management system prevents this risk by dispensing fuel only to authorized vehicles. Utilizing our fueling services, rather than allowing employees to purchase fuel at local retail stations, also eliminates employee fraud due to credit card abuse.

 

• Provides Emergency Fuel Supplies and Security. Emergency preparedness, including assured fuel availability, is critical to the operation of governmental agencies, utilities, delivery services and numerous other fleet operators. We provide access to emergency fuel supplies at times and locations required by our customers, allowing them to react more quickly and effectively to emergency situations, such as severe weather conditions and related disasters. SMF responded to Hurricanes Katrina, Rita and Wilma by mobilizing personnel and a significant fleet of trucks and equipment to provide uninterrupted emergency fuel supplies and support services following the devastation caused by those storm systems. Fueling by fleet operators at their own on-site storage facilities, and/or at retail and other locations operated by third parties may be limited due to power disruptions, supply outages or access and other uncontrollable events. In addition, since security concerns regarding terrorism, hijacking and sabotage are escalating, fueling vehicles at a customers’ facilities eliminates risks to the fleet operators’ employees and equipment.

We also provide bulk fueling and specialized lubricant services to customers requiring the use of one or more of our portable storage tanks. These tanks are delivered to the customer’s job-site, repositioned as required, maintained and re-supplied on a scheduled or as needed basis. In addition, SMF provides bulk fueling services to its customers who maintain their own above or below ground storage facilities utilizing its fleet of tank wagons and transports. We also work with a number of nationwide fuel and card lock networks to provide an all-inclusive transportation fueling and fleet optimization solution for our customers.