Do You Know Where the Fuel From Your Yard's Fuel Tank is Going?

Many companies have determined that locating a bulk fuel tank in their own yard provides the most cost-effective method for their fleet fueling requirements.

Bulk tanks certainly come with insurance and environmental challenges, but they can be overcome with careful planning. It’s also costly to purchase and install a bulk tank, but significant net savings may be achieved compared to alternative fleet fueling options -- assuming your tank doesn’t “leak.”

When I say “leak,” I don’t mean fuel seeping into the ground. I’m referring to a tank that lacks a fully integrated inventory tracking process, including a card reader. Without it, fuel will be dispensed from the tank and it will be difficult, if not impossible, to know where it all went. Misuse and theft can easily go undetected without strong inventory controls. The loss of fuel will quickly wipe out any cost advantage of having the tank in the first place.

One of the worst inventory control scenarios would allow anyone in the yard to drive up to the tank and dispense fuel without tracking the driver AND vehicle. A small improvement, although primitive by today’s standards, would involve placing a clipboard and pen near the tank (in a weatherproof location) for someone to note their fueling activity. That might work if everyone followed the rules and the clipboard didn’t get misplaced. Also, the back office staff will need to spend the time to rekey all the information accurately assuming they could read the writing on the clipboard.

A better scenario is a tank with a card reader system, but we often see companies with old equipment that cannot transmit information. Fueling transaction data is actually trapped inside the reader until someone physically downloads it. “Memory full” error? Let’s hope it doesn’t result in fuel being pumped without being recorded, or we’re back to the worst-case scenario.

The preferred solution is to equip the tank with a card reader system that provides fueling data in real-time, whether it be through a wired or wireless connection. In addition, the data should be in a format that is easily integrated into an inventory control system with robust reporting, possibly using a company’s G/L system for full cost accounting and P&L tracking.  Modern card readers offer those capabilities as basic features.

If you’re concerned about the cost of investing in a new bulk tank inventory control system, it’s worth noting that there are major fleet fuel card providers in the market that are willing to absorb most of the cost, including installation expenses, in exchange for earning transaction fees over an extended period of time. These arrangements can be very attractive for companies with limited cap-ex budgets.  voiding the up-front cash outlay can help quickly provide financial returns from improved inventory controls, even net of transaction fees.

This article was authored by The Sokolis Group, which offers fuel purchasing, management and consulting services. It originally appeared on the company's blog, and was chosen by HDT's editors as useful information for our readers, subject to our normal editorial standards and editing processs.