Pumping away profits

When your drivers fill their tanks, are they also lining their pockets? Here’s how you can stop fuel theft. By Aaron Huff

Occasionally on Channel 19, Mark Taylor hears the following: “Any owner-operators want a fuel bargain?” The voice, Taylor says, does not belong to an employee at a nearby truck stop but rather a driver selling fuel that he’s purchased with his company fuel card.

“It does happen and will continue to happen as long as drivers have free fuel cards in their pockets,” says Taylor, the owner and operator of Uglypuppy Exploration in Warren, Ark.
Fuel theft is probably a tiny blip on your radar screen, if it registers at all. But with fuel prices holding at far above historic norms, theft might just be a bigger problem than you think. Using fuel-cards for pre-authorization at fuel pumps, setting daily fuel limits and reviewing transaction reports can prevent or at least quickly detect misuse by a non-employee. These tools don’t always prevent drivers and others from profiting from fuel sales at your expense, however. In fact, you may not be able to detect internal theft until many days after the fact – if at all.

Technology may not completely prevent fuel theft, but it will at least help you bring the guilty to justice. Your ability to collect and use data to account for fuel – and drivers’ awareness of that capability – can help deter future theft.

Thwarting outsiders
Fighting requires takes effort aimed at two distinct groups – company employees and outside parties. To prevent outsiders from using stolen fuel cards to pump fuel, fuel management systems from vendors such as Fleet One, Comdata and T-Chek automatically prompt drivers to enter a personal PIN number before authorizing a fueling. You can also require drivers to enter odometer readings and match data such as vehicle and trailer identification and trip numbers to pre-defined settings.

Carriers that use the Fleet One card, for example, can choose three levels of data fields in its online fuel management system that individual drivers must match-up to authorize a transaction, says Cynthia Cunningham, product manager for Fleet One.

Company drivers at IWX Motorfreight Inc., a 500-truck carrier based in Springfield, Mo., use a cardless system to purchase fuel. Instead of swiping a fuel card to activate a pump, drivers enter a card number along with other security information including a personal ID, unit, trailer and trip numbers.

IWX Motorfreight uses Transportation Clearing House (TCH) to collect and transmit data from fuel purchases made at Flying J and T-Chek for stations other than Flying J, says Todd Staples, fuel manager. The data that drivers enter at the pump is verified instantly with live information, such as their trip and equipment numbers, in the company’s enterprise software to authorize a transaction. IWX Motorfreight also can deactivate and assign new driver card numbers and security PIN numbers directly from its system, Staples says.

Reconciling the numbers
Tightly controlled pre-authorization systems help keep third parties from stealing fuel, but they won’t prevent drivers from reselling some of their fuel purchases at your expense. And you may not even be able to detect it when it happens, especially when fuel is sold in small amounts. Greg Barth, a driver for Joplin, Mo.-based Contract Freighters says he knows of drivers who have sold fuel in small amounts to get some cash because they could not get a cash advance.

Jeff Foster Trucking, a 185-truck carrier based in Superior, Wis., collects odometer readings from drivers through its TCH fuel card at each fueling and calculates fuel mileage on a monthly basis from the reports, says President Ken Thompson. Obvious violations, such as a 100-gallon fuel theft, would show up in drastic drops in fuel mileage. Not so for small quantities, Thompson says. “If a guy sold 20 or 30 gallons for cash, we’re not going to pick that up in a fuel mileage report. The drop in fuel mileage could be due to weather conditions,” he says. “We place a lot of trust in drivers when we give them a fuel card – it’s like giving them a blank check.”

Some carriers do consider petty theft important enough to monitor. To determine whether drivers might be selling small amounts of fuel at the pump or from their fuel tanks, Florence, Ala.-based USA Motor Express performs monthly audits to look for variances in beginning and ending fuel levels. The company measures fuel levels at the beginning of a month, adds the gallons purchased and subtracts the actual fuel burned during a month. An auditor then compares this number to the number of gallons remaining in the tank at the end of the month to detect a variance. Leon Balentine, president of the 245-truck carrier, questions drivers if he finds more than a 1 percent variable.

“The key for this to be accurate is knowing how much fuel he had in the beginning and the fuel at ending to make those adjustments,” Balentine says.

USA Motor Express uses a custom spreadsheet to perform fuel audits. Each time trucks enter the shop, typically twice per month, technicians visually measure fuel levels in the tanks in fractions (3/4, 1/2, 1/4, etc.) and enter the data into a spreadsheet, which converts fractions into gallons. The company imports the number of gallons purchased during the period into the spreadsheet from its McLeod LoadMaster software system, which automatically downloads fuel transaction data each day from Comdata.

To measure the gallons of fuel burned in the engine, Balentine uses PeopleNet’s PerformX, a system that links the engine’s electronic control module (ECM) data to the PeopleNet onboard mobile communications system to capture performance data. The company downloads the gallons burned for each truck into the same spreadsheet. For trucks that are not equipped with the PeopleNet system, USA Motor Express obtains fuel consumption data from Detroit Diesel’s DDEC reports.

Simple audits can isolate situations requiring more scrutiny.

Setting up such a detailed auditing process takes time, but the benefits go beyond catching the few drivers who steal fuel. The process also serves as a theft prevention tool. Drivers who know the company is auditing their fuel don’t want to try to justify why they are 50 gallons short.

“The fuel has to go someplace. It’s either processed through the engine or in someone else’s truck,” Balentine says.

Today’s technology allows for more frequent auditing. Every morning, Jim Greaney monitors fuel transactions from the previous day via a daily e-mail sent from Fleet One. The information includes the location, date, time and number of gallons purchased at each fueling. Greaney, director of safety for Bear Trucking, a 125-truck carrier based in San Bernardino, Calif., uses a satellite-based tracking system report to compare the data from Fleet One to the miles traveled by each driver the previous day.

Greaney compares the two reports for drops in fuel mileage and performs random checks on drivers to calculate fuel mileage.

“It takes a few minutes to quickly divide to see if we’re having a problem,” he says.

Information in real time
Balentine once caught a Memphis, Tenn.-based driver who gave his fuel card to his wife, who in turn sold fuel to owner-operators at a truck stop in West Memphis. “She did this three or four times before we caught up with it,” he says. Because USA Motor Express uses an ECM download to uncover problems, it is susceptible to sizeable losses in a short period of time. Detecting fuel theft in real-time would require a sensor to measure the actual amount of fuel in the tanks at each fueling and when the vehicle is parked.

SSI Technologies developed a fuel-level sensor to work with Freightliner’s Truck Productivity Computer. When Freightliner disbanded that project, the company began marketing the product as the Acu-trac Remote Fuel Level Sensor. The sensor uses sonic waves to measure the actual amount of fuel to a +/- 1 percent degree of accuracy. With a host software program and in-cab mobile communications, fleets can compare invoiced data with Acu-trac sensor data to report a discrepancy, says Gene Rohlman, marketing director for SSI Technologies.

The Acu-trac sensor integrates with the vehicle’s mobile communication system to provide tractor unit, location, date, time and the amount of fuel actually added to the tanks for each fueling, Rohlman says.

In addition, if a truck is parked idling, fleets can program the sensor to send an alert if more than the maximum allowance of fuel is lost from the tanks during the idle period. For example, the sensor will detect 40 gallons lost from the tanks when only a gallon was allowed for idling, Rohlman says. An additional use of the sensor is to improve the accuracy of fuel optimization systems (see “Closing the loop,” Information Technology, February 2003).

Dealing with drivers
Instant, electronic control and monitoring of fuel transactions can alert you to theft, but you still must deal with the driver. Bridget Hayes, credit card administrator for H&E Equipment, a 300-truck fleet in Baton Rouge, La., says her company has drivers sign a statement that the company can legally deduct any misuse of company cards from their paychecks or settlements.

“The few times that we’ve caught them, we’ve recouped our money via payroll, commissions and mechanisms like that,” Hayes says.

The company set up its Comdata cards to prompt drivers to enter their vehicle number and mileage at each fueling, Hayes says. Each month Comdata sends the company a report as a flat file that the company dumps into a spreadsheet to match fuel transactions with the manual entries of mileage that drivers make on their logs and trip sheets.

“If anything is out of kilter, it shows up in the report,” Hayes says. When a driver quits or is terminated, Hayes does another audit on the driver’s card before releasing his last check.
Tightly controlled preauthorization can prevent unauthorized use, but only vigilant fuel data auditing can effectively deter fuel theft.

Smart systems stop thieves
Radio waves can help secure on-site fueling

Drivers for Great Bay Distributing no longer swipe fuel cards or input information when fueling at its facilities. They just place the nozzle into the tank and fuel. But don’t take this as an example of poor internal controls. Great Bay Distributing’s fuel dispenser will only activate when the nozzle is inserted into the tanks of company-owned vehicles.

When a vehicle is parked in front of the Largo, Fla.-based company’s GasBoy International Fuel Point system, the vehicle identification, fuel authorization, fuel type, and odometer information are automatically downloaded from a small onboard computer.

To prevent fuel theft, Great Bay Distributing uses an intelligent fuel system that automatically transmits data through radio frequency (RF) technology among the vehicle, its fuel tanks, the fuel pump, and fuel management software.

Great Bay Distributing has used the Fuel Point system since January 1999, says Mike Coleman, fleet manager. Before installing Fuel Point, Coleman suspected that fuel was being stolen but never actually caught anyone. Now he is absolutely sure that all fuel is accounted for.

“If a vehicle is not equipped with an onboard computer, nobody can get fuel,” Coleman says. Relieving drivers of data input responsibility also assures accuracy of information.

“A card system is very high maintenance and you do not get accurate driver input,” Coleman says. The company also uses the fuel management software that comes with the Fuel Point system to track fuel economy on a daily basis to detect the possibility of drivers pumping fuel from their own tanks.

The City of Cape Coral, Fla., uses a similar radio-based system called RF Fuel from SCI International to manage fueling for 1,375 pieces of equipment, including police, fire, ambulance and off-road vehicles. The system prompts city employees to input an ID number and their vehicle mileage. The pump will not dispense fuel unless the nozzle detects a “ring” around the tank opening, says Fred DeBono, fleet/warehouse manager for the City of Coral.
“There cannot be any security problems,” he says. “They put in their PIN number, and we can identify the employee and know who is fueling.”

The vehicle identification unit, or “ring,” is installed on each vehicle fuel inlet. It contains a chip, pre-programmed with a unique number, that stores the identity of the vehicle. When the nozzle is inserted in the fuel tank, data is transferred to the SCI’s fuel management system via radio waves. The system verifies that the vehicle is indeed a company vehicle before authorizing the pump to dispense fuel.

The RF Fuel system records the vehicle number, employee name, location, date, time and amount of fuel dispensed. The fuel transactions enter the host software the instant they take place, DeBono says, rather than having to wait for statements from fuel card providers.

While RF-based fueling systems may be the wave of the future for onsite locations, don’t expect them to turn up anytime soon in truck stops.

“There would be a large cost in doing that – to gear up the entire trucking community to play that game,” says Gene Bergoffen, technology consultant for NATSO, the trade association representing truck stops and travel plazas.