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July 2010
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Many fleet operators are simply not with the programme when it comes to managing their in-house fuel stocks or on-road usage, leaving themselves wide open to theft and fraud. So says Hein Crocker, MD of Dreamworks Technologies, a comprehensive fuel and fleet management systems service provider which has been in existence for a number of years. C rocker, who can count a number of high profile, blue chip transport and logistics companies such as Unitrans Freight and Logistics and Grindrod Logistics among his clients, says it is his belief that many commercial transport companies rely on service providers, banks and oil companies to ensure that no fraud/theft is committed. There is also a strong reliance on electronic fuel dispensing systems, such as e-Fuel/Fuelmaster, to prevent theft/fraud without really managing the data derived from these systems.“When promoting products and services, these companies focus on the fact that their systems ‘prevent’ theft/fraud but do not include a single aspect that could negatively impact on fuel consumption,” says Crocker. “We analyse huge accounts daily and have found some shocking results in the quality and integrity of fuel data.” Crocker says some of these service providers admit that their systems are not "fool proof" and that clients also have a responsibility in managing the data. This was never put forward as an issue when the systems were initially sold to them. Wet stock management Another area of concern is wet stock management (home base facilities) and the lack of proper control measures when managing replenished stock. Crocker says a lot of transport companies simply rely on the pump meter readings on the bulk tankers and don’t bother to do dip readings before and after stock replenishments to determine any discrepancies. “Many companies do not even document the stock replenishment process where variances between metered stock and dip stock can be addressed,” he explains. “There are still many tankers doing gravity drops which make the management of the stock even more crucial. “How many companies know that you can actually dip each compartment in a tanker before and after a drop to determine correct volumes delivered and compare the tank compartment dips with the fuel tanks dips and with the pump meter readings on the tanker? “This gives you three ways of determining and ensuring that correct volumes are delivered. This function should be performed by a member of the management team given the value of fuel and the impact of an undetected short delivery.” Crocker says Dreamworks provides its clients with written standard operating procedures for refuelling, both internally and on-road refuelling. “We also provide them with documentation to assist them in managing their tanks and stock on a daily basis. This includes daily stock in and out, tank adjustments and tank reconciliation. We further enhance this by providing them with tank management software that integrates with our fuel management software.” Further to this, Dreamworks finds a lot of clients still manage on averages. “If a fleet average is 54 l/100 km and the fleet achieves 56.5 l/km on average, many companies will see this as being in line with the fleet norm,” Crocker says. “The danger here is that you can absorb fuel theft in averaging out the consumption without even realising it. It almost seems that some operators always want to justify high consumption. The clients that use our software have proven the opposite.” Crocker provides the following hypothetical example to illustrate his point. “Say a fleet does 2 000 000 km a month and should run at 54 l/100km. (This is a total of 1 080 000 litres a month). At month end, the calculation on averages indicates a consumption of 57 l/100 km. This means for every 100 km travelled, the fleet used 3 litres in excess – 2 000 000 divided by 100 = 20 000 x 3 = 60 000 litres at R7.50 a litre. The result is an overspend of R450 000. “Take this a few steps further and measure consumption with every refuel and then quantify losses in Rand and litre value and the clients react immediately. Obviously, a quantifiable loss comes across as more meaningful than a consumption figure.”
Theft and fraud trends Crocker says there are many different means of committing fuel fraud/theft, be it by an individual (a driver), a group of people facilitating a transaction (driver, pump attendant and cashier) or entire syndicates who will create a demand (which there always is) and negotiate the provision of the product either by hijack/theft or in collusion with supplier/driver/receiver. Theft and fraud occurs at every link in the supply chain taking place at retail fuel sites, home base sites and from on-vehicle fuel tanks. The most common methods of bleeding diesel out of the system include the following:
Crocker says it is important for vehicle fleet operators to exercise caution when choosing a company to provide critical management information which will have an impact on how they manage their vehicle fleets. “The ability to understand the challenges of the commercial transporter and to “talk the talk” when it comes to costs and income ratios, CPK’s, fines managements, risk exposures, driver behaviour and the impact of driver fatigue - to name a few - make the transporter feel comfortable that he or she is dealing with a company that knows what they are talking about and can make a contribution to their business,” he says. |
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