Modern Truck Stop News, August 1996

New Study Reveals Commercial Fleet Plans

According to fresh research by Havill & Company, Inc., over five billion gallons of fuel will be dispensed this year at private commercial sites that are not in compliance with 1998 federal EPA regulations.

Joseph Slagle of Havill said, "Our survey of over 1,300 commercial fleet operators found that only 52 percent of these operators with underground tanks are currently in compliance with all 1998 EPA regulations; including corrosion protected tanks and piping, spill containment, overfill prevention, and leak detection." Many fleet operators simply cannot afford the cost to comply with corrosion protection requirements for underground storage tanks. As a result, the demand for gasoline and diesel fuel at retail service stations is projected to increase as some commercial fleet operators shut down their on-site facilities and refuel off-site.

However, there are also many fleets that have the financial capability to comply, and equipment suppliers are anticipating a robust market as these fleet operators upgrade. Both petroleum marketers and equipment suppliers are gearing up to capture their share of this demand bubble. Mr. Slagle continued, "Our forecast shows that an additional $2.3 billion per year in fuel sales will shift to the retail service station market by 1998. Add TBA, fast food, and convenience store items, and it’s easy to see why this market has caught the attention of petroleum marketers." Fleet cards have been the primary marketing tool for attracting fleets to retail outlets. New security and reporting features provide fleet administrators with the same control they have at their on-site facility, without the liability associated with on-site fuel storage.

"Still, more fleet administrators plan to upgrade their on-site facilities than close them," Mr. Slagle noted. For many commercial businesses, fleet operations are an essential business activity. These fleets require 24-hour on-site fuel access to run efficiently. The operators of these fleets are planning equipment purchases to bring their facilities into compliance with the 1995 EPA regulations.

Equipment suppliers, fleet card suppliers, and petroleum marketers are now able to use sophisticated marketing tools to exploit this one-time opportunity. "The most significant result from this research is the development of demographic models for profiling fleet accounts who have four of more vehicles," Mr. Slagle explained. "Prior to this research, our clients have a problem figuring out how to prioritize sales prospects. That’s why we initiated the study—to model the commercial fleet market so they could target fleet operators who are ready to buy. These profiles provide information on vehicle demographics, on-site refueling facilities, off-site purchase patterns, and credit card usage. Clients are now able to prioritize commercial prospects, then distribute these prospects electronically to sales reps who are equipped with notebook computers."

The research was funded by companies who are leaders in petroleum equipment manufacturing, fleet card processing, and petroleum marketing industries, including six of the seven largest US refiners. Prioritization of sales prospects is just one of the uses of Havill & Company’s newest study. The study is entitled "The DOE-EPA Regulated Commercial Fleet Market Fuels, Equipment, and Services Forecast 1994-2000."

This study is the first research of its kind to analyze the off-site and on-site refueling practices of commercial fleet operators. It breaks the commercial market into nine segments: agriculture, construction, service, wholesale, retail, over-the-road/passenger carrier, utility, service, and government. The refueling practices of each segment are analyzed in detail. Each segment is characterized in terms of vehicle demographics, fuel consumption, fleet card usage, and on-site refueling facilities. The study provides subscribers with a forecast of how DOE and EPA regulations are changing the refueling practices of commercial fleets.

Havill & Company is a marketing research and consulting firm that specializes in the petroleum industry. In addition to market studies, Havill & Company also assists petroleum equipment manufacturers, fleet card providers, and petroleum marketers in developing targeted marketing programs. The foundation for these programs is a database of commercial fleet operators and UST owners that can be customized according to client specifications in order to identify key accounts. Company sales representatives in the field are then able to prioritize likely prospects, thus increasing their sales effectiveness.

Further information about this study is available by contacting Joseph Slagle of Havill & Company in Toledo, Ohio at (419) 841-2244.