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Fleet operations face challenges one company offers solutions. Motive’s all-in-one platform for fleet and spend management helps detect and reduce fraud.
These days, many fleets face challenges as the cost of operating vehicles continues to rise. Put simply, the cost of doing business is going up every year, and it’s negatively impacting the financial performance of companies that operate in physical sectors, like trucking, logistics, construction, oil and gas and field service.
According to the American Transportation Research Institute’s 2023 report, 2022 was the costliest year to run a vehicle-based business, surpassing the previous high set in 2021. The report showed rising costs across various areas, including fuel prices, purchase/lease payments, driver wages, repairs and insurance, leading to a 21% increase in the cost of running a vehicle compared to 2021, exceeding $2 per mile.
What’s more, the challenges stemming from rising costs are only expected to continue.
Obstacles facing fleet operators
Fuel prices remain extremely volatile and there is no end in sight, with the ban on import of Russian oil dramatically decreasing supply1, elevated tax rates on diesel and gasoline, and global inflation still well above target.2
Given that fuel constitutes 34% of fleet operating costs3, businesses are actively exploring ways to control and reduce the cost of filling their vehicles. Some strategies include using fleet cards to get discounts on fuel and informing drivers about behaviors that can improve fuel efficiency, such as optimizing routes, reducing speed, minimizing idling and maintaining vehicles for peak operating efficiency.
But even with these efforts to reduce spending and increase efficiency, there is still a hidden cost that many fleet operations are either underestimating or it is a complete blind spot — fleet card fraud. It’s the lurking problem that can shrink profit margins, even while fleets strive to manage spiraling expenses.
As fuel costs rise, cases of fraud have skyrocketed, and with tight profit margins, fuel fraud can have a devastating fiscal impact. Various forms of fraud exist, including third-party fraud like skimming and phishing, out-of-policy spending that inflates operating costs and employee-driven “friendly fraud,” such as fuel siphoning, side fueling and reselling.
FICO reported a 77% year-over-year increase in skimming-related incidents in the first half of 20234. Additionally, Sift’s Q1 2023 Digital Trust and Safety Index5 indicated that one-fifth of consumers either committed or knew someone involved in fraud.
In a recent survey conducted by Motive and Freightwaves among 100 fleets, nearly half of respondents estimated that up to 5% of their fuel spending was fraudulent. For a 200-vehicle fleet covering an average of 78,000 miles per vehicle, this adds up to over $500,000 in estimated annual fraud losses based on average fuel costs.
Despite these potential losses, many businesses struggle to detect and prevent fraud due to outdated technology and reliance on manual processes. Many fleets still rely on spreadsheets filled with data that’s been pulled from multiple systems and manual paperwork, resulting in data silos and delays in detecting fraud.
Solution for detecting fraud
For many companies, fraud detection is a challenging task, and their current solutions fail to provide the necessary visibility they need to reduce it. As a result, they are often unaware of the extent of fraud within their operations and fail to capitalize on potential cost savings.
Case in point: The Motive and Freightwaves survey found that 70% of respondents admitted that their companies were not doing enough to prevent fraud, with 53% not prioritizing it as a significant issue and 39% lacking the time and resources to do anything about it.
So, there’s a clear need to simplify fraud detection methods and move away from time-consuming manual processes that underdeliver. Survey respondents showed a strong preference for fleet and spend management solutions, AI and automated technologies and payment products with advanced security measures.
This is where Motive comes in with its all-in-one platform for fleet and spend management. By combining fleet and spend management, businesses can save time and gain valuable insights that help maximize cost savings. Motive’s single, integrated platform brings clarity to all aspects of business operations, including spending, tracking, maintenance, automatic IFTA calculations, fuel efficiency and more.
Motive’s unique advantage lies in its natively integrated and proprietary vehicle telematics, fleet management and spending data to detect fraud. For example, its fraud detection functionality uses Vehicle Gateway GPS data and Motive Card fuel spend data to match vehicle and purchase locations. Any discrepancies trigger a fraud alert, enabling Fleet Managers to take immediate action to prevent losses.
Motive’s fleet card further helps by offering customizable spend controls that can be set for individual drivers or groups of drivers, preventing unauthorized spending before it happens. Phone-based card unlock also combats against card skimming by requiring drivers to use their phones to unlock the card rather than a PIN.
With all these features and more, Motive Card empowers businesses to identify and reduce fraud, ultimately contributing to improved bottom-line savings.
Learn more about the impact of fraud in the Motive and Freightwaves report: Assessing the impact of fuel fraud on profitability.
