Warning: Invalid argument supplied for foreach() in /home/paymentsjoural/public_html/wp-content/themes/jnews/class/ContentTag.php on line 47
For the past few quarters, newsheadlines have been littered with the ongoing decline of fuel prices in theU.S.. While consumers have certainlybenefited from this drop, so have fleet operators. As the trucking industry continues toincrease the percentage of tonnage hauled on a year over year basis, theredoesn’t appear to be a slowdown in activity – which fleet operators arebenefiting from in the short-term.
One segment of the fleet market thatwould appear on the surface to be negatively impacted by the decline in pricesat the pump is the fleet card networks. Thoseoften closed-loop networks that maintain contractual relationships with boththe operators and the merchants and dominate U.S. market share of purchasevolume.
Apparentlyone leader in the segment is seen to be somewhat impervious to the lower fuelprices, at least for now – FleetCor Technologies. In a recent article in Investor’s BusinessDaily, FleetCor was called out as one fleet card network that may not have theshort-term exposure issuers would think to be facing. As thearticle notes, “…a wide spread between the wholesaleprice of fuel and the retail price offsets lower fuel prices — at least in thenear-term. While wholesale prices react quickly to oil-price changes, retailprices tend to follow more slowly. The spread, for now, offsets some of thenegative impact from declining gas prices, acting as a kind of hedge, analystssay.”
The U.S. fleet card market is very competitive,with relatively few players. Organizations that can remain strategic when external headwinds begin torise always benefit in the long-run.” . “The leading fleet card issuers have beenfairly innovative over the past years, looking to extend product lines anddevelop unique technology that enables greater controls for fleetoperators. Being in a strong financialposition just creates a good story for FleetCor, particularly as it begins theprocess to define for the market what their vision for the Comdata acquisitionwill mean going forward.
Overview by Rick Hall, Director, Commercial and Enterprise Payments for Mercator Advisory Group
Read full article Investor Business Daily