The Risk of Business Related Accidents 

According to the Association for Safe International Road Travel, of all the high-income countries in the world, the U.S. suffers the highest rate of fatal automotive accidents. Gathering the data on vehicle accidents takes years, but most recently the National Highway Traffic Safety Administration revealed an increase of 17% in speeding-related fatal auto accidents in 2020. Consider too, the fact that people who drive for work spend more time on the road each day. Certain bad driving behaviors cause a higher percentage of accidents while employees are driving on the job. Distracted driving is the cause of 74% of accidents that occur while employees drive for work. 

The Cost of a Business Accident 

According to the 2021 Driver Safety Report, on-the-job highway crashes cost employers $66,119 per million vehicle miles traveled. What goes into that number? The CDC released a similar finding on the cost of fatal crashes to employers in 2019. Considering medical care and work loss, the number came to $56 billion. That’s a big number, and an important one, because it isn’t just considering the cost of repairs. It takes into account the recovery needs of the employees involved, the gap they leave in their absence. Businesses can do something to prevent these accidents with a company driver safety program. 

Company Driver Safety Program 

The goal of a company driver safety program is to protect both the employer and employee from auto accidents. There are several ways a company can institute safety measures, but picking and choosing can leave gaps in the safety program. A comprehensive company driver safety program includes three essential pieces. Those are: 

• Insurance Verification 
• Motor Vehicle Record (MVR) Checks
• Individualized Training 

Let’s start at the beginning with insurance verification. 

Insurance Verification 

If you drive a vehicle in the U.S. you are required to have auto insurance. That’s widely understood, so much so that some employers do not verify auto insurance when hiring employees. That can create serious issues down the road, for both the employer and employee. Fortunately, safety program vendors can make this process easy. Not only that, but any time an employee cancels their auto insurance, the right vendor will recognize the change and notify the employer and employee. 

Motor Vehicle Record (MVR) Checks 

Auto insurance is essential for any driving individual, but it’s not a guarantee of a good driving record. That’s why a large number of employers run a motor vehicle record (MVR) check on potential employees when hiring for driving roles. An MVR is a record of a person’s driving history, including accident reports, traffic citations, DWI’s and more. A company pulling an MVR receives the most up-to-date information on that individual’s driving history. Should the MVR check show a pattern of concerning behavior, employers will know the individual is not a good fit for the role. 

While most companies use MVR checks specifically during the hiring process, this leaves a gap. By not checking a driving employee’s motor vehicle record following hiring, companies can be blind-sided when said employee is found at fault in a serious accident. With continuous MVR monitoring, safety vendors inform employees the moment a violation is reported to their system. That means a company can catch troubling driving behavior and take action before it results in something serious.  

Individualized Training 

Both insurance verification and MVR checks are safety measures that alert a company when an employee’s driving record or insurance could be a problem. When a company receives information from either, they react as needed. Is there a preventative measure to a company driver safety program? Well, that’s where individualized training comes in.

There are many safety training options on the market. The best offering is an individualized training. Following an assessment of the driver’s current performance, the program provides learning modules specific to the gaps exposed in the initial assessment. This helps driving employees correct their problematic behaviors behind the wheel before they become accidents. 

A Comprehensive Company Driver Safety Program 

Investing in safety is also investing in cost control. Businesses instituting comprehensive company driver safety programs prevent liabilities from entering their mobile workforce and strengthen the driving skills of current employees. Insurance verification, MVR checks and individualized safety training each do their part to keep both employers and employees safe. Interested in learning more about implementing a comprehensive company driver safety program? Explore Motus Protect, a solution that provides the essentials to keep driving employees safe.

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The Main Factors of How Gas Prices are Determined

As we shared in the intro, there’s a large number of factors that can elevate or decrease the price of gas. But, when looking at most frequent culprits, the ones with the large impact, there are four main components of the retail price of gasoline. Those are the cost of crude oil, refining costs, taxes and distribution and marketing. While prices reflect these components and the profits of those who produce and distribute gasoline, there are additional elements at play that influence prices. These can include geographic location, local market conditions and unforeseen disruptions that lead to additional spend.

Production

The cost of crude oil is the most significant factor of how gas prices are determined. In fact, it accounts for more than half of what we pay for per gallon of gasoline. Put simply, this means that supply ultimately determines the price of gas. Major oil producers can drive up the price per barrel of crude oil with decisions that slow or cut production to decrease supply. Disruptions and geopolitical issues also slow production. For example, consider the Colonial Pipeline ransomware attack, the Texas Freeze and the Russian invasion of Ukraine.

Oil producers may also choose to ramp up oil production, increasing supply and reducing the price per barrel of crude oil. While this ultimately benefits drivers with lower costs per gallon, this maneuver is rarely about the price per barrel. Oil producers often take this approach in an effort to create a supply imbalance and gain market share from competitors.

OPEC’s Outsized Control

There are three top crude oil producers: Russia, the United States and OPEC+. Since the invasion of Ukraine, a large number of Western countries are no longer buying oil from Russia, even as they sell at a price far lower than the other producers in the market. This gives OPEC a large amount of control over the market, and they were already one of the top three.

As a bit of background, OPEC is an organization made up of a number of oil-producing countries. Those countries include Algeria, Angola, the Republic of Congo, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, United Arab Emirates and Venezuela. In recent history, OPEC has made significant efforts to increase the price per barrel of crude by unanimously cutting production. When the U.S. and most of Europe sanctioned Russia, many looked to OPEC to increase production. They opted to further cut production, an effort to raise the price per barrel further.

Refining

Refining oil is another process that impacts how gas prices are determined. These costs fluctuate based on the season and geographic location of the refinery in the U.S. Varying types of crude oil require different levels of refinement and rely on the processing technology available at the sites that produce it. Different parts of the country also have stricter limits on greenhouse gas emissions and require different gasoline formulations.

Federal gasoline standards mandate specific fuel mixes for different seasons. Gas stations must switch fuels based on the season to comply with EPA regulations and reduce air pollution. Fuel with a lower Reid Vapor Pressure (RVP) evaporates at a slower rate than blends with higher RVP. Winter fuel mixes require a higher RVP for engines to start and operate properly in colder temperatures. During the summer months, refiners produce fuel with lower RVP blends to limit unnecessary evaporation due to rising temperatures. Prices historically climb during the summer season because the additives used to lower the fuel’s RVP require a greater level of refinement.

Taxes

Federal, state and local governments tax gasoline. For that reason, taxes have the second-highest impact on retail costs. The current federal motor fuel tax rate is 18.40 cents per gallon of gasoline. This tax consists of an excise tax of 18.30 cents per gallon and the 0.10 cent per gallon federal Leaking Underground Storage Tank (LUST) fee.

In addition to excise taxes, states incorporate fees and taxes that include environmental fees, inspection fees, load fees, clean up fees and LUST taxes, license taxes and petroleum taxes. According to the U.S. Energy Information Administration, the average of total state taxes and fees on gasoline average 31.02 cents per gallon. Pennsylvania is the state with the highest tax rate on gasoline at 57.60 cents per gallon while Alaska was the lowest at 8.95 cents per gallon.

In a World Without ICE

Taxes may impact how gas prices are determined, but they also contribute to making roads drivable. Without routine maintenance to city streets and interstate infrastructure, we wouldn’t get very far. Which raises the question: what happens when electric vehicles overtake internal combustion engine (ICE) vehicles? Given the limited production, lack of infrastructure and slow adoption, we’re still many years from such a reality. But it gives voice to the argument for a vehicle miles traveled (VMT) tax.

Distribution and Marketing

The price of distribution and marketing are also play a role in what determines gas prices. Most refineries use pipelines to ship gasoline to terminals near consuming areas. From there, it is blended with other products and delivered by tanker trucks to individual fueling stations for distribution.

Oil refiners own and operate some gas stations while independent entities purchase fuel to resell to the public at others. Gas prices reflect this markup as well as local factors such as the physical fueling location, market competition and the owner’s marketing strategy. Business operating costs also affect prices and considerations include wages and benefits, equipment, insurance, lease spend, overhead and more.

Understanding the Price of Gas

As you can see, no one person is responsible for the price of gasoline. There are several components that impact how gas prices are determined in a variety of ways. Efforts can be made to alleviate pain at the pump, but prices are ultimately determined by supply and demand. Nothing short of increased gasoline production or reduced demand will have a significant impact on prices.

Interested in learning more on gas prices, how they vary across geographic locations and the affect it can have on your business? Subscribe to our blog here.

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Driver Compliance 

It might surprise you to find how many ways driving employees can be found out of compliance. Driver compliance should always be a priority, but following all the ways they might not meet certain standards can be dizzying. Here are three of the major ways driving employees can be found out of compliance:   

• Mileage Capture  
• Insurance and Driving Record 
• Vehicle Condition  

Mileage Capture 

As you may know, mileage capture is an essential component of most, but not all vehicle programs. Mileage reimbursement and fixed and variable rate reimbursement programs both require mileage logs. To meet IRS compliance standards, each mileage log must include business mileage, date, start and end locations and business purpose. Employees driving fleet vehicles should also be tracking their mileage, just for different reasons. 

Mileage Reimbursement 

Employees reimbursed for driving their personal vehicle at a cents-per-mile rate have to submit mileage logs to receive payment. If those mileage logs do not meet IRS compliance standards, employees will have to resubmit with the appropriate information. Non-compliant mileage logs put both the driving employee and the company at risk of IRS audit. 

Accountable Allowance 

A typical car allowance does not require mileage logs. However, if a company is looking to cut down on tax waste, they may implement an accountable allowance. In this vehicle program, driving employees also submit mileage logs. The repercussions of not submitting mileage logs or submitting ones that don’t meet IRS compliance standards aren’t as high as an IRS audit. The car allowance will simply be taxed, resulting in a smaller reimbursement, one that also costs the company more. 

Fixed and Variable Rate 

The FAVR program is also dependent on IRS-compliant mileage logs. Much like the mileage reimbursement program, employees will not receive their payment without logs. And, if those mileage logs do not meet IRS compliance standards, employer and employee may be exposed to audit.  

Company-Provided Vehicle 

This program is a bit of an outlier. The IRS views personal use of a fleet vehicle as a taxable benefit. That means miles won’t need to be tracked while the employee is driving for business. Only when they’re driving personally should they record their mileage. At the end of the day, they owe the company for the personal miles they put on business vehicles. Some companies set up a personal-use chargeback, but these are loosely enforced. In the event of an audit, only IRS compliant mileage logs will stand up to scrutiny. 

Solution to Mileage Log Compliance 

Before we talk about the solution, let’s talk about the challenge. Why is tracking mileage so difficult? To many, it may just be an unfamiliar process. That, or they have difficulty finding the materials to manually capture the right information. The best solution is to remove the friction point of mileage capture. That’s why so many companies choose automated mileage capture. 

The right vehicle program vendor can enable mobile workers to capture their mileage effortlessly and submit it anywhere in IRS compliant mileage logs. No more manual processes on the road, no more missing essential information. Driver compliance issues with mileage capture become a thing of the past. 

Insurance and Driving Record 

When a company hires an employee for a driving role, the interview process should include some kind of screening. Unfortunately, this isn’t always the case. According to our most recent benchmark report, as many as 22% of companies don’t check motor vehicle records at any time. Companies assume considerable risk when they don’t check driver compliance.  

Solution to Driving Record and Insurance Compliance 

While a mobile worker’s driving record and their auto insurance are not the same thing, the issues with both of these can be solved with one solution: a comprehensive driver safety program.  

With the right vendor, insurance verification is mandatory. Much like mileage logs, employees will not receive their reimbursements unless they’ve submitted proof of auto insurance. This is for the safety of the company, the company’s mobile workers and everyone else on the road.  

Checking a potential employee’s driving record should be an essential part of the hiring process. Companies do this by running a motor vehicle record (MVR) check. These can help employers determine if a candidate is the right fit for a driving role. But MVR checks can also help companies mitigate risk beyond the initial hire. Continuous MVRs will inform employers when a driving employee commits an infraction. This can help companies catch bad behavior before it becomes a trend. 

Vehicle Compliance 

Driver compliance is tied closely to the vehicle they drive. There are many ways a vehicle can be out of compliance. For some vehicle programs, a certain car may be too old to be supported. For companies pursuing greenhouse gas (GHG) goals, certain vehicles may have too big of an emissions footprint. Vehicle compliance is dependent on the company’s priorities and their vehicle program. 

Vehicle Compliance Solutions 

Tackling vehicle compliance can be tricky. Even with a fleet of vehicles, where a company has full control over their vehicles, making the change requires thorough consideration. For companies that reimburse employees for the business use of their personal vehicle, that change can be more challenging.  

Whether the vehicle doesn’t fit the program or its emission levels are too high, the best approach here is incentive. With the right vendor, employers can ensure that employees who shift to compliant vehicles receive higher reimbursements to help with payments, or work to help them through other options.  

The Importance of Driver Compliance 

Driving employees are an essential piece of any company. When a mobile worker, or their vehicle, is out of compliance, it can put the company in jeopardy. Vehicle programs tend to take a back seat in the grand scheme of company priorities, but ensuring driver compliance is vital. The solution to most compliance issues can be tied to the vehicle program provider. With the right vendor, compliance issues become a thing of the past. Ready to learn more about choosing the right vendor? 

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The post Ensuring Driver Compliance in Your Mobile Workforce appeared first on Motus.

Cost 

When it comes to making business decisions, cost will always play a big role. Often, it’s a reason against adoption. “We’d love to do corporate driver safety training, we just don’t have the budget for that right now.” That’s understandable. But there are also costs for not having one. 

Lost Working Hours 

According to the 2021 WorkAnywhere Benchmark Report, companies lose 100,000 workdays to accidents each year. That’s a big number. Think about employees involved in serious accidents. Either their return to work is delayed by weeks or months, or they’re no longer capable of returning. The result? Either the company shifts duties to coworkers who already have their work cut out for them, or the company begins the hiring process. That process involves vetting, interviewing and finally training a candidate to a point where, three months later, they’re hopefully in a position to fulfill all that’s required of them. Unfortunately, in terms of cost, these are best case scenarios. 

Liability 

The 2021 Driver Safety Report found that on-the-job highway crashes cost employers upwards of $66,119 per million vehicle miles traveled. As the CDC revealed in their findings, medical care and work loss make up a large part of the cost of fatal crashes to employers. Another area of potential cost? Liability. 

How liability impacts a company depends heavily on their vehicle program. For example, businesses with company-provided vehicles are often targeted by lawsuits following accidents involving fleet cars. These lawsuits often involve millions in settlements and legal fees. 

Benefit 

In light of the costs, a couple of benefits are easy to jump to: fewer work hours lost, reduced liability. Those are two huge benefits. As much as we’d like to believe otherwise, driving is inherently dangerous. It doesn’t help that we surround ourselves with things that can distract us, helping us form bad habits. In fact, distracted driving has resulted in 74% of accidents that occur while employees drive for work. Corporate driver safety training exists to protect both employers and employees. Its benefits do stretch beyond liability and work hour costs. 

Recruiting and Retention 

Time and time again, employees have been found to engage more when they think their employer cares about them. It might not be the first thing on their list, but it has an impact and it matters. By implementing a corporate driver safety training program, companies show not only current employees, but potential employees as well.  

What does the right training program look like? 

There are many ways a company can go about driver safety training. The best approach focuses on the individual. A group of driving employees may walk away from a training with some new tips, but when their training is specific to their issues, they have an easier path to correct bad driving behavior. Following an assessment of their driving behavior, the right program shares learnings that help the mobile worker correct poor driving behavior.  

More Than Corporate Driver Safety Training 

Companies can do a lot to help their mobile workers by implementing a corporate driver safety training. However, with only safety training, there are several gaps. By taking a more comprehensive approach, businesses can protect both themselves and their employees from potential hire to seasoned mobile worker. In addition to individualized training, that approach includes insurance verification and motor vehicle record (MVR) monitoring. Implementing all three may seem like a lot of work, but with the right vendor it doesn’t have to be. 

Comprehensive Driver Safety with Motus 

With Motus, you can handle insurance verification, MVR monitoring and corporate driver safety training from one platform. No worries about working with multiple vendors for each offering. We handle those pieces for you, delivering the information you need and sort through what you don’t. Interested in learning more about our comprehensive safety offering? 

Learn More Here

The post Corporate Driver Safety Training: Benefits and Drawbacks of Not Prioritizing Safety appeared first on Motus.

The War in Ukraine 

After years of threatening to do so, Russia began its invasion of Ukraine. In retaliation, major traders and shipping companies have rejected Russian goods. Countries have leveled sanctions against the invading country as well. The U.S. specifically announced a ban on Imported goods from Russia including crude oil, natural gas and more. The result has created the desired effect and crashed the value of the Ruble. Unfortunately, Russia is one of the top producers of oil. 

U.S. Oil Production 

The U.S. is also one of the world’s biggest oil producers. During the pandemic, demand for oil plummeted. Oil production slowed to a halt and refineries are still returning to their full production levels. Unfortunately, it isn’t as easy as flipping a switch. Scaring the price up, however, does appear to be so easy. Speculators betting on the increasing price of oil are only fanning the flames. 

The White House Response 

Demand for oil has steadily increased over recent months, pushing prices higher. To ease prices, Biden ordered the release of a number of reserve oil. Even the release of millions of barrels is unlikely to have a major impact on the current price of gasoline. The White House is exploring other options to offset the loss of Russian crude such as increasing production with other major oil producers. UAE and Iraq have already announced an increase in production, considerably dropping the price.   

How will this impact your company? 

Like many companies, yours relies on its driving workforce. Right now, your vehicle program might seem like the only choice in a list of bad options. Companies offering car allowances may find their drivers unable to cover their business mileage. Businesses might consider increasing allowance amounts or even issuing fuel cards to employees. Businesses with fleet vehicles will be staggered by gas card statements and the resulting increase in operational costs. Companies providing a mileage reimbursement may have employees complain their payment isn’t enough. Fortunately, you can improve on your situation. 

What can your company do? 

Switching to a flexible vehicle program, one that can scale up and down with economic conditions, is the only option. That’s where the fixed and variable rate (FAVR) reimbursement comes in. With FAVR, employers reimburse employees for the fixed and variable costs of driving personal vehicles for business. These rates are calculated geographically to account for the costs employees actually incur and rates adjust frequently to reflect volatile costs like gas prices. That means paying employees specifically for what they’re owed, not an amount based on a national average. By implementing FAVR with the right company, companies can control costs and reduce administration. Interested in learning more about our FAVR offering? 

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The post Oil Check: The War in Ukraine and Skyrocketing Fuel Prices appeared first on Motus.

Legal Risk of Not Reimbursing 

Before jumping into what companies should reimburse for, let’s consider why. Companies providing employees with stipends for at-home office needs see higher engagement from their workforce. These companies are also avoiding legal risks. A growing number of states like California and Illinois have laws that require organizations to reimburse employees for business use of personal assets. However, there are also national laws, like the Fair Labor Standards Act (FLSA), that cause big headaches for employers that aren’t in compliance. Companies hoping to avoid litigation may find this a convincing reason to reimburse. 

What should companies reimburse for? 

There are a few ways companies can tackle this. One is covering the bare essentials. At the top of that list would be internet and, depending on the employee’s role, device use. For companies more concerned with the legal risk of not compensating their employees for the business use of their personal assets, this is the most likely choice. 

Another method companies might take is covering what employees need. Many employees worked from kitchen tables and other makeshift office setups at the outset of the pandemic. Some likely continue to do so. Companies that understand the needs of their employees provide reimbursements for internet and device use, and in some cases additional funds to help pay for a home office set up. That may also include an increased internet stipend, to help pay for better service. 

The third method would be covering more than the essentials and home office set up, going on to include the costs of increased utility use and even a portion of rent. Before the onset of the pandemic, most employees left their homes for at least 40 hours each week. With everyone at home more frequently, the price of electricity and heating rose. Similarly, prior to the pandemic, very few employees worked from home. Employees made mortgage payments or paid rent for their time in their home. Many employees today make those payments for the time they spend working from their homes for business purposes. 

Each of these options raises a greater question: how do you calculate this reimbursement? 

Remote Work Stipends 

Most companies are providing a remote work stipend. Following a rough estimate or close approximation, they take a nice round number and send it as a one-time payment to cover home-office needs. Or, they add it to recurring salary checks. The issue with a stipend? It’s not specific to the employee’s geographic location and costs. Some employees will come out with more, others with less.  

The Motus Work Anywhere Reimbursement Solution 

Using the Motus Platform, we take geographic data into account and provide a calculated rate specific to the individual employee’s location and calculate business use percentage specific to that employee’s role. This ensures the payment is fair and accurate to both company and employee. What all is included in our Remote Work Reimbursement solution? That depends on what your company wants to reimburse. Our rates can include mobile devices, internet and home office expenses as specified.  

Interested? You can learn more on our remote work reimbursement solution page. 

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The post What to Reimburse When Providing a Remote Work Stipend appeared first on Motus.

More People Are Going Online For Bigger Purchases

There’s buying a pair of shoes online, and then there’s buying a vehicle online. You might want to try on a pair of shoes in person, but if you know your size, you can just return an online purchase. What about a car? Well, as it turns out, the same can be said for vehicles. Nearly 30% of new car purchases in the U.S. were made online in 2020, which tripled the amount from the previous year. 

There were a few external factors that probably went into those purchases, right? More people were giving up public transit and opting for vehicles, but they didn’t necessarily want to shop in person. By completing the process online, they had a better shopping experience. Buying a car in-person involves a lot of time spent searching, haggling and filling out paperwork. Moving the same process online helped buyers find the car they wanted easily, determine a final price, and complete the purchase without the major pain points.  

According to the report, a digital experience in the car buying process can shorten transaction times by as much as 75%. That convenience and peace of mind is more than enough to solidify online vehicle purchases as the way of the future. 

Requesting Vehicle Maintenance for Your Driveway is Increasingly Popular 

As with the car buying process, the vehicle maintenance process changed during the pandemic. Many didn’t drive nearly as much as they had prior to COVID-19, but when it was time for an oil change or the vehicle wouldn’t start, the question arose. How do I go about this safely? Many consumers decided to have maintenance delivered to their own driveway. And with the added convenience, it’s easy to see on-demand service sticking around. 

Consumers can save money through on-demand vehicle maintenance, but perhaps the biggest win is the time back in their day. Appointments for car repair include commute time, plus time waiting for the maintenance itself. This is at least an hour and likely more – especially for people that need to coordinate carpooling for drop-offs and pickup. Delivery to your driveway diminishes time you’re required to spend on said maintenance to practically zero. 

Insurance is Going Digital 

Necessary physical functions in the insurance process are being replaced with more functional esignatures, face recognition and more. These changes are an improvement on quality of the process not likely to go away. How does that apply to on-demand services? 

Shopping for auto insurance was never anyone’s idea of fun. Anyone going through the claims process would likely agree it’s even less enjoyable. The pandemic saw large changes to both practices that makes each easier to navigate. Consumers can take advantage of insurance aggregators that offer the most cost-effective insurance rates available without forcing people to contact every insurer. But that’s not necessarily new. New is the tech advances allowing better data collection and more accurately created risk profiles. 

Is the Future All Digital? All On-Demand? 

A lot has changed in a little over a year, and more is changing each day. The advancements we’ve made in 2020 will likely stay with us for as long as they’re more useful than a newer, better alternative. In the near term, however, we can anticipate a hybrid of these trends. Some people will likely buy their vehicle through an app and test drive it when it arrives, while others may peruse their local dealership before making a purchase. Others may request on-demand vehicle maintenance with the understanding that a serious repair will require a visit to an auto shop. But on-demand services work too well to be dropped so quickly after they’ve proved their value. Interested in reading more? You can find it here. 

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The post On-Demand Services: Popular During the Pandemic and Here to Stay appeared first on Motus.

As we look back at last year, it’s amazing to see the changes that occurred since we released our first Mileage Trends Flash Report in May of 2020. Today, we’re excited to share our latest – and final – flash trend report, which found that field activity is currently 75% higher than it was the week of April 5, 2020.

Field activity can serve as a strong indicator of economic health. We’re now trending in the right direction, with the average business mileage during WorkForward rising to 70% of pre-pandemic levels.

To the many business leaders who followed these regular reports to monitor field activity, we hope they have been helpful in decision-making over the past year, and that this final report serves as an indicator of where we’re headed – onward and upward.

Here’s a closer look at other notable findings from the report:

• Regionally, business mileage has increased across the country. The South and Western U.S. are experiencing the highest level of activity, both trending at about 72% of pre-pandemic levels. The Midwest is experiencing 70% growth in activity and business mileage in the Northeast has grown to 64% of pre-pandemic levels.
• While activity levels vary from region to region, there is an even wider variety among industry sectors and their many subsectors. After seeing similar trajectories across most industries in March and April of 2020, different businesses are recovering at different speeds. Activity trends also differ depending on where and how companies operate.
• Here’s a closer look at the recovery of various sectors:
  • Business Services (102%, +27% above the WorkForward average)
  • Food & Beverage (86% of pre-pandemic levels, a +46% increase over the lowest point the week of April 5^th)
  • Construction & Building Materials (80% of pre-pandemic levels, -5% below the average)
  • Machinery (70% of pre-pandemic levels, +1% above the average)
  • Pharmaceutical/Biotech & Medical Devices (69% of pre-pandemic levels, +3% above the average)
  • Hospitals & Healthcare (64% of pre-pandemic levels, -15% below the average)
  • Retail (61% of pre-pandemic levels, +1% above the average)
  • Automotive (52% of pre-pandemic levels, +11% above the average)
  • Energy & Environmental (52% of pre-pandemic levels, +8% above the average)
  • Manufacturing (49% of pre-pandemic levels, +3% above the average)

Signs of pent-up demand are showing up on the leading edges of reopening states. As vaccinations increase among the population, we should expect to see a rapid recovery in business mileage across a broader range of economic sectors.

Business leaders can stay abreast of these trends and analyze their indicators to determine the best course of action. This may be our final flash trend report, but companies they can still rely on Motus as a resource for updates on activity trends in their areas and industries as they WorkForward.

Again, thank you to everyone who followed the Mileage Trends Flash Reports. For those who would like further guidance about what this data means for you, we’re here to help. Please don’t hesitate to reach out!

The post Our Final Mileage Trends Flash Report (April 8, 2021): Business Driving Activity 75% Higher Than the Week of April 5, 2020 appeared first on Motus.

Price of Oil

For most of the pandemic, fuel prices have been below typical levels. This is largely due to the global surplus of oil caused by the rapid pause on travel and shipping in early 2020. However, in the past few months, large oil distributors have focused on rapid rebalancing.

For nearly a year, OPEC+ has held to production caps across all its traditional and expanded membership. Since demand was exceptionally low for most of 2020, major oil producers like Saudi Arabia had to weather low prices. In January, Saudi Arabia decided to accelerate the market rebalancing by cutting an additional million barrels per day (b/d) of oil production.

Outside of OPEC’s influence, another large producer was also forced to make cuts. EIA estimates U.S. crude oil production declined by 0.5 million b/d in February as a result of extremely cold weather that caused well freeze-offs. This additional reduction in supply occurred against a backdrop of rising global oil demand.

Constricting Supply

As a result of OPEC+ capping their production and mother nature limiting that of the U.S., global oil markets constricted severely last month. According to EIA, February global liquid fuel supplies fell by 1.8 million b/d from January. Which was met with a rise in liquid fuels consumption of 2.2 million b/d. The result? The strongest monthly global oil inventory draw since inventories began falling in mid-2020. Initial estimates show February global oil inventory draws were 0.6 million b/d larger than forecast last month.

Though driving levels have not recovered to pre-pandemic levels, demand has been steadily increasing over recent weeks. Increased driving activity is doing its part to quickly rebalance world oil supply, along with some unexpected influencer events. Some refineries affected by the Texas Freeze are still coming back online, and it may take others until April at the earliest. Another disruption occurred when Yemen rebels attacked a key facility in Saudi Arabia. Though the attack itself does not appear to have affected production, prolonged targeting of this and similar facilities could have greater impact.

Developing Demand

As vaccinations rates and economic activity increase, so has the demand for oil. Due to the production caps and acts of nature, this demand for fuel is unfortunately beginning to exceed current production. How close are we to pre-pandemic levels? According to EIA, “the world consumed 95.9 million b/d of petroleum and liquid fluids in February 2021… down 1.6 million b/d from February 2020.” This may only be an estimate, but it indicates the smallest year-over-year decline since the pandemic began.

Return of Low Gas Prices

Unfortunately, paying less at the pump is unlikely to happen in the next few months. As outlined in a previous oil check, refineries need to retool to produce summer’s gasoline blend. This blend is also more expensive to refine, which typically results in higher costs of summer fuel. The timing of all these—intentional and unplanned—market influencing events has merged into a solid floor under fuel prices. In short, we’re unlikely to see prices relax until June or July.

Given how consistent OPEC+ has been about their production caps, supply will likely remain constrained in the near term. Rising demand only works to guarantee that. Some are convinced that we will see demand reach pre-COVID levels during the summer. Others believe too much has changed about the way we work to believe demand will ever return to the levels of 2016 to 2019. Which is right? We won’t know until it happens. But in this uncertainty, the company with the most flexible vehicle program is best equipped for the situation. Check out our FAVR offering to learn more.

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