Paying the Piper: Implications for Travel Payment Solutions for the Oil, Gas & Marine Sector
Date: October 25, 2012
About this Resource
The requirement for this paper came about from discussions at the inaugural 2011 GBTA Oil, Gas & Marine Travel Symposium held in Aberdeen, Scotland. From initial presentations about payment solutions to discussions about card merchant fees, the transparency of nett fare mark-ups and transaction fees, delegates asked GBTA for more information to help them make informed business decisions.
Managing travel in the Oil, Gas & Marine sector involves the same skills, suppliers and products as are used elsewhere in the corporate travel world. However, distinct processes are required to manage the logistics of moving crews and workers to and from their vessels or worksites around the world. This involves multiple nationalities and mainstream and more remote travel routes, so selecting the most appropriate travel solution for each company requires a specialist knowledge and careful analysis of many complex and interrelated factors to achieve the best outcome.
That same attention to detail is necessary when selecting travel payment methods. There are circumstances where a rushed or ill-considered selection may increase direct and indirect costs for your company, whereas a well researched and properly implemented solution should ease the administrative burden and reduce cost.
It is always worthwhile to periodically review your payment arrangements and look for process savings through exploiting new technologies or by drawing in additional cost categories and suppliers to the scope of existing payment processes.
While speaking at the "Paying the Piper" session during the 2011 GBTA Oil, Gas & Marine Travel Symposium, one TMC executive highlighted that this sector has a much higher proportion of its workforce travelling than many traditional corporate industry sectors. He maintained that the high percentage of contract labour used by this sector creates challenges for individual corporate card settlement arrangements prevalent in many other industry sectors.
Nevertheless, card based travel payment solutions are widespread across many Oil, Gas & Marine companies with many operating Lodge Card arrangements in particular. With card issuers keen to attract the high volumes of travel expenditure associated with crew movements through their networks, they will offer rebates to help potential customers offset start up costs of converting to a card payment programme in return for significant volumes of business through their card networks.
The traditional credit account arrangement with a TMC also has a significant presence in the Oil, Gas & Marine sector as an alternative to card payments - particularly in the UK. During the 2011 Symposium the same TMC executive explained how many oil and gas sector clients in particular purchase high volumes of raw materials, manufactured products and services paid by invoice. He explained how many of his clients are used to integrating ebilling arrangements with their Enterprise Resource Platform (ERP) systems and are comfortable with handling travel payment arrangements in a similar manner.
This paper will both inform managers new to managing travel in the Oil, Gas & Marine industry about payment challenges and solutions and also serve as a useful resource for more experienced travel managers. It will examine the strengths and weaknesses of the respective payment solutions and will highlight which factors are of particular importance to this sector if comparing them.