“Few organisations fully understand the cost of grey fleet,” Nigel Trotman, head of strategic consultancy at Alphabet, told attendees at the ‘grey fleet management’ best practice seminar.
The reporting capabilities of expense systems, which can be “variable at best”, according to Trotman, is one reason why organisation don’t know how much the grey fleet costs.
Trotman recalled how he had been unable to get business mileage from the payroll system at a previous employer and he believes that his experience is not uncommon.
He also pointed out that the grey fleet normally sits outside fleet budgets and outside fleet control.
He said: “It either goes into the overall travel and subsistence budget or it sits within the departmental travel budget and who is going to manage that? It’s almost just seen as a cost of doing business.”
Although the grey fleet doesn’t come “within the orbit of the fleet manager in terms of their budget” it should be “a significant consideration”, according to Trotman.
He highlighted how the grey fleet was costing one ex-public sector company £780,000 each year, with 145 drivers doing in excess of 6,000 business miles. One grey fleet driver was doing more than 35,000 business miles. There was a mixture of reimbursement rates and little or no data on the vehicles being used.
The company tackled the issue by putting high mileage drivers into company cars, introducing AMAP rates and stipulating that daily rental had to be used for 80-100 mile round trips.
Other alternatives to the grey fleet include salary sacrifice schemes, pool cars, car clubs, car sharing, public transport and ‘the sleeping fleet’ (company cars not in use).
Trotman said companies should question whether the grey fleet is necessary.
Scott Jones, head of facilities and environment at Southern Heath NHS, said that fleet managers need a good business plan to take to the board and that they shouldn’t “underestimate the resource requirement”.
He has found support from the Energy Saving Trust valuable but he pointed out that companies could also pay suppliers for their grey fleet expertise.