In-house fleet managers offer companies many benefits which do not always show up on the company balance sheet.
If you’re reading this, then you probably already know the vital, often unsung, role that a fleet manager plays in the overall success of a business.
Fleet is one of the biggest cost centres in any company and one which can spiral out of control without a knowledgeable person at the helm.
However, in recent months Fleet News has heard of more fleet managers being made redundant for ‘cost-cutting’ reasons, with the entire fleet operation either completely outsourced or absorbed by different departments within an organisation.
While on the face of it this reduced headcount may result in short-term savings, it can have significant negative ramifications on the overall operation of a business which are not necessarily seen on the balance sheet.
The vehicle fleet is critical to many businesses and any weakness in its operation, whether it is excessive downtime, unsuitable vehicles, a high collision rate, driving licence compliance or something else entirely, can have a significant impact.
Of course, the work of a fleet manager can also result in major cost savings. For example, in the three years since becoming fleet manager for Genus, Adrian Davies reduced its £5million fleet budget by £500,000 through a number of initiatives.
These included negotiating improved terms with vehicle manufacturers, but for Davies reducing spend is only part of his job.
“I am employed to bring the fleet up to standard with the correct policies in place and with everyone understanding their role within the fleet,” he says.
“Too many times, fleet management is a bolt-on to another job; for me, it’s my role.”
While anecdotal evidence suggests the number of dedicated fleet managers is declining, there have been occasions when companies have recognised the importance of having a specialised, focused operator and have created new roles.
Construction firm Wates Group, for example, has recently created the position of group fleet manager to improve its operations, while health insurance company BUPA last year reintroduced the role of fleet manager.
“We had a fleet manager in the business up until about four or five years ago, when the fleet and travel manager left the business and then the operations of fleet management went to HR, but it became purely transactional and liaising with the fleet management company,” says Abby Lamb, fleet manager at BUPA.
“What BUPA recognised over time was the bigger picture, especially around risk and grey fleet management, that couldn’t be handled by HR, so it brought the position back.
“Risk, compliance and health and safety are the big areas and that is where having someone dedicated to that complete knowledge and having an understanding of how the business works is actually where it’s important to have a fleet manager on site.”
Gareth Wilsher, fleet manager at AT&T, agrees that the increased knowledge of internal and future requirements of a business an in-house operator has, compared to an outsourced supplier, gives their employer a huge advantage.
“An outsourced company will not have full knowledge of the company culture to be able to manage the fleet in the right way and in the direction that the company wants to go,” he adds.
Nigel Boyle, administration and technical director at hatchery company PD Hook, where he is responsible for around 400 vehicles, says: “I have come across outsourcing where somebody is looking after maybe 20 different companies and they’ve all got different rules and regulations with areas such as insurance, which has led to people getting quoted the wrong thing.”
It is these different rules, as well as the wide range of industry sectors and fleet requirements, which increases the value of an in-house fleet manager.
“Fleet management is not a one-size-fits-all dynamic,” says Ken Needham, director of fleet and logistics at Foxtons.
“The requirements for an estate agent like us, for example, are very different to those of a large computer centre.
“We are based in central London so we have some unique scenarios that can only really be addressed by in-house operations.
“We have a very young, dynamic team of estate agents and the job of my department is to try and take the strain out of having a company car and all the issues associated with it to allow them to make the company successful.
“We have to look after the business and residential permits for them, then you have congestion exemptions, all the toll charges, parking fines, and so on.
“All that is dealt with by my department so we have someone in-house our drivers can go to: they are not stuck on the phone – ‘press option one’, ‘press option two’ – you actually have them speaking to you face to face. They have a human they can talk to.”
Other organisations have different challenges in which specialist, in-house knowledge can help.
“We are in agriculture so there are a lot of different quirks where an internal fleet team will know what is really useful,” says Boyle.
“One example that comes to mind is vans and/or pick-ups with trailers coming up to the weight bracket where they need a tachograph.
“However, there is a specific get-out in the regulations for agriculture which is something we are aware of but an outsourced fleet management company may not be.
“This means we can advise people when they are choosing their vehicle to get the appropriate one to avoid unnecessary regulation, for example, rather than getting caught up in it needlessly.”
The personal touch
Outsourcing the fleet management role also removes the internal contact point for drivers who have issues with their vehicles.
“It’s important that employees feel looked after with the running of their car,” says Boyle.
“A lot of people feel having an in-house fleet department gives them a friendly face or voice that they know: as we all know, it’s easier discussing problems with somebody you know than somebody you don’t.”
At Foxtons, the fleet department also has a crucial role to play in keeping its sales staff motivated.
“We rotate our cars between users so we run it more like a rental fleet than a typical company car fleet,” says Needham. “This means we have to have a return to base policy to keep the car safe, and you need a facility that can basically bring the cars back up to a retail refurb standard to give that car to the next person.
“You don’t want to demotivate sales guys in any way, shape or form and everyone gets revved up about having a new car, but they are not always going to get a new car.
“However, if that car can be as good or better than when it left the showroom originally, then they’re happy.
“If you demotivate them, they won’t hit the next sales target and the company won’t be successful. So it’s all about understanding what makes the company tick.
“We hold our staff’s hands through car choice, advice, collision management, etc. We understand the staff. Vehicle matters always comes back to us, so there are no distractions for our sales staff.”
The personal contact also makes drivers feel more valued, and this has a knock-on effect to the way they treat their vehicles.
“By making sure their concerns are heard, the crews feel valued and engaged,” says Michael Duda, fleet manager for Medical Services.
“This helps maintain the fleet and they tend to look after the company resources and equipment as if they are their own.
“This culture of engagement is very important to help prevent breakdowns and incidents.”
The ability of an in-house fleet manager to engage with employees can also be important when it comes to acquiring the right vehicles for both the business and the driver.
“When I started I spoke to as many drivers as possible to identify basic requirements,” says Davies. “Everyone south of Cheshire wanted air-conditioning and everyone to the north wanted temperature gauges to check how cold it was.”
He adds: “Every driver has my mobile number and I regularly go to team meetings to talk to drivers about the issues in their area.”
Keeping fleet operations in-house enables a company to get better deals with suppliers, says Needham. This may not always be about price, but getting the back office support a company needs.
“We’ve built up a relationship with Kwik Fit and our local tyre fitters and they all know how we operate,” he adds.
“They know we have a brand match policy, we have an axle match policy, they know we change at 3mm, so we don’t have these arguments ‘oh you’ve got a couple of millimetres left, send that guy back in 1,000 miles’, which is what you get from a fleet management company because it’s budget-led.
“That would mean our employee is off the road again, which means they’re not selling a house and it’s all about that old sales ethos, that one extra sale makes the company.
“If every branch made one extra sale, your profits go through the roof. But if they’re sat waiting for a car to have new tyres fitted, they are not doing that.
“Because we have those relationships, they know which tyre sizes to stock because we have a lot of the same cars.”
He says employing an in-house fleet manager also gives a company control over the fleet suppliers it uses, and ensures that the companies used are working for the benefit of the fleet and not the fleet management company.
“A third party will change things because they have to,” says Needham. “They may change a breakdown supplier from The AA to the RAC, but that has a knock-on effect to people who don’t understand what to do in the event of a breakdown.
“Whereas if you are owning that change and you are changing for the right reasons , you can pre-empt it; it’s not just done overnight.”
Having an internal fleet manager allows a company to remain focused on upcoming contract renewals, with, for example, the fleet department at Wates Group working with its project teams so it knows exactly what agreements are expiring six months in advance.
“Fleet management is a challenging job and you must know the marketplace and suppliers,” says Ted Sakyi, group fleet manager at Wates.
Understanding their company culture and having personal contact with drivers, fleet managers are well-placed to gain buy-in for new initiatives.
At Wates, Sakyi was brought it to centralise the fleet function and improve efficiencies: before his appointment the construction company had seen its fleet of around 1,000 vans, 300 cars and 1,300 cash allowance drivers develop piecemeal as the business expanded.
There was no national co-ordination so across different offices some vehicles were bought and others leased, there was a mix of providers and brands on the van fleet, and operatives were speccing their own vehicles.
“The biggest challenge is always the management of change from a people perspective, so I have been engaging with employees at all levels, from the board to operatives on the frontline,” he says.
“Having explained the need for change and the reasons behind the initiatives, they fully understand.
“It is for the operatives’ benefit in terms of improvement in safety, comfort and drivability, and of benefit to the business in terms of cost management and reputation.”