Fleet News

Fleet200 roundtable views

Six roundtables took place at the Fleet200 meeting held in September at the Vinyard Hotel in Berkshire. The summaries of all the debates are below.

 

Driver Safety

The roundtable discussion focusing on driver safety covered the following areas:

1. Key priorities - Assess

  • Online assessments to ensure all new starters are ‘fit for purpose’ (red, amber, green, process dictates the recommendation and action). Repeat process every two years.
  • Pre-authorised driver training budget to invest on drivers where there is a potential issue based on the assessment.
  • Permit to drive issued to all drivers, if driver fails to adhere to the policy or does not meet the criteria they are exited from the company car/van scheme. (review every 2/3 years)
  • Grey fleet drivers - establish the use of the journey and check that the car is appropriate, where it is a perk car driver doing infrequent business trips consider rental car or public transport (line manager involvement to assist in the decision)

2. Reporting measures

  • Internal benchmarking on driver incidents and collisions- by division, department or locations to encourage accountability of the issues.
  • Compare data with external fleets with common operating issues- share best practice.
  • Cultural challenges and actions
  • Changing the mind-set of the driver.
  • Issuing permit to drive to spouse.
  • Leadership on safety issues from the top
  • Recharging at fault claims.
  • Revising Vehicle choice list (NCAP)

 

Fuel Cost Discussion

The key question discussed by this roundtable included the following:

1. What impact will rising fuel costs have on your business?

  1. Use better ways of communicating
  2. Expect to see restrictions on travel
  3. Question - is your journey really necessary?
  4. Still not using teleconferencing to its full
  5. Pass costs on – small regular increases rather than sudden shock
  6. Not likely to lead to job losses

2. What actions can you take to reduce the impact

  • Insist on supermarket fuel rather than branded – one company achieved 95% utilisation of supermarket fuel
  • Don’t allow super unleaded or diesel – not convinced of fuel savings
  • Telematics deployed – early savings “low hanging fruit”
  • Highlight “whole life cost” of vehicles including fuel economy CO2.
  • Introduce high mileage penalties
  • Monitor driver behaviour
  • Reduce vehicle selection options (only low CO2 values)

3. What obstacles are in your way?

  • Still some resistance to big brother particularly by HR teams
  • Resistance to changes in car policy – again HR!
  • Lack of joined up company thinking – fleet/HR/Ops/ Purchasing
  • Benefit in kind rules on vans unclear advice from HMRC –
  • Van drivers penalised
  • No real alternative to petrol and diesel

 

Supplier Management discussion

1. Difficulties in supplier management

  • Suppliers when merging or restructuring become internally focused
  • Changes of account managers without reference to client – even after the event.
  • Inaccuracy of MI – or late delivery
  • Complacency on both sides
  • Challenges with shifting suppliers – lots of work for little gain

2. Tools we can use

  • Introduce real or perceived competition – keep talking to ex-suppliers and “runners up from your selection process” Test whether you are getting value for money
  • Quarterly strategic reviews – are they interested in working with us going forward.

 

Tendering for vehicles

1. Reasons to Tender:

  • Business Needs – such as management change, new need e.g. recruitment drive
  • Legislation – have to tender on orders over a certain monetary value, which may also result in European tender
  • Replacement Cycle – a volume of cars nearing end of contract

2. How do you balance price versus service versus value for money?

Shift in last five years – total cost of ownership is now bigger consideration
How often do you tender? How many companies do you shortlist for tender?

  • Each company tenders every three years for vehicles
  • Number on short list varies dependent on response to criteria
  • Generally send criteria to all manufacturers – and response will vary depending on car/van type required

3. Have your demands/requirements changed in recent years – if so how?

  • Increased emphasis on;
  1. Safety
  2. Environment
  3. Volume (down)
  4. Taxation
  •  Acceptance of choice list

4. How well do suppliers respond to tenders?

  • Generally very well, and improving (probably because more frequent and procurement driven)
  • Manufacturer viewpoint – there is quite a big variation in the tenders they receive, from quality and volume of information provided
  • Pan European tenders are increasing – and response/ability to handle these is improving

5. Who gets involved internally in the tender process? How does this influence the weighting put against key criteria?

  • The weighting is towards Finance
  • Different groups depending on Cars/Commercial
  • Commercial tends to be smaller decision making units – due to ‘fit for purpose’ element

6. What service level agreements and KPIs do you have in place to monitor service levels?

  • Servicing
  • Downtime/time off road
  • Lead times on new vehicles

7. Common Themes:

  1. Movement to total cost of ownership, as opposed to the historic acquisition costs. The end aim is the cheapest cost of vehicle taking into account the following – safety, environment and availability (the emphasis of the three will vary depending on whether it is a car or van)
  2. There has been a movement towards a procurement focused fleet, which makes tendering more acceptable

 

Replacement cycles

  • Moves to extend replacement cycles were driven by a need for businesses to reduce cost. Staff and union buy-in possibly less difficult than expected, as during times of austerity when companies are considering reducing headcount they realise saving money means more jobs are protected.
  • Has been enabled by better quality vehicles. Suggested that a car at five years/100,000 miles is of comparable quality and condition to one at three years/60,000 miles from 10 years ago.
  • SMR concerns. Tyres are a major component of SMR cost so increased cost of replacing components on older vehicles is perhaps not as significant. Also, maintenance cost usually peaks at about four or five years when more costly components need replacing, which are then good for several more years. Maintenance costs then reduce again for the remainder of fleet lifecycle. Breakdowns aren’t necessarily more common on older vehicles than younger vehicles.
  • Driver behaviour. Can be managed effectively through telematics (harsh manoeuvres, etc.) and other methods (training/monitoring), to help ensure vehicles last longer.

 

Grey fleet

Fleets are being driven to take action on their grey fleets with one key reason in mind – safety. All fleets discussing the topic at the Fleet200 roundtable agreed this was the primary concern, although cost was also a factor.

However, the degree to which fleets attempt to control their grey fleet drivers varies enormously. There is even disagreement over what is a grey fleet – for some it is only those who take a cash alternative to a company car; others also include anyone who drives their own car on business, whether or not it is funded in some way by the company.

Most fleets said they included the grey fleet within their company car fleet safety programmes, although one fleet takes measures that are more stringent than those imposed on its company car drivers.

These include imposing a maximum age of seven years for cars, travelling fewer than 10,000 business miles a year, and annual checks for MOT, driving licence, business insurance and servicing (although staff can sign a disclaimer to say they regularly service their car).

Drivers must comply with all measures in order to be granted a driving permit – a new one is issued every year. If they fail any area they are not allowed to drive on business.

“We are trying to make it as onerous as possible to try to reduce or get rid of the grey fleet,” said the fleet manager. “The risk is that it goes underground for the low mileage ones. But then they fall outside of our policy because they are deliberately not complying with the rules. This is reasonable and practicable action on our behalf.”

Several fleets believe driving permits is the solution to the grey fleet issue – and they all agreed that it was, to a greater or lesser extent, an issue – whether safety or cost related.

Those that did not operate a permit scheme said the line manager had sign off for business mileage in private vehicles.

However, one fleet manager commented: “How far do you go before the actions taken are unreasonable. They have driving licences – we have to trust them to follow their obligations regarding the law of the land.”

There were concerns about the need for constant re-education of senior management whenever there was a change of director about the reasons for taking action on the grey fleet. Fleets agreed that the buy-in of senior and middle management was key.

The issue is that the grey fleet is just that – a grey area. It falls between everyone – finance, HR, fleet – which means there is a risk that no-one will take responsibility.

Other blockages include access to data, particularly expenses data which shows who is claiming for business fuel. Again, management buy in is crucial.

All the fleets offered cash as an alternative to the company car (although essential users were precluded by some), but there were differences in how those allowance levels were set.

One fleet based the allowance against the cost of offering a company car to keep the cost neutral for the employee and the company.

Another kept the cash offered deliberately low to encourage staff to take the company car instead.

“We use a total cost of ownership model of the lease vehicle and give a cash equivalent,” said the fleet manager. “However, the car they can get with the money on PCP or personal lease - that is if they can even get one with the restrictions on funding – will be two bands down from the car they could have on the company car scheme. It is a deterrent for some.”

All fleets only offered cash takers the Advisory Fuel Rate for fuel reimbursement rather than the more generous AMAP.

As to the single most effective initiative they had introduced, one fleet said it was implementing a rule that said grey fleet drivers had to sign a policy to say they had read and understood all their legal and safety responsibilities.

Another said it was the move to pull together all of the elements of the grey fleet programme in one place online, including signing the policy, rules and responsibilities and a library of help sheets.

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