Fleet News

In the spotlight: BT Fleet

BT Fleet sits with a foot in two camps.

Owned by BT and manager of its in-house fleet, principally under the Openreach brand, the company also runs the fleets for a number of external companies.

It puts the organisation in a unique position to spread best practice learning.

New initiatives introduced to Openreach, for example, can be rolled out to customers once their success has been established.

A no-brainer, you might think; however BT Fleet has only recently started to fully exploit it.

Part of the issue was an historical detachment from BT Openreach. Until this year, the relationship mirrored that of BT Fleet’s external customers – effectively an arm’s length trading relationship that saw Openreach dictating which vehicles it wanted and how long it wanted to keep them.

The only noticeable difference at that point between Openreach and BT Fleet’s external customers was funding – BT Fleet funds Openreach’s 33,156 vehicles (26,756 vans, 6,400 cars) on a leasing agreement while the 33,000 vehicles operated by external clients are on a fleet management contract only.

The relationship between BT Fleet and BT changed this year. New BT Fleet managing director David Bowen recognised that the parent company was missing out on significant savings by not exploiting his team’s knowledge and expertise.

He persuaded the bosses to hand over responsibility in a number of key areas.

“We have taken more responsibility for key decisions – we are telling them which vehicles they will have,” Bowen says. “We showed BT that we can run the fleet better than them by increasing utilisation and reducing fleet volumes.”

Come the end of the year, the Openreach fleet will have shrank by around 3,500 vehicles – 2,000 by removing under-utilised vehicles, 1,500 through a natural reduction in headcount.

Further cuts in fleet size are likely next year. And that potentially puts BT Fleet in a quandary. With a fleet management team of 225, plus another 525 mechanics at its network of 62 workshops, any reduction in fleet size could put jobs at risk.

“BT’s volumes are falling due to the efficiencies while our external fleet is flat – that’s not sustainable,” Bowen says.

His answer is to grow the external business by reinvesting some of the savings made in the Openreach fleet on sales and marketing initiatives.

The company will also look for the first time at cross-selling opportunities with BT’s 1.5 million business customers, which range from multi-nationals to SMEs.

“We’ve never worked with the telecoms account managers to try to sell through into the fleet space,” Bowen says. “But there’s a huge opportunity there.”

He is targeting revenue growth of £20 million over the next two financial years, taking turnover to £75m. To achieve this, the external fleet will need to grow by around 20,000 vehicles.

The mid-segment – fleets with typically 250-750 vehicles – is the main hunting ground.

And this is where the best practice opportunity really starts to take effect.

“We plan to industrialise what we currently have, for example our accident management business, by taking the things that we do for BT to the market,” he says.

“There hasn’t been a huge amount of cross sharing with our external fleets. We’re at the start of the journey.”
 

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Comments

  • tosh - 28/01/2014 19:30

    BT Fleet are living in cloud cuckoo land if they think you can pool vans in open reach. Most engineers work from home, they all have their own tools onboard and there is no way an engineer will strip his tools off every time he has a day off.

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