Fleet News

In the spotlight: Fleet Logistics

Fleets which remain wedded to a fully-bundled sole-supply partnership for their funding requirements are missing out on substantial savings offered by adopting a multi-bidding approach.

Differences in leasing prices can be as much as 30% per vehicle, while the average spread has risen since 2008 from 8% to 12%, according to figures analysed by fleet management company Fleet Logistics.

In addition, de-bundling core services such as rental and maintenance can bring further savings.

There’s a sense of “fleet management company says fleets can save money by outsourcing to fleet management companies” in all this.

"Nevertheless, Fleet Logistics chief regional officer – Europe North Stuart Donnelly firmly believes the fleet sector will increasingly seek tailored solutions with no one size fitting all.

And he claims one of those solutions to which companies with three-figure fleets are turning is multi-bidding leasing contracts.

“There is a wide disparity between leasing prices. Fleets are no longer able to get best value by working with one leasing company,” Donnelly says. “Our model creates competition, typically of three leasing companies, which will reduce a fleet’s total cost of ownership by 12%.”

Funding is not the only component of a multi-supply strategy: accident management, rental, fuel cards, telematics, logistics, glass and maintenance management all benefit from open competition in terms of price and service.

Opt to deal with one leasing provider on an ‘all-in’ contract and you are tied to their third-party supply partner, which might not be appropriate for your fleet.

“In the past, a single leasing company gave ease of administration – one supply chain, one point of contact for drivers, etc.,” says Donnelly.

“That takes away the hassle but the cost is not the lowest. Now the driver for change is reducing headcount, cutting cost and creating value for the business.

“Companies are recognising that a one-size-fits-all philosophy might remove complexity but it loses sharpness of pricing competition, control of cost and the ability to choose the right third-party suppliers.”

However, Donnelly accepts that this approach to fleet management brings complexity to the business.

“They have to weigh that up versus the value,” he adds.

Fleet Logistics is one of a growing proliferation of fleet management companies promising to reduce fleet overheads by handling key elements of their operations.

Certainly fleets are taking notice, particularly those with larger volumes of vehicle.

Pharmaceutical companies are in the vanguard of this new supply chain strategy which they are combining with more intelligent funding channels most appropriate for their business, such as cross-border leasing, finance lease, outright purchase or contract hire.

This approach is best suited to large fleets and cash-rich organisations.

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