Fleet News

DHL in search for global contracts to reduce costs

COURIER giant DHL hopes to achieve substantial cost savings by appointing just two manufacturers to supply commercial vehicles for its 10,000-strong fleet.

Currently, three manufacturers are on DHL's shortlist, from an initial list of five. The company revealed its future fleet plans to Fleet News Europe two months after we reported it had signed an international leasing arrangement with Lease Plan.

The memorandum of understanding covers Europe and Africa, but DHL will also introduce Lease Plan to its other operations in other regions of the world.

The vehicle manufacturers in discussion with DHL executives are Ford, Mercedes and Renault. All currently supply the company's fleet along with Volkswagen and Fiat.

Nigel Ward, project manager for DHL's fleet steering group FleetMaster, said: 'We're about to start testing the smart and Th!nk for city work. Both have zero or low emissions and we consider that important because we treat environmental issues importantly. We don't want smelly old diesel vans driving around big cities.

'We are constantly looking at how we can harmonise our worldwide fleets to achieve real cost savings. Even if we get just two countries working together then savings can be made. Other areas include company software and fuel.'

He added that discussions were at an early stage, and that his steering group was still in dialogue with local fleet operations.

'Some countries already have an independent fuel deal and in Germany in particular I don't think we could better that. However, both the Netherlands and Belgium independently use Shell for fuel but we have yet to sit down together and talk to Shell about prices.'

Ward said DHL had already met barriers when attempting to put together a package which would benefit its entire Europe and Africa fleet.

'One of the difficulties in arranging a solus deal is that while one fuel supplier has a high presence in one country, it may not in another. There's no point signing a big deal with Shell or BP if they only have five stations in one of our countries for instance; that wouldn't be any good for us. It's the same with tyres - it's down to availability in all regions,' he said.

Ward added that DHL had selected Lease Plan for its international leasing arrangement because Lease Plan already had a system in place to manage vehicles in DHL's Europe and Africa division. Competitors, he added, were simply 'promising' to introduce them.

Although he is pleased with the company's relationship with Lease Plan so far, he admits he was anticipating greater savings, and hopes the bulk acquisition of vehicles will reap bigger rewards.

'We now realise that leasing companies' margins are tight,' he said. 'We are making savings but they are not as big as we had expected. We expect to make real savings with the manufacturers.'

Ward stressed that DHL had signed a memorandum of understanding with Lease Plan and not a global contract. He said the agreement allowed DHL to regularly 'market test' Lease Plan to ensure DHL was receiving the best service.

'We have an umbrella agreement with Lease Plan which means we will introduce it to other countries. In Australia and New Zealand it has been successful. We involved all countries in the Europe and Africa division from the start and Lease Plan had to visit those countries to convince managers they could do the job. If one country thought Lease Plan wasn't up to the job, the whole agreement would have failed. Right from the start though, each country was happy to use Lease Plan,' he added.

When sourcing vehicles, DHL believes it is equally important for couriers to be happy with their vans as staff are with their company cars.

'There is a standard specification we require. The courier van is the driver's office and it's important they have the right ergonomic environment. Obviously there are certain local differences that need to be taken into account,' said Ward.

'Couriers care what vehicle they drive. If you offer them a Cinquecento or a Mercedes, then they'll go for the Mercedes.'

He admits he has a battle on his hands when selecting just two van manufacturers, with national preferences to be taken into account. This will place the onus on manufacturers to convince DHL that their offer is the right one for the business, and will include negotiations to livery vehicles in DHL colours at the production stage.

'If we think it's a good deal then we'll tell local fleet managers that by ordering a certain amount of vehicles we'll be saving a certain amount of money,' said Ward.

'They will be encouraged to think about what makes the best business sense as they are the people signing the cheque. Perhaps we'll have to forget nationalistic issues, but be sensitive at the same time. For example, our German fleet has an excellent relationship with Volkswagen, so perhaps it should retain some VWs on its fleet.

'It's harder with passenger cars and if it makes sense for an individual country to opt out then perhaps it should do so. We don't want to lose the whole of the senior management team in Portugal because we chose an unpopular manufacturer. We're not looking for one or two suppliers of passenger vehicles yet. However, if one manufacturer offers a good enough deal then it's worth thinking about.'

DHL is keen for a mix of brands on its fleet by sourcing vehicles from major manufacturers that own other car makers. For instance, a deal with Ford could include Volvo and Mazda product.

The company also plans to rationalise the role of its fleet managers in different countries. Currently, some work full-time and others act as part-time co-ordinators. 'We would like to see one person being responsible for the fleet in his or her own country. They will provide us with information such as trends in the local market and fleet data such as accidents, which is a key issue for us because it means a vehicle off the road,' said Ward.

DHL plans to bring its fleet managers together by holding a conference in July for representatives from about 20 of its top countries.

'It's a case of let's talk fleet,' Ward said. 'It will also be a chance for people to meet each other - many for the first time. The person responsible for fleet in Spain probably doesn't know his French counterpart. It will provide an opportunity to share ideas. One country may be going through problems another has experienced and solved. I'm sure it will be a useful experience and it will be held here in Brussels.'

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