Why cameras are a benefit, not a burden

SPEED cameras are playing a key role in helping cut the massive annual financial toll that road accidents inflict on British industry and fleets should see them as a benefit, not a burden.

But it is still essential to step up efforts to educate high-mileage car users and staff at delivery and haulage companies about the dangers of excessive speed, said National Safety Camera Liaison communications manager Susan Beck.

Speaking at the conference, Beck said the fact that one-third of road casualties were work-related indicated that some road users faced a higher risk of being involved in accidents.

She said: ‘That’s why staff at delivery and haulage companies, fleet and logistics managers and public sector personnel are included in the groups of people we are targeting along with the young and novice drivers.

‘We feel there is an urgent need to change the work culture toward speeding – and there has never been a better time to introduce road risk policies. Are your managers and senior directors aware of the need to change the culture in companies?’

Beck warned against complacency as a result of statistics that show UK roads to be the safest in Europe and said fatal and serious crashes during working time contributed to the £2.7 billion annual cost of workplace casualties to employers.

She added: ‘Not all accidents are caused by speeding, of course, but a significant number of them are, and there is no doubt that speed often represents the difference between surviving a crash and not surviving. Deliberate speed leads to catastrophic results, so the message has to be that speed limits matter, they are there to protect us, and they are also the law.’

She said publicity campaigns, enforcement activities and the high visibility of cameras would help meet the Government target for a 40% cut in deaths and serious injuries on the roads by 2010.

Beck added: ‘There is no quick fix and we have a long way to go, but we want to challenge bad driving and significant resources are being invested in changing the habits and behaviour of drivers.

‘The speed camera scheme is all about road safety, and businesses should realise that speed can seriously affect any company’s bottom line.’

Car misuse leaves residuals in tatters

AN end-of-contract company car was written off because a dog chewed through the rear seat belts, eaten the back of the rear seats and left the carpet in shreds.

Other examples of company car misuse given at the Hit For Six conference included one man who used his company car’s towbar to pull out tree stumps and another who allowed his children to get in and out of the car through the sunroof.

These examples were given by Association of Car Fleet Operators chairman Tony Leigh who said residual values are dramatically affected by the state of car for sale.

He said that fleets could be losing hundreds of pounds per car at the end of life through unacceptable wear and tear.

Not only do poorly maintained cars cost a company money at the end of their working life, but they can also affect a company’s image in front of customers, Leigh told delegates.

He said the difference between a Mondeo 2.0-litre Zetec fetching CAP clean and CAP average after three years/60,000 miles was £425.

For a company that has breached a fair wear and tear agreement with its leasing company and been charged £250 per vehicle, the total cost for 100 of its cars would be £25,000.

Leigh said: ‘This is not an insignificant amount. You would not want to have to explain to the finance manager why your budget has exceeded expectations.’

On corporate image Leigh said: ‘The company car is the most outward, highly visible image of the company, its products and staff. Often the state of the car is allied to poor work standards. The same person with a poorly looked-after car probably moans about the company and is bad at timekeeping.’

Fleets are urged to produce an in-house car users’ manual that sets out what is expected of the driver and what will happen if these standards are not met.

Leigh said: ‘You may deduct money from them for negligent abuse or reward them with a small gift if they look after the car.’

It is also vital that fleets agree fair wear and tear with their suppliers at the beginning of the contract, delegates heard.

Drivers should report ALL incidents

COMPANY car drivers should be encouraged to report every incident involving their car no matter how trivial they may seem, delegates were told.

Fleets should also work in partnership with their insurance company and risk management provider to identity ‘hotspots’ where accidents happen most often, such as reversing, or at junctions.

Jack Brownhill, director of motors at Groupama Insurances said: ‘It may be your company has meetings that finish at 5.30pm on a Friday and drivers are having accidents because they are rushing to get home.’

He said fleets need to seek professional advice to work out the insurance cover most suitable for them and put in place measures to make the process run smoothly and efficiently.

These include carrying out checks on whether employees are suitable to drive and have the correct documentation, ensuring their security and safety, for example making sure they do not drive excessive hours, and introducing risk management policies.

Commenting on whether fleets should report every incident, however minor, ACFO chairman Tony Leigh said he knew of one example where a claim for £8,000 was awarded for what was initially described as a ‘minor incident’.

Fuel prices all set to rocket as demand for diesel in US grows

DIESEL prices could soon rocket in price to 45p per gallon more than petrol because growing demand in the US will restrict supplies across Europe, an energy expert has warned.

The gloomy prospect of motorists having to pay an extra 10p per litre at the pumps might arrive in as little as three years’ time, predicted Energy Saving Trust transport and energy programmes head Colin Matthews.

He said: ‘I am concerned about the recent significant growth in the number of diesel-powered vehicles in Europe, because the US is starting to take a close look at the potential of this fuel as an answer to the problem it has with its sport utility vehicles.

‘The result of that could present a problem for us because we bring diesel in from America, and as demand rises over there, the price of this fuel will go up by 10p per litre in three years’ time. I wonder if the public will want to buy high-mileage, second-hand diesel cars when that happens?’ Matthews said he was at a loss to understand why the fleet industry had not shown greater interest in LPG as a viable alternative to petrol or diesel.

He said: ‘This year, the price of petrol has risen by 6p per litre. Conversely, LPG has gone up by 1p per litre over petrol but remains at less than 40p per litre from some suppliers. Apart from the pricing, there are other obvious and significant advantages. LPG engines are 20 times cleaner than equivalent diesel engines and have good CO2 figures. I can’t understand why this fuel hasn’t caught on.’

He also urged delegates to consider hybrid vehicles, saying: ‘Look out for these – they will come to market at a rapid pace because the technology allows a petrol vehicle to produce the same kind of economy as diesel.’

Training is vital to trim fleet costs

BETTER training has helped one of the Government’s biggest vehicle fleets trim its overheads by more than £1million during the past 12 months.

A package of improvements has allowed the HM Customs and Excise fleet to operate at substantially lower cost to the taxpayer, revealed national fleet manager John Webb.

He said: ‘We’ve done it through more effective control management, cutting running costs by £300,000 and spending £150,000 less on fuel.

‘We have also reduced overall staff, improved the services we get from our suppliers and achieved higher residual values on vehicles.’

The man who steered his department to win the Fleet News UK Fleet of the Year Award for 2004 said it was vital to identify training needs and ensure all staff had plans for personal development.

He added: ‘Training is a cyclical process that needs to be continually developed. Our aim is to have all central staff trained up to Institute of Car Fleet Management (ICFM) certificate level.

‘I’ve taken it and I’m now working toward taking my diploma next year. I’ve taken the team through a big change process and training has certainly worked for us.

‘It was not without pain – we had a few square pegs in round holds – but there have been big benefits. Experience is something you normally get when you make a mistake, but one of the best control measures is training.’

Fuel cards are a ‘must-have’

INTRODUCING fuel cards would allow most businesses to save money on fleet management, claimed Arval PHH strategic fuel manager Roger Bazley.

Driver training linked with an increase in fleet efficiency and more sophisticated monitoring of maintenance could reduce fuel bills by 10%, he told delegates at the conference.

Delegates were told: ‘Fuel is the second highest cost in running a fleet, and our research shows that companies making the switch to cards benefit from a reduction in administration work and also achieve an increase in control.

‘We believe they are a must-have for every company – even those having only two cards will see an improvement.’

Staff won over by telematics

SERVICE engineers suspected their bosses of using ‘big brother’ tactics when they discovered a telematics system was being introduced in their vehicles.

But after being shown the benefits, drivers were won over and the equipment has been such a success that the idea is now being adopted elsewhere in the fleet, the conference heard.

EMCOR Group special projects works manager Steve Daynes told delegates: ‘Bringing telematics into operation did prove to have its problems.

‘Staff clearly felt that our ability to track their movements was like having a manager sitting alongside them in the vehicle as they went about their work.

‘Happily, they accepted that it was for their own benefit and that it would make a positive contribution to their working safety.

‘But we resolved the issues they raised through negotiation and consultations – and we also guaranteed this was not to be a ‘big brother’ tool.’

Daynes said management at Manchester-based EMCOR Drake and Skull had found ‘very few’ instances of tampering with the telematics equipment provided by Cybit for company engineers, who are responsible for carrying out essential safety checks on gas appliances at 250,000 council homes in the north west.

He added: ‘Because our clients are local authorities, it is essential that we can provide them with proof that our engineers have made visits to their properties, and the system makes this possible.

‘And because we never know what type of person will meet the engineers as they go about their business, the fact that we know the location of each vehicle makes it easier for us to cater for their safety.

‘We opted for telematics because we wanted to increase efficiency and lower our costs. We have achieved a £40,000 saving in overtime and call-out payments and have passed this on to our customers.’

Diesel to be biggest fleet fuel?

UP to 60% of tax-paying company car drivers could be in diesel vehicles by next year, according to an Inland Revenue expert.

Carolyn Howes, policy adviser for the Inland Revenue, revealed to delegates at the conference that the high-profile switch to diesel had already reached 40% to 45%.

She said the switch was in part a result of the tax changes introduced in 2002 which saw vehicles taxed on their carbon dioxide emissions.

Currently, the best vehicle to choose to guarantee low CO2 emissions and therefore a low tax bill is a diesel.

For example, it is possible to buy a new upper-medium model and still only be charged tax at the lowest rate of 15% just by choosing the latest diesel option.

But despite this, Howes revealed that the environmental message behind the new tax system was not getting through to drivers.

Only 20% of those surveyed knew the CO2 emission levels of their car. She told delegates: ‘Some drivers thought they were worse off compared to the old system when in fact they were the same or they were better off.

‘People need to understand how the change works when they make the choice. The potential environmental benefits from the new tax won’t work if the system is not understood.

‘Employees will be asking the fleet manager, so you have an important role to play in making sure the tax system achieves its environmental benefits.’

Latest figures show the system has achieved significant savings, with a cut of about 0.2 million tones of carbon in 2003, equivalent to 0.5% of all CO2 emissions from road transport.

Furthermore, there has been a reduction of about 400 million business miles.

Howes added: ‘The reform has been effective, encouraging some 59% of employers who provide company cars to change their fleet policy to take account of CO2 emissions and more drivers to downsize or choose cars with lower emissions.’

Review for tax rules on cleaner fuels

AN ongoing review of the company car tax system could lead to taxation for alternative fuel vehicles being simplified to drive up demand.

The measure comes under five key areas being examined as part of the review, which could bring changes that affect fleet managers.

Carolyn Howes, policy adviser for the Inland Revenue, said a key area to be looked at would be drivers’ and employers’ awareness of the system and how it influenced their choices.

Also under the spotlight would be further investigation of the benefits of the current system in terms of CO2 emissions and the impact of fuel choice on local air quality.

Another key issue will be how the system is influencing take-up of alternative fuels. Currently, LPG drivers are offered a 1% BIK discount, plus a further 1% for every 20g/km the vehicle emissions are below the minimum 15% threshold.

Howes said: ‘Our research shows these discounts have not encouraged any significant increase in the use of alternative fuels in company car fleets, with about 1% still running on fuels other than petrol or diesel.’

Although research showed 13% of drivers would be willing to move to LPG and 29% of firms would consider the fuel, it may take an incentive to change.

Howes said: ‘We will be looking at options for simplifying the discount for LPG to provide a better incentive to choose LPG-powered cars.’

The Inland Revenue will also be looking at the extent to which the tax system is influencing opt-outs, as figures have shown there are now 250,000 fewer company car drivers since the new system came into effect.

This is expected to include a look at the effect of Approved Mileage Allowance Payments, which drivers on business in private cars up to 40p a mile for the first 10,000 miles and 25p a mile thereafter, free of tax and National Insurance.

Key areas for review

Stop following the fleet herd, says tax specialist

MANY companies need to start with a blank sheet of paper when reviewing their fleets and stop simply following the herd, the conference was told.

In implementing any fleet review, companies must focus on what their business needs and not worry about what other firms in the industry might be doing, according to Alison Chapman, tax partner with Deloitte.

Prejudiced ideas can simply blinker employers and lead to them making a choice that is not the best one for the business.

They also need to separate vehicle decisions from a choice of whether to offer free fuel for private mileage.

Furthermore, simply having one fleet policy might not be the best option. Instead a firm might need to segment its fleet and have a variety of funding and vehicles policies depending on different parts of the business.

She said: ‘The chances are high that there is more than one option that would suit your fleet. Look at what your company needs to achieve, and consider the impact of what you are doing on your employees.’

When carrying out a financial analysis of the potential choices, firms need to consider issues of whether they are aiming for changes to be revenue neutral for drivers, or have shared costs.

They also need to be aware of the potential impact of tax rates, residual values, mileage and include a margin for error.

By taking a blank sheet of paper approach, a company might introduce new ideas to staff, such as offering two lower-medium cars instead of just one executive model. Finally, when implementing a new company vehicle programme, communication with staff is vital.

Chapman said: ‘People historically don’t trust their employers, so communication is the key. Employees must understand what you are trying to do.’

Track day winners

SIX lucky fleet executives at the Hit for Six conference won a day on a performance driving course in an RX-8 with experts Prodrive. They were: Tony Scott, operations director, National Veterinary Services; John Jennings, director of EPL Access; Kevin Edwards, head of motor underwriting, Norwich Union Insurance; Sally Baker, bank car knowledge leader, Barclays Bank; Jeremy Crofts, fleet manager, Welcome Break; Andrew Hall, fleet administrator, Welcome Break.

Sponsors

Hit for Six was sponsored by Mazda. Session sponsors were:

Exhibitors were: