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Fleet News Industry Conference
Politicians set out their stall for fleets
Newsreader Huw Edwards hosted the annual Fleet News Industry Conference, at which UK suppliers debated how the future would affect the way they serve customers, helped by presentations from a range of experts, fleet decision-makers and the Transport Minister.
Risk management and the environment - the key to the future
TRANSPORT Minister David Jamieson has said the Government would press the European Commission for tougher diesel particulates legislation over the next six years.
Speaking at the Fleet News Industry Conference, Jamieson said diesel sales had increased considerably since the introduction of CO2-base company car tax in 2002.
He said: ‘Diesel has an impact on air quality and we will press for major reductions in diesel particulates by 2010.’
Jamieson told delegates that he expected most vehicles to run on hydrogen within the next 40 years and that it would not be right for the Government to ‘do nothing’ in the mid-term with regards to promoting low carbon transport.
He also spoke about road safety saying the UK was seen as the world leader in this area.
‘We certainly have no room for complacency as many of our vehicles end up as scrap metal. The Transport Research Laboratory has concluded that company car drivers have about a 50% greater accident risk than other drivers. A third of all accidents involve someone at work.
‘I know that some companies take health and safety seriously but there are still some that don’t take it as seriously once employees leave the factory gate and go onto the road.’
Jamieson said the Government was committed to promoting ‘greener and cleaner’ cars to fleets which can boost a company’s image.
‘We are trying to get the right signals to fleet buyers. Buying a cleaner, greener fleet of cars is good for the environment and the bottom line,’ he said. He added that the Government takes its commitment to reducing the effect vehicle emissions have on the environment seriously.
He said: ‘We have made progress but we have to make better progress. The average new car is now 10% more efficient than it was in 1995 but we really need to go further.’
Fewer speed cameras - more traffic police on the beat
R OAD safety education is paramount for a successful transport policy to be maintained, delegates were told.
This view was shared at the Fleet News Industry Conference by Shadow Minister for Roads and Traffic, Chris Chope, OBE, who believes the Government should do more to promote road safety, including launching new hard-hitting television campaigns highlighting the issue.
Chope told delegates that the Conservative Party’s aim was to invest in the highway network, plug taxes back into the road infrastructure and promote the road safety message.
Outlining some of the party’s current transport aims, he said: ‘With safety cameras, money is taken in fines but the Government does not invest the money in safety education.
‘No-one can be complacent – we need more emphasis on road safety education.
‘At the moment there are lots of schemes which have been approved but have no funding. For example, in the West Country we need two main corridors into the south west and at the moment there is only one. We have committed to building a second link into the West Country.’
Chope said that if returned in the election currently expected in May, the Conservative Party would try to bring more traffic police back on to the roads.
He said: ‘To ignore the issue of capacity is absolute folly. We need more police patrolling the roads. We are a long way away from any consensus, but the issue is the number of cars on UK roads will increase.’
Chope claimed that under the Labour Government, the number of off-street parking spaces was steadily declining.
He said: ‘The issue is that the number of cars on UK roads will increase but the Government wants to reduce off street car parking.
‘In reality people will find somewhere else to park their cars. We need to have more off-street car parking.’
Fuel: the choices ahead
Fuel Choice for Fleets – What is the Future? That was the big question facing panel members at the Fleet News Industry Conference – and this was how they responded
Richard Tarboton, head of TransportEnergy, Energy Saving Trust
‘THE fact that the 10 hottest years in recorded history have happened in the last 40 years shows that climate change is a real issue. And CO2 is our primary concern because eight million people in the UK suffer from respiratory diseases as a result of exhaust emissions.
‘We think incentives to promote the use of cleaner fuels cannot be technical, complex and hard to understand. Another issue is that they need to be technology-neutral – the industry is our partner in this: it will find the best solutions and it is up to us to support these.
‘The other key point is the long-term element. It is no good having an incentive scheme that is under threat or will change on a yearly basis. We need to move toward something that is longer term and gives the industry and buyers more confidence.’
Tod Evans, Peugeot Citroen Automobiles UK chairman and president of the SMMT
‘THERE are two grand strategies in terms of the agenda to reduce carbon deposits: one is diesel and the other is the move toward hybrid vehicles. We all know the advantages of diesel and the two disadvantages cited – particulate emissions and higher levels of NOx compared with petrol.
‘My company has pioneered a particulate trap that eliminates carbon deposits. France and Germany are more proactive than the UK in legislating to introduce this type of technology to eliminate one of the difficulties with diesel. Euro IV legislation does control NOx levels down a notch and presumably EuroV will do the same.
‘There is no problem in us developing the technology to reduce NOx on diesel, but it is expensive – so we have to make sure that what we introduce is not something that people don’t buy because it is too expensive.’
Nick Vandervell, UK Petroleum Industry Association communications director
‘It is important to consider where we’ve come from over the last 15 to 20 years.
‘The oil industry has worked hard with lead-free petrol. It has reduced the density level of diesel, cut sulphur levels and will shortly move to sulphur-free fuels. These will enable a number of technologies such as the three-way exhaust catalyst.
‘We have a number of interesting developments that can come with advanced fuel – we’re not just talking about the conventional biofuels we can make from rapeseed oil, but gas to liquids and gasification of biomass to wood.
‘These can have a very low aromatic content and be very valuable blending components in conventional petrol and diesel.’
Boards blocking safety moves
BOARD members are restricting many fleet decision-makers from complying with health and safety legislation despite managers wanting to improve policies.
This was the view of more than half of the fleet managers attending the conference, who claimed to be doing enough towards risk management only for it to be thwarted at board level. One delegate said: ‘It is vital to make the board understand the financial benefits of good risk management. We feel we are finally doing enough but it took a long time and a lot of pressure to get our management to back us.’
The issue of health and safety has been around for a long time, with guidance and information widely available but Brian Back, chairman of the British Vehicle Rental and Leasing Association (BVRLA) believes the industry needs to look at the bigger picture.
He said: ‘The solution is not cheap and quick but many companies continue to focus on today or tomorrow not next year.’
Back believes fleets need to have a comprehensive road safety policy in place which is fully supported by managers. He said: ‘This has to be a positive initiative. Employees need to be informed and trained and the policy needs to be completed with a full audit.’
Awareness of the issues surrounding health and safety is high but commitment remains low according to Back. However, by showing clear commitment, companies such as leasing and contract hire groups can create additional opportunities.
Customer service in spotlight
HAPPY staff create happy customers, a leading expert claimed.
And good or bad service is an epidemic spread by the spoken word, according to Simon Gulliford, group marketing director for Barclays.
He said: ‘The customer works out how to find best value. Customers will compare good and bad service wherever they find it and are constantly looking for the differences from one company to the next. It is the differences between companies, not the similarities, which make good customer service.’
Gulliford believes that a supplier’s employees are the root of good customer service practices. If staff are happy then this can mean the difference between retaining customers or not.
Gulliford explained: ‘The most accurate predictor of a forthcoming rise in customer service is a rise in staff satisfaction. If there is a decline in staff satisfaction then customer service will drop. With great service nothing should be too much trouble.’
Companies must put themselves in the position of the person they are dealing with, Gulliford reckoned. He claimed it was vital that organisations were clear and concrete in the way they managed their expectations, as customers needed clarity in terms of what they expected.
‘A customer wants things done right the first time and speed is not a driver of satisfaction it is now a pre-requisite.’
However companies cannot become complacent. As customers become more sophisticated then they will begin to have more power of choice, Gulliford believes. He said: ‘Once you have developed a stunning service that then becomes the norm, so this must be done at all times.’
Companies vote with their fleets
CHANGING customer demands in the fleet industry could spell ‘the beginning of the end of contract hire as it is now known’, delegates at the conference heard.
The contract hire industry needs to better listen to its customers to deliver a service that the fleets actually want.
This view was given by BT Fleet managing director Janet Entwistle, who explained how the telecommunications giant started a process of investigating whether to outsource its fleet some years ago.
It found, however, that not enough leasing companies fully understood operational vehicle fleets and instead created its own fully-fledged fleet management company, which now manages and maintains more than 65,000 vehicles in the UK.
Entwistle, named as the 16th most powerful person in the fleet industry in the Fleet News Power List 2004, said: ‘Fleets took the sales pitch once and they are damned if they are going to do it again. They are a lot more informed and want suppliers to commit to service levels.
‘A lot of customers thought cheap manhour rates meant cheap services, but that’s not the case and they learnt that. They want a partner. There is no such thing as a free lunch or free delivery or collection.’
She concluded her presentation with the question: ‘Could this be the beginning of the end of contract hire as know it? Smaller players will come in and be able to meet the needs of your customers. You need to listen to your customers.’
John Kiff, director of the International Car Distribution Programme, added: ‘Processes are great but it’s what it delivers that matters.’
One fleet manager in the audience said: ‘Firms sell outsourcing but don’t know what it is. They promise one thing but then leave fleets in a mess. We are intelligent, we know what we want. For God’s sake, help us. Think as a fleet manager and not as a customer services provider.’
Meet the Pope – it can be easier than seeing your leasing firm’s manager!
A FLEET manager has told how she feels it can sometimes be easier to get an audience with the Pope than a meeting with a leasing company account manager.
Julie Jenner of Nokia spoke at the conference to give delegates an insight into the demand’s of today’s fleet managers.
Giving examples of her experience after 10 years in the fleet industry, Jenner said it was important that suppliers and customers meet to discuss and decide on service level agreements at the outset.
From suppliers, Jenner seeks integrity, competitive terms, innovation, consistency, reporting, ongoing communication and, vitally, she said, honesty.
Jenner recognised that account managers come and go through promotion or having changed jobs but stressed the importance of a ‘decent handover’ to the person who takes up the position.
‘There is nothing worse than working with suppliers who reorganise their geographical area every six months – have you thought about how that affects your customers?’
She said it was vital that new staff members were fully versed in their new role and about the customer’s business and said that in her experience, on occasions: ‘It is sometimes easier to get an audience with the Pope that it is your own account manager.’
High quality IT systems that interface with the customer’s own computers are also a requirement as are exclusive and validated data reports in the correct format that are available on a quarterly basis or on request.
Being kept up to date with new and forthcoming legislation was another vital service. Jenner said: ‘Suppliers must be on the ball and predict what customers will be required to do to meet any new legislation.’
She added that honesty was a vital ingredient of any successful partnership and that some companies had pitched for Nokia’s fleet despite the fact that executives knew they wouldn’t be able to provide the service required.
She told delegates: ‘Some companies just want Nokia’s name on their books but can’t deliver the service. They think they’ll be able to sort out any problems that arise later.’
‘Cash for car’ loses shine
COMPANIES are starting to turn away from ‘cash for car’ schemes because of a heightened risk of exposure to corporate liability over accidents during working time.
Delegates were told that there was a growing level of concern that organisations which had allowed employees to opt out were now bearing a huge responsibility. KMPG UK automotive group lead partner Michael Steventon told the conference: ‘Vehicles need to be properly maintained and insured and fully appropriate to the purpose for which they are being used.
‘I don’t like making gloomy predictions, but I think it highly likely that over the next couple of years, a major accident will be caused by an employee using his own car on company business – and in assuming responsibility, his employer will face significant financial cost.
‘Our research indicates a growing level of concern over this issue. All the indications are that corporate liability exposure is prompting a growing number of boards to drive employees back into company car schemes.’
In a paper on new and used car pricing, Steventon forecast that record growth in new car sales would not be repeated next year as a result of softening demand.
He said: ‘Lower house prices are taking effect, and people are concerned that interest rates may continue to rise.’
However, in an earlier paper, Royal Bank of Scotland senior economist Mark Smyth said he did not expect an anticipated rise in the interest rate to 5% to have any significant effect on growth in consumer spending. He added: ‘But I do think the rapid development of China’s industrialisation will have the effect of forcing down the price of products while at the same time pushing up the cost of commodities like oil and steel.
‘This combination means China’s entry into the global economy presents a big challenge to the UK. But it also offers opportunities.’
‘Ignore safety and face a nightmare’
FLEETS choosing to ignore health and safety legislation and duty of care obligations could be heading towards a legal nightmare.
Under the current Health and Safety at Work Act it is an ‘employer’s duty to ensure the health, safety and welfare at work of his employees’ and company executives failing to abide by the rules could end up with a two-year prison sentence.
Andrew Armitage, head of the automotive sector at Howes Percival Solicitors, said: ‘Employers need to consider what steps to take to ensure employees are safe on the road. Ignoring the situation is not an option.
‘There is a view that road safety is outdated. Companies need to know by improving safety culture they can influence road accidents. The industry needs to find solutions so that it doesn’t become a problem.’
Armitage believes that companies must adhere to a set of specific duties in order to ensure they are complying with current health and safety practice.
Employers must create a safe place to work, use safe systems and safe equipment which includes vehicles. Vehicles have to be maintained, they need to be safe and the employer needs to take out a risk assessment, according to Armitage.
He added: ‘Employees also need to be protected from risk or injury and kept aware of changes which include adequate training. If an accident occurs while the employee is at work the employer could be responsible.’
Armitage advises those fleets which have yet to look at the Health and Safety Executive’s (HSE) guidance on work related road safety, to obtain a copy immediately.
Industry divided over green vehicle grants
BUDGET limitations forced the Energy Saving Trust to slash the financial incentive it offers to buyers of hybrid vehicles, delegates heard.
Head of TransportEnergy Richard Tarboton said the reason why it had to cut the incentive from £1,000 to £700 per vehicle concerns the limited amount of budget it has available for its grants.
He said: ‘This year we are expecting more than 2,000 hybrid vehicles to receive grants, so we have had to share out the money we have.’
The new grant level had been reached after a great amount of discussion and would allow the agency to meet the total demand for the year, he said.
But Peugeot Citroen Automobiles UK chairman and Society of Motor Manufacturers and Traders president Tod Evans told the conference: ‘I’m not sure that it’s right to pursue a policy of giving grants for different technology. Compared with a conventional diesel car, a hybrid costs an average of £3,000 to £3,500 more in terms of front-end capital purchase.
‘If you provide a £700 incentive at the front end, you’ve got to ask what effect that has and you disadvantage the second-hand car buyer in relation to residual values and whole life costs. I think you have to be very careful about this whole area of grants in a technology that is becoming more and more popular.’
Later, Fleet Audits managing director Stewart Whyte accused the SMMT of ‘scuppering’ plans for environmental car labelling – which led Evans to retort: ‘Scuppered means sunk without trace, and that’s not appropriate.’