Fleet News

Fleets hit their problems for six

1: Fleet safety in action

THE ramifications of the forthcoming Corporate Manslaughter Bill – and what fleets should be doing about it – were made clear by Bill Pownall, motor fleet class specialist for Norwich Union Risk Services.

Pownall said it was important to dispel fictional notions held by some in the fleet industry that no action was needed until the bill becomes law.

Corporations have responsibilities to ensure their drivers are as safe as possible and know what is expected of them, he said.

‘The fact that the driver has been given a handbook and asked to sign it does not mean that he understands it,’ he added.

Pownall identified five steps to maintaining safety: Identifying hazards; assessing risks within both vehicle and driver; developing controls; implementing those controls and continuously monitoring and maintaining strategies.

Through driver training and assessment, the ‘accident circle’ of crash, repair, crash, repair can be broken, he added.

Adrian Walsh, director of safety forum RoadSafe, said safety was a shared responsibility, and identified employees as the important factor.

He said: ‘Stop stressing your staff. That’s key to successful road safety.’

Additionally, he recommended the use of advanced vehicle safety technology such as ABS and ESP, and denounced the dangers of using mobile phones – even hands-free – on the roads.

2: Taxing times

THE Government is currently carrying out the second stage of a full evaluation into company car tax rules – but no date has yet been set when its findings will be published.

One aspect of the study into the company car tax reforms will be what effect it has had on the number of people opting out of traditional company car schemes, delegates were told at the conference by HM Inland & Revenue policy advisor Carolyn Howes.

She also urged attendees to keep a watching brief on the Climate Change Programme Review, which reflects environmental concerns and aims to reduce greenhouse gases, and will be published later in the year.

Howes said: ‘The review will give you an indication of how tax policies will evolve and develop in the future.’

A presentation performed by two actors also highlighted the fact the some company directors do not fully understand the type of car schemes they offer employees.

Hosted by KPMG, its director people services, Harvey Perkins, said the play illustrated why some fleet policies offered to staff are not suitable and could have health and safety implications. It covered Employee Car Ownership Schemes, outright purchase, the provision of pick-up trucks and Approved Mileage Allowance Payments.

Perkins said: ‘While ECO schemes can be effective in some situations, traditional company cars can be tax-efficient if it is the right car.’

3: Is cash king?

Cash-for-car schemes need to be run by people with clear responsibility for the programme or drivers will get confused over its benefits, and the administrative burden will become a nightmare.

That was the lesson learned by GSK when it reviewed its 5,000-strong programme. GSK manager, benefit relations, Harsha Modha told the conference. In the £24 million scheme, £15.5 million was being spent on cash allowances and the rest on excess mileage charges, early termination costs and administration.

Following the review the process was streamlined, HR was put in charge of running it, and drivers were happier and understood where they were saving money, with more than 6,000 different cars available.

Even the most financially-aware employees struggle to understand the fiscal advantages of cash-for-car schemes – a fog of confusion that led Barclays Bank to revert to traditional company car progamme.

Its fleet manager Caroline Sandall said that the bank had taken control of its fleet, made sure drivers got the right car for their need, and reduced the mass of red tape the cash-for-car scheme had produced.

She said: ‘I was floored by the administrative burden and the amount of tax reconciliation that went on.’

Sandall said that if a fleet feels a car scheme is not working for them, be brave and look to change.

4: Value your fleet

DRIVERS specifying extras including satellite navigation, metallic paint and leather trim for their new company cars will only serve to increase the vehicle’s depreciation at disposal time, delegates were warned.

A car loaded with ‘hidden costs’ has a higher front-end price but also a higher percentage of depreciation compared to a standard model when it is sold into the used car market.

Although satellite navigation systems can be a vital tool for company car drivers, the upfront price tag of hundreds of pounds will add little to the car’s used value, said Mark Norman, managing editor of residual value specialist CAP. He added: ‘Corporate drivers are obsessed with satellite navigation, but the used market doesn’t see it like that.’

Norman also predicts that diesel cars will fetch the same amount as their petrol equivalents at disposal time, despite the fact they cost more to buy new.

John Walker, head of business development at logistics and remarketing firm CAT UK Services, said ‘knowledge is power’ when it comes to fleets maximising residual values for end-of-contract cars.

He said: ‘The aim of the process is to have the right car, at the right place at the right time. Remarketing is about utilising information gathered through the lifecycle of the vehicle.’

Having information at their fingertips will allow fleet managers to choose the correct disposal route for a particular vehicle, he added.

5: What’s powering your fleet?

HYBRIDS, and in the longer term fuel cells, will be the technology that powers cars in the future. That was the message from Honda and Shell during a discussion on the future of fuels.

However David Dippie, director of Ashbrooke Fleet Management and chairman of the London West region of the Association of Car Fleet Operators, said in the short term that no current alternative technologies could viably challenge diesel.

With oil reserves due to run out at an as-yet undetermined point, Honda UK’s head of corporate sales, Stephen Hollings, said only fuel cell technology offered a viable emission-free future, but would take time to develop.

In the meantime, hybrid technology was being embraced by an increasing number of manufacturers and offered a halfway house, reducing emissions and increasing economy.

Dippie said technologies such as electric power, LPG and natural gas did not have sufficient supporting infrastructure to succeed commercially, a problem compounded by a lack of help from the Government.

Despite rising diesel costs and decreasing residual values, diesel will continue to be the most cost-effective option for drivers in terms of tax and mileage costs, he added.

Phil Williams, business development manager at Shell UK, was in agreement on the future of fuel cell technology, but said the major oil companies, still smarting from money lost on LPG investment, would not move until more carmakers agreed to work together.

6: A charter for fleet suppliers

FLEET decision-makers created their vision of the perfect supplier during the conference. Conference chairman Declan Curry worked with delegates to create the wish-list which will be the basis of a charter for fleet suppliers, to be presented to the industry at the Fleet News Challenge, Change and the Customer conference in London on November 2.

Liz Hollands, fleet manager at DTZ Debenham Tie Leung, stressed the importance of having a good relationship with suppliers and making sure they delivered on their promises. She said: ‘The fixation with suppliers seems to be that providing more services or being the biggest is better. But to have the edge, you just need to offer an appropriate range of services efficiently.

‘In some companies, the people you are dealing with don’t have the same vision that the company promises. When I deal with companies, I want the relationship to be a partnership. There is no point grinding the last penny out of a deal, only to find the service isn’t acceptable as a result.’

As many companies are using the internet to cut down on paperwork and administration when dealing with customers, Hywel Houghton-Jones, head of group purchasing, Nationwide Building Society, explained the whole process had to be handled carefully.

The firm applied the term ‘useability’ to its car choice internet site for staff, focusing on two areas – that it had to be intuitive and need no training.

He warned: ‘Don’t overlook the customer experience. There are significant financial benefits to getting things right the first time because you avoid the cost of reworking services.’

The company learnt the lesson to its cost, as it first launched a driver website without following its useability guidelines closely enough.

After some of the worst user-response results the firm had ever had, it had to rework the website to reflect drivers’ comments, adding extra and unnecessary expense.

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