FLEET managers have observed their numbers diminishing as more and more companies subscribe to the adage ‘stick to the knitting’ and seek specialist suppliers for non-core activities.
The increase in user-chooser policies, the expectation of choice lists online and the obvious economies of scale from specialist suppliers all support the case for efficiency savings from outsourcing.
So, if delivery of the company car policy is now firmly in the hands of outsource fleet providers, what future is there for the fleet manager?
Benefit-in-kind taxation has done an excellent job in steering drivers towards more economical and more environmentally friendly vehicles.
Vehicle reliability has improved to the point where many fleet vehicles will only ever see a workshop for standard servicing – and at long last three year vehicle excise duty is on the horizon. But if fleet managers really want to be crowned as custodians of transport, then a huge opportunity rests at their doorstep and it offers scope for costs savings as well as massive environmental benefits. Step forward mobility manager.
Measures of success at managing company fleets often revolve around manufacturer discount negotiated, contract hire rates reduced and costs of a day’s rental on a Vauxhall Astra.
While hardly unimportant, these headline measures ignore the biggest cost of all – how much the fleet is being used.
No amount of bigger discounts will count for much if the total vehicle mileage is out of control – the more business mileage the bigger the fuel bill, the higher the accident rate and the bigger the contract hire excess mileage recharges. But in this list we haven’t identified what are arguably the biggest challenges in managing business mileage – the marginal cost of an hour’s driving in terms of vehicle and fuel costs is about £10, but the cost of an hour’s unproductive manpower is more like £25.
And there is no price that can be put on the harmful emissions that come from unnecessary journeys.
If managing mileage is the Holy Grail, then what constitutes an unnecessary journey and how can fleet managers influence the hungry sales force intent on winning the next contract?
Well, ultimately line management will decide, but currently on what information do they base their decision?
When did the board last see the cost of business mileage including the manpower cost? When did the decision on train versus car take account of higher productivity while working on the train, and when was the last review of video conferencing and the benefits that could bring to the business? If these suggest black holes in terms of managing mobility, then lets look at the biggest black hole of all – grey fleet.
Business travel in private cars is on the increase as more and more fleets have offered flexibility or walked away completely from the company car. Inland Revenue AMAP rates offer a simple and uncontentious method of reimbursement, but with an almost guaranteed incentive for staff to find reasons to travel.
This may sound like a poisoned chalice, but for those prepared to challenge the status quo, to identify alternatives to the car where other solutions are more effective, to make not travelling an attractive option because video conferencing is viable and require the use of daily rental rather than the uncontrolled use of private cars – then the prize is massive both for organisations looking to increase efficiency and those who seek to reduce the environmental impact of business travel.