Fleet News

Hit for Six Conference: Fleets put safety and environment first (with video)

The Fleet News Hit for Six conferences looked at the six most important issues facing fleet managers.

We surveyed hundreds of readers and asked them to prioritise the topics that really matter to them.

The events team then worked with the newspaper team to put together a programme of speakers who are experts in the six subjects chosen by readers.

This year the areas where fleet managers are being “Hit for Six” were: finance, management, technology, green transport, safety and support/help.

Two full-day conferences were held in September – one in Oxford and one in Ilkley. They were both chaired by respected news broadcasters and sponsored by Lex and CAP.

Find out about other essential Fleet News events at the website: www.automotive-events.co.uk.

Finance

  • Company car tax

    Fleet managers have been warned that the budget is likely to introduce significant changes to the company car tax system.

    Dave Raistrick, senior manager and chartered tax adviser with PricewaterhouseCoopers, explained that a new 10% benefit-in-kind tax band, which will apply to cars that produce 120g/km of CO2 or less, was expected.

    The changes will come in force for the 2008/09 tax year. In anticipation, manufacturers have already launched a range of sub-120g cars.

    Mr Raistrick also pointed out that from April 2008, a 2% reduction in tax will be introduced for cars running on E85 bioethanol.

    He additionally advised fleet managers to expect major changes to the capital allowances scheme.

    The government is proposing to remove the £12,000 limit and to create two new pools – a general pool of cars producing between 121 and 165g/km and one for cars producing in excess of 165g/km.

    “This will have a major impact if HMRC goes ahead with this,” warned Mr Raistrick.

    For example, the allowance for a £20,000 car producing over 165g/km will fall from £11,750 to just £6,878 in total. “Considerable change in this area is still on the agenda,” said Mr Raistrick.

    “Consider all your options and wholelife costs before making a decision.”

  • Model choice savings

    The government’s pre-budget report, which is due to be published imminently, could signal significant tax increases for less eco-friendly vehicles, fleet operators have been warned.

    David Rawlings, automotive consultant from Deloitte, highlighted the financial savings to be made from providing employees with a more fuel efficient car within their usual price range.

    He cited moving from Jaguar X Type to a BMW 3 Series. Though both cars have a similar list price, choosing the BMW could save companies and drivers around £6,000 over the car’s fleet lifetime.

    In the light of possible tax changes and pressures to provide a greener fleet, Mr Rawlings advised managers to avoid procuring cars with CO2 emissions over 190g/km.

    Management

  • Depreciation

    With depreciation costing UK companies and motorists some £13.3 billion over the past three years and accounting for two-thirds of a vehicle’s wholelife costs, it is vital fleet managers select the right vehicle, in the right colour and with the right options.

    Colour is a significant driver of residual values at disposal, advised Colin Whelan, business research manager at CAP. Buying a blue Audi A4 rather than the more popular silver will cost a fleet £775 in lost residual at disposal.

    Drivers want the most desirable cars, says Mr Whelan. But moving from a top spec Mondeo to a low spec BMW will also cause problems at disposal.

    There are several other factors that will determine value at disposal. Trim and spec are very important, as is vehicle condition and having the correct paperwork: no MoT can cost up to £500.

    In addition, managers must realise there is a cost associated with setting an unrealistic reserve. “If it doesn’t sell it will cost you.”

  • Tender relationships

    Fleet managers need to establish firm goals and maintain good business relationships with providers in order to run an effective tender process.

    Tony Shaw – the man responsible for the Royal Mail Group’s £180m annual fleet procurement operations – highlighted the importance of external relationships as well as internal interests throughout the negotiation process. Before liaising with vendors, managers need to decide what they really want in their fleet and then decide on suitable aims and action plans for procurement.

    Unsuccessful parties should receive detailed debriefs as this not only reflects well on the company and manager’s reputation but also paves the way for future business.

    Mr Shaw advised managers to take onboard a supplier’s circumstances, not accept contracts worth more than 25% of the applicant’s turnover and behave responsibly by ensuring the provider is not dependant on one particular deal.

    Technology

  • Management software

    In the technology session, delegates were told about the most popular fsoftware in the world and why it is not an ideal choice for fleet managers.

    Microsoft Excel is the most widely-used software program among fleet managers but is not up to the job of monitoring and measuring the modern fleet, claimed one speaker.

    “A simple spreadsheet does not interface with other systems and run reports,” said Stephen de Launay from Chevin Fleet Solutions.

    “But it is used by more fleet managers than anything else.”

    A show of hands among delegates suggested he was right.

    Mr de Launay advised fleets to consider software that integrates with other office systems such as finance and HR, sharing data from as many sources as possible.

    He also told fleet managers to plan ahead when considering the need for fleet software and to get a full cost breakdown.

  • Essential technology

    Steve Cruise, head of new business development at JATO Dynamics, looked at the trends in take-up of new technology by business drivers.

    “Technology considered innovative or a luxury four or five years ago is considered essential today,” said Mr Cruise, citing air conditioning as an example.

    Data available from JATO Dynamics compared the popularity of various types of technology in different car sectors and also adoption in the UK compared to Germany.

    In the case of optional satellite navigation, take-up in Germany is much higher than in the UK.

    The availability of safety features like electronic stability control (ESP) is growing as both a standard fitment and an optional extra.

    In Germany it is standard on almost all lower-medium segment cars.

    Mr Cruise went on to talk about the intelligent choosing of optional technology and its impact on residual values, with satellite navigation having a positive effect and ESP offering a cost-neutral safety feature.

    Green transport

  • Environmental savings

    Fleet managers could save thousands of pounds every year by choosing models with the right size of engine and powered by the right fuel.

    Speaking on behalf of the Energy Saving Trust, Nigel Underdown outlined the substantial savings to be made from “going green” and reducing unnecessary mileage.

    “The case for green fleet management is very clear,” he said. “Greener fleets save money.”

    Mr Underdown gave the example of moving from an older 520i petrol BMW to a newer, greener 520d diesel model, which could save as much as £2,100 per annum as well as reducing carbon emissions.

    He stressed the importance of measuring mileage, investing in driver training and clamping down on grey fleets to both save costs and become more environmentally sound.

  • Adopting the three Rs

    It is vital fleet managers observe the three Rs when selecting new models.

    They must select the Right vehicle and the Right fuel to make the Right choice, says Malcolm Noyle, MD of Noyle Fleet Solutions, which specialises on business transport and the environment.

    “Today’s fleets can no longer operate a single fuel type; the answer is a range of fuels that are suitable for the vehicle type and use,” says Mr Noyle.

    “It is critical to understand what the vehicle is doing in order to make the right choice and to apply the best technology,”

    Safety

  • Crash losses

    Fleet managers are being advised to calculate the entire financial losses incurred from a vehicle crash.

    “Managers need to calculate the uninsured losses for each accident,” explained Saul Jeavons, director of Transafe, a global corporate road safety advisory company.

    These losses are typically significantly higher than the crash repair outlay, he said, and include costs associated with lost working hours spent filling out accident forms.

    Mr Jeavons also pointed to a culture of “ignorance is bliss” among some fleets when it comes to risk assessment and accepting corporate and individual responsibility.

    This is particularly evident when issues such as driving while using a mobile phone are raised, despite the massive media coverage of the problem and the increased penalties the offence now attracts.

    It is clear there is still a long way to go with some fleets, says Mr Jeavons.

  • Corporate manslaughter

    The increasing onus on duty of care in the light of new corporate manslaughter legislation is placing a growing burden on fleet managers.

    According to senior solicitor and traffic legislation expert Philip Somarakis, fleet managers face the risk of prosecution for gross negligence in the event of a workplace death.

    The 2007 Corporate Manslaughter Act specifies that any failure of care must amount to a gross breach and must be by a senior manager.

    Mr Somarakis said: “Fleet managers could be considered senior management and are therefore liable for prosecution under the law.”

    The act includes the removal of crown immunity and the introduction of new sanctions and penalties. One sanction could see a company being forced to publish a statement such as “we have been found guilty of manslaughter”.

    Support and help

  • Finding free advice

    Operators have been urged to network and make use of the wide range of free advice on offer to help run safer, cheaper and greener fleets.

    Ian Read, fleet manager for Veolia Water UK, said a wealth of industry knowledge and experience is available.

    A good starting point for managers new to the industry is the sector’s dedicated media, such as Fleet News, as well as searching through an extensive range of online resources.

    Mr Read also pointed to support organisations such as ACFO, ICFM and the SMMT and interested bodies like RoSPA and Brake.

  • Financial savings

    Fleet managers could save up to £825 a vehicle as a result of industry specific management training.

    James Langley, deputy chairman of ICFM, outlined the effect of accredited management training on improving best practice and cost effectiveness within fleets.

    Graduates develop a detailed understanding of the industry, saving their businesses money and effort whilst improving their own prospects.

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