Fleet News

State of the industry: Fuel, phones and grey fleets

Fuel

Paul Holmes, head of risk management, AA Business Services

“Runaway oil prices have seen average UK petrol and diesel prices break through the £1-a-litre barrier for the first time in the nation’s history.

“These findings highlight the continuing volatility of fuel prices and the need for fleet managers to tightly monitor fuel expenditure.

“Looking ahead, with fuel prices set to rise further, we anticipate that developing green fleets will be an increasingly important priority among small companies.”

John Bradley, fleet manager, Hampshire Police

“We’ve budgeted for rises in fuel prices, but nevertheless it’s a major overhead in running the fleet.

“Two to three years ago it was quite evident from world events and views on peak oil that prices would rise, and we got an increase in our capital budget for new vehicles.

"In the last 18 months we’ve rolled out significant numbers of Euro IV diesel technology cars which are very fuel efficient.

“We also have an intranet site with the prices of fuels and the ideal areas for officers to go to purchase.

"We try to buy from supermarkets where possible and encourage officers not to make large detours to use specific sites.

“Additionally, we have a bunkered supply of diesel.

"We can save some as a back up if we sense that prices could be about to go up at the pumps.”

Kash Hussain, head of sales and marketing, Bynx

“The fuel crisis was fully expected and well documented over recent months.

"However, companies and clients may take a harder look at their fuel policies and ensure they don’t make a knee-jerk reaction to sever or reduce the fuel recompense.

"The chancellor has indicated changes to company car tax-ation and all are waiting with bated breath on such proposals, where it’s likely that greater incentives will be given for choosing more environmentally friendly vehicles as the Government aims for a 60% reduction in CO2 emissions by 2050.

Rhys Thomas, national fleet manager, Unichem

“The cost of fuel is one that we have to deal with and absorb.

"The commercial vehicles use fuel from bunkered tanks, but for cars we use Allstar fuel cards and encourage the drivers to use supermarkets to refuel.

“On next year’s budget we have increased the average cost to try and accommodate where we believe the fuel prices will be, but it’s a necessity – the cars won’t run without it.

“We’ve just reviewed the fleet and limited the car side to diesel only, and we’re constantly reviewing alternative fuels but as yet there’s nothing with the range and capacity we need.”

Steve Miller, group fleet manager, CliniMed Holdings

“There seems to be a lack of interest in the company in what must be a significant cost but it’s on my agenda to tackle.

"Early in the New Year I intend to embark on a major project to examine what our fuel requirements really are. We use fuel cards, but it’s all dealt with by accounting and administration, so I don’t really have a clue what our spend is.”

Grey fleet

Mike Waters, head of market analysis, Arval

“With potentially one million grey fleet vehicles on the road the industry is facing a big issue.

“Through a combination of growing social expectation and legislative pressure, businesses will have no choice but to address the grey fleet issue.

"The Corporate Manslaughter Act will, as of next April, make it easier to prosecute businesses following fatal accidents. The grey fleet is not exempt from this.

“The Crown Prosecution Service has also stated that it intends to work more closely with the Health and Safety Executive to regularly assess whether employers should be held responsible for incidents involving workplace driving.

“Without a clear policy to monitor the condition of vehicles, companies could be leaving themselves exposed to prosecution.

“Businesses will also need to face up to the environmental implications of the grey fleet.

"The Government this year published its strategy for reducing carbon emissions from all levels of transport. Business mileage will be part of this.

"In the near future it will simply not be acceptable for vehicles to remain unmonitored and unmanaged.

“The health and safety, environmental and financial implications of having little or no knowledge over large numbers of vehicles will force a step change in how businesses come to manage their mobility. The grey fleet will, by necessity, become a key part of this change.”

Alison Harding, fleet administrator, BBT Thermotechnology

“It’s something we’re going to look at more closely in the New Year, mainly because of the duty of care issues flying around at the moment. It will be a full-on review of how we deal with grey fleet.”

Tony Williams, managing director, All-in-One Leasing

“Our discussions with fleet operators have shown that it’s normal practice to check a new employee’s driving licence before handing over a company car, yet one in three don’t carry out checks on new employees who use their own vehicles on company business.

“What’s more, a majority of companies don’t routinely check insurance policies to ensure employees have adequate insurance cover for business trips.

“Asking an employee to drop off late postage, therefore, could have far-reaching consequences for a business that has failed in its basic duty of care.”

Steve Miller, group fleet manager, CliniMed Holdings

“Grey fleet has become one of those niggling issues.

“Every company I know of has an issue with grey fleet, although many probably don’t realise it.

"I’m trying to remedy it at the moment to make sure we’re covered where we need to be.

“I don’t know until I research it how many people in each of our seven business units are going out on company business in their own cars.

“We already have something in our policy that says anyone doing more than 100 miles should request a pool car or a rental car.

"But unless I know who the people are, I can’t police them.

"I suspect there will be resistance if we try to make people take out business cover on their own insurance.

"It will be interesting, but I hope to have it nipped in the bud by the end of the year.”

Mobile phones

Richard Schooling, commercial director, Alphabet

“Mobile phones remain a hot topic, with several of our customers currently debating whether to introduce usage guidelines – hands-free only for example – or to go a step further and forbid their drivers from making any calls when on the move.

“It’s critical for fleets to take control of this issue, especially as tougher sanctions could see drivers prosecuted for dangerous driving if they cause danger while on a phone call.”

Rhys Thomas, national fleet manager, Unichem

“We have a dilemma over mobile phone use at the moment. We have a high number of sales reps out on the road all day.

"Initially we issued hands-free kits but our instruction was that they shouldn’t be used while driving.

"But it’s under review again with human resources, because of the impact it has had.

"People can’t stop every time they need to make a call.

"It’s unclear how the review will work out.”

Environment

Kash Hussain, head of sales and marketing, Bynx

“Governmental and environmental issues are occupying our clients’ thoughts at present.

"The industry is totally immersed in green concerns and contract hire, fleet management and rental organisations have a key role to play.

“However, there are a lack of suitable incentives for either fleet managers or drivers to change their behaviour.

“Without the right incentives in place the drivers are unlikely to make large compromises or sacrifice their user-chooser approach for one that is more environmentally friendly.”

Marcus Puddy, head of fleet management, Lloyds TSB autolease

“Over the past year, the environmental topic has raised its profile and not just in terms of corporate social responsibility obligations.

“The issue is no longer simply about satisfying shareholders and impressing customers and employees, but has become a physical, financial element of business.

"This is mainly down to Government policy which has placed financial pressures on to environmental obligations.

“There is now a much stronger financial business case for taking action.

"The Government has already aligned benefit-in-kind tax and vehicle excise duty to emissions and has given very strong indications that it will continue to bring legislation and tax in line with its own green agenda.”

James Rodger, global automotive leader, BearingPoint

“It comes as no surprise that green issues have been hot on the media agenda.

"What is surprising is that the environment has failed to feature high on the agenda of the UK’s fleet managers.

“Rather than addressing environmental concerns over vehicle use, companies are instead relying heavily on fuel consumption and emissions improvements put in place by vehicle manufacturers.

“With the Queen’s Speech confirming that the Climate Change Bill will be taken forward, it is clear that this topic is not going to go away.

"The need to demonstrate green credentials is increasingly vital for businesses and it is essential that the fleet industry acknowledges its responsibilities and reviews the way in which the operation and usage of company cars impacts the environment.”

Alison Harding, fleet administrator, BBT Thermotechnology

“We make central heating boilers and are looking into renewable energy as a company so the green issue dovetails really nicely for the fleet team.

“It’s a corporate social responsibility issue for us. We’ve got an Energy Saving Trust green fleet review coming up and we’re having a complete policy overhaul in the first quarter of next year.

"We’re looking at limiting cars by bands and operating a diesel-only policy, as well as getting an electric van.

"The environment is now such a hot potato that the senior management thinks that we do need to do something about it.”

Keith Allen, managing director, ALD Automotive

“Very few companies have taken concerted, across-the-board action to reduce their carbon footprint.

“We believe this will increasingly change into 2008 and beyond as the Government’s taxation regime continues to encourage businesses and company car drivers to select low emission vehicles, while penalising higher-emission models. “Vehicle manufacturers are bringing to market some excellent low-emission cars, which means businesses can offer motivational user-chooser policies without reducing the quality of models on offer.

“Simultaneously, companies and their drivers will increasingly realise that the selection of cars with low carbon dioxide emission ratings will mean corporate and personal tax savings.

"Average CO2 emissions are reducing across our leased vehicle fleet, but given the range of cars available, further reductions are still possible.”

“We anticipate that the Government will align capital allowances with CO2 emissions in its King Review, due out in March 2008.”

Wholelife costs

David Rawlings, automotive consultant, Deloitte

“Only operators who are either very brave or very foolish can afford to make car acquisition decisions based solely on list price or rental.

“The Government has already shown how it can influence drivers’ decisions through taxation; soon we will see corporate decisions similarly influenced.

"Companies basing acquisitions on wholelife costs can be wasting money if they don’t now include tax.

“Assuming the Government implements the tax changes it has been alluding to, 165g/km and 120g/km will be the key benchmarks.

The proposed changes will open up a debate as to whether cash alternative schemes are still viable.

"Many have been disappointed to find the savings have vanished. Subsequently, they have moved some or all of their drivers back into a company car scheme.

"I predict this trend to continue.”

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