Fleet News

State of the industry: fleet industry leaders speak out

Fleet managers and senior figures in the fleet industry speak about the major issues they have faced and the difficulties that lay ahead

Mark SinclairMARK SINCLAIR, head of Alphabet
Rising fuel prices, the effects of scaled CO2 taxation and growing awareness of a potential severe squeeze on energy costs in the next few years – all these are feeding through into fleets’ and drivers’ actions.

More than half the cars registered by Alphabet in 2007 were in the under-150g/km CO2 bracket, with a 350% leap in cars with emissions below 120g/km.

I also expect to see growing interest in green travel plans in 2008, with tele-conferencing, working from home and car sharing as key areas. This will help to reduce emissions but the primary business objective of the move will be to benefit the bottom line by cutting mileage costs.

PETER TATLOCK, managing director, MasterleasePeter Tatlock
The environment is an area of mixed messages and the industry is currently waiting in limbo on potential changes to Approved Mileage Allowance Payments, capital allowances and benefit-in-kind tax, which we hope will be clarified in this year’s Budget.

These factors could make company cars much more appealing to businesses that have decided to take the cash route.

At the moment there are many potential environmental and taxation changes being bandied around that fleet managers need clarification on before making important fleet decisions.

Phil MairsPHIL MAIRS, head of operations, RAC Services
Drivers using a hand-held mobile phone is one of the things that we’re too used to seeing – you probably saw at least one person talking away while you were on your way in to work this morning.

What about your drivers – are they doing it too?

Our motoring compliance unit has identified that half of the drivers with a conviction for using a hand-held mobile phone also had more than three points on their licence.

Licence checking is a very effective way of helping to enforce your company car policy regarding the use of a mobile phone while driving, particularly with the recent increase in points on company car driver licences for this reason.

In one case, we were asked to confirm a time and date of the offence which we obtained from the court.

The employer cross-referenced their records and as the driver was driving a company vehicle on company time, the driver’s employment was terminated.

Julie JennerJULIE JENNER, chairman, ACFO
Fuel cost is a major issue at the moment. People are asking how to keep track of the costs.

There are some people out there who weren’t truly aware of the real cost to them and because of the price hike it’s a big thing to try and control it and figure out the best way forward.

People are also trying to anticipate what will come out in the Budget.

Will we finally get an answer on the state of play regarding potential changes to Approved Mileage Allowance Payments (AMAPs)?

We need to start planning for 2010/11 and when you’re rotating cars on a three or four-year cycle you need the stability and it isn’t there at present.

There is a constant call for stability and a consistent message.

There is a lot of talk about the state of flux surrounding employee car ownership (ECO) schemes and people are also talking about corporate manslaughter legislation, which is only just around the corner.

Adrian RushmoreADRIAN RUSHMORE, managing editor, EurotaxGlass’s
The gloomier outlook for the UK economy in 2008 looks likely to have ramifications for the used car market.

We forecast that the price of the average three-year-old car could soon be around £400 less than in 2007.

While this will inevitably have consequences for the used car retail sales, we should not forget the inherent resilience of the market, which enabled continued robust sales during the first half of 2007 in the face of five interest rate rises since the previous August.

Sharper declines in used car values could also be avoided thanks to an expected drop in availability.

New car sales in 2005 were down on the previous two years, which means that there will potentially be fewer three-year-old cars arriving in the wholesale market this year.

If new car sales activity is also down on 2007, this will also reduce the number of cars due to be part-exchanged.

However, there will still be pressure on used prices because, even if the supply is slightly less, this is likely to remain too high in relation to expected demand.

LARRY BANNON, fleet manager, National Blood Service
Long lead times on new commercial vehicles are causing problems.

They have a knock-on effect on our replacement cycle, which is compromised when vehicles don’t show up on time.

It seems to be something affecting all of our suppliers.

Mike WatersMIKE WATERS, head of market insight, Arval
With the business community facing uncertain times with the economy, operating costs are understandably being scrutinised.

Business fleets have faced a raft of increases rcently, all of which are contributing to the total cost of business travel.

As with many areas of cost review, the devil is in the detail.

While a focus on headline cost increases such as fuel is essential, so is an appreciation of ancillary cost increases that make up the total cost of the operation.

With a fuel duty increase planned for April, pressure on costs seems set to continue.

All this points to the need for closer management of fleets and effective decision making to ensure that all fleet costs are identified and controlled.

Controlling costs will always be key, but escalating prices make this more important than ever.

STEFAN RODGERS, head of marketing and product development, FMG Support
The credit hire/insurer relationship is still at a deadlock, and we are now seeing more insurers call for the general terms of agreement to be reviewed to try to resolve the current disagreements.

However, many agree that a simple approach is the answer to solving issues of margin, hire duration and daily rates and most importantly, encouraging best and fair practice.

Control needs to be maintained throughout the claims process and costs must be based on fair and appropriate payments that benefit all parties and most importantly the customer, if the industry is to move forward.

Green policies remain high on the agenda, with many companies using the opportunity as a profile building exercise.

For an environmental programme to truly be successful however, it has to deliver tangible benefits – that is saving costs by generating efficiencies.

With this as the key driver, the benefits to reputation will follow.

And for companies in fleet, the focus shouldn’t just be internal.

Because of the industry that we work in, we must seize the opportunity to work closely with customers to achieve a manageable level of sustainability that benefits the bottom line.

Corporate Manslaughter Act

PETER TATLOCK, managing director, Masterlease

The end of 2007 and the beginning of 2008 has really been a time of mixed messages from the Government for the fleet industry.

In January, the Sentencing Guidelines Committee announced a new proposal which, if agreed, would see drivers spared prison for causing death by careless driving.

Yet at the end of last year the Crown Prosecution Service recommended sentencing drivers to up to two-years in prison for using a hand-held mobile phone while driving.

The two proposals are clearly at odds – prison for using a mobile phone but not for causing death.

BILL POWNALL, motor risk manager, Norwich Union
It is common practice for employees to use their own vehicles for business use and it is essential that a clear company policy is in place to ensure vehicles being used are fit for purpose, the driver is properly licensed, competent and medically fit to do so.

We strongly urge fleet managers to get a handle on these arrangements as a matter of priority to ensure that drivers are safe and legal, with adequate business use insurance.

This is a basic duty-of-care issue which should be taken seriously, particularly with the Corporate Manslaughter Act coming into force, but also for the protection of the employee while driving for work purposes and others who may be affected by their actions.

LORRAINE FARNON, UK sales director, National Car Rental
A great deal has been said about what should be done to prepare for the strengthening of corporate manslaughter legislation in April.

But with news of the credit crunch and speculation of a recession, the temptation may be to cut corners on health and safety policies to save costs.

The problem with this is that something as mundane as a quick trip to the post office in a private car is a potential risk.

Of course, the part vehicle rental can play in supporting duty-of-care is clear and already well-documented.

The real challenge will be to ensure these vehicles are driven by ‘road-aware’ employees who recognise the danger of distractions – whether mobile phones, navigation equipment or simply the pressure of deadlines.

Chuck IvesCHUCK IVES, head of fleet, Network Rail
The last three months have been busy.

We’ve been carrying out risk assessments with the corporate manslaughter legislation in mind and running various scenarios around that.

It’s all been internal work; we’re doing a restructure of the fleet which is pretty big news.

We want to be better placed going forward. It’s not about money or resources, it’s about doing things.

With all the resources in the world you have still got to get up and make things happen.

We’re looking to improve management, communications and reporting lines, and it’s one thing putting ideas on paper but another to make sure they will work.

Fleet managers need to be compliance managers, mentally. It’s not all doom and gloom, but there’s a big sea change coming.

There’s always something new and fleet managers need to be on top of these things.

Larry BannonLARRY BANNON, fleet manager, National Blood Service
We have got quite a number of internal initiatives that we’re looking to implement, and we’re looking as of April at the corporate manslaughter law coming in.

Our internal issues are to do with the way we change the collection of blood.

We just went through a review with an external consultancy and are now wrapping proposals and strategy around the recommendations in the report.

We’re bringing in larger vehicles to move more blood than we used to, but it brings a lot of issues such as different driving techniques that our drivers will have to deal with.

They will be doing longer distances so we have to come up with a lot of training, checks and monitoring, which ties in with the corporate manslaughter laws.


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