Commercial fleet case study: Network Rail

Britain’s rail network carries 1.3 billion journeys and 100 million tonnes of freight every year, which is forecast to rise by 100% and 140% respectively by 2045. The logistics supporting it must operate at the cutting edge to deliver a first-class service.

Network Rail is responsible for running, maintaining and developing Britain’s rail tracks, signalling, bridges, tunnels, level crossings and viaducts, as well as 18 of the country’s biggest stations. Critical to the smooth operation of train journeys is Network Rail’s fleet, which won the van fleet of the year transport/logistics award in the 2014 Fleet Van Awards (relaunched as Commercial Fleet Awards for 2015 - see page 18).

The fleet comprises 5,400 light commercial vehicles, a wide mix of 350 other commercial vehicles, from 5.5 tonnes to 32 tonnes, and 1,600 company cars. Steve Duffy, Network Rail’s business support manager (road fleet), confesses he was “staggered” when he learned that a train company ran a fleet of nearly 7,500 vehicles – it is ranked among the top 10 fleets in the country by size.

Duffy says: “It is mind-blowing what we have to take into account. We have to predict what the organisation will require in the future and then, where possible, future-proof the vehicles and designs that are being introduced and discussed today.”

Improving the network – providing faster, more frequent and more reliable journeys – means the logistical planning of transporting employees, equipment, essential stock, maintenance spares and materials is a constant challenge, involving both scheduled and unscheduled work.

“Understanding the way a big fleet has to operate within a major organisation, and that we can and do play a part in every single aspect of the company’s operation, is a major challenge,” says Duffy, who reports to business manager Julia Territt in a department led by director Paul Gilbert.

“The vehicles purchased and then converted to the specification of our workforce are vital to them arriving on site safely and undertaking work on the infrastructure to benefit the travelling public.”

Duffy’s role is chiefly operational, with day-to-day management responsibility of the fleet.

He is the holder of Network Rail’s operator’s licence and, over the past two years, has been responsible for the smooth introduction of more than 5,000 vehicles, from light vans to messing vans and HGVs and including two electric people-carriers.

In the past five years, Network Rail switched from leasing to outright purchase for most vehicles – funding of heavy commercial vehicles is a mixture of owned and leased – and changed fleet management provider from ARI to BT Fleet, signing a five-year agreement through to 2017.

Justifying the switch to buying,  Duffy says: “We can borrow money from the government at a more attractive rate than from a leasing company or finance house.”

A team from BT Fleet works alongside Network Rail at its base in Milton Keynes.

“The benefits are many. We have numerous face-to-face  discussions on issues that impact on the day-to-day operation of a large fleet,” says Duffy.

“With the team based across the corridor, if there are any urgent issues that could affect the safe operation of the fleet, actions can be sanctioned immediately.”

BT Fleet provides a range of in-life services to Network Rail, including vehicle servicing, short-term rental, accident management, tyre management, windscreen repair and replacement and breakdown and recovery. Network Rail manages vehicle acquisition and disposal.

To keep BT Fleet on its toes and, critically, vehicle downtime to a minimum, regular contract review meetings are held between the two companies.

“We have a dedicated person within Network Rail who looks after the contract,” says Duffy. “A fleet engineer deals with the technical aspect of vehicles that break down and I work with him to make sure that, where possible, the fleet is working and we address any issues including vehicle recalls and manufacturer issues.”

Light commercial vehicles are typically replaced on a five-year/100,000-mile cycle and cars at four years/80,000 miles. Suppliers include: Fiat, Ford, Isuzu, Iveco, Mercedes-Benz Trucks, Peugeot, Renault, Toyota, Vauxhall and Volkswagen.

Larger commercial vehicles, including HGVs, have a typical replacement cycle of seven years. The extensive mix of vehicles, many used for repairing and upgrading the rail track, include machines that run on both road and rail.

All road-based heavy commercial vehicles are managed as part of the BT Fleet contract. For the road-rail machines, BT Fleet also manages road servicing, but the rail-side maintenance is a specialist item managed via specific contracts.

Because of their specialist nature, minimising downtime on the road-rail vehicles is critical, says Duffy. “The general cost to the business if they are out of service can affect maintenance work being undertaken on the railway and lead to financial penalties being imposed. Therefore, we have a system where specialist vehicles are highlighted and we obtain immediate answers from relevant budget-holders to get machines operational again as soon as possible.”

Operating such a complex fleet means vehicle requirements are discussed within Network Rail prior to any tender being formally issued. Once a manufacturer is chosen and awarded the work, the fleet team works hand-in-hand with suppliers and converters.

“We need to ensure internal vehicle conversions will not make the vehicle overweight and come up with innovative designs and cost-saving methods, while at all times ensuring compliance,” says Duffy, highlighting the fact that whole vehicle type approval was key in ensuring delivery of a “safe vehicle”. Compliance with new European Community Whole Vehicle Type Approval regulations, which came into effect for light commercial vehicles up to 3.5 tonnes in April 2013 and 3.5- to 12-tonne panel vans in October last year, is a major issue for Network Rail this year.

Duffy says many vehicles are slated for replacement in 2015, with the focus on ensuring type approval and maximising value for money, while always taking account of fitness for purpose, vehicle emissions, fuel efficiency and, where possible, future-proofing for the workforce.

Uniform conversion compliance across vehicle types makes it easy to reallocate vehicles to meet regional demand, thus maximising utilisation. To reduce costs, equipment that has a longer life-span than the normal vehicle replacement cycle, such as ladder racks, internal diesel heaters and additional seating, is recycled.

Network Rail receives revenue from three sources – grants from the Department for Transport and Transport Scotland, commercial property income, and track access grants from train and freight operating companies – and is regulated by the Office of Rail Regulation.

With public finances under tight scrutiny, Duffy says: “Our prime objectives are to drive down costs, improve on the quality of vehicles and ensure that we remain compliant of type approvals.”

No new initiatives are introduced without consulting trade unions and employees’ line managers for guidance, he says. “We have found that this is the best and most co-operative way to introduce and implement new ideas and innovations within the business.”

Recently, the fleet department has introduced a feedback campaign from vehicle users.

“We want to know about the suitability of vehicles in their defined role and the functional ability of the fleet,” Duffy explains.

“This will identify current deficiencies in specification and provide future-proofing for the fleet. The design of vehicles is being addressed and feedback sessions take place prior to any new vehicles being built.”

Network Rail has about 18,500 drivers and is working on the specification of a telematics tender. Technology has already been trialled and when the tender is awarded it will be one of the largest in the UK telematics sector.

The Network Rail fleet clocks up more than 130million miles a year, with an annual fuel spend of some £24million via the Allstar fuel card, so telematics will play a key role in further improving fleet utilisation and efficiencies.

The company’s ‘war on waste’ extends to minimising fuel use, with drivers directed to fill up at the cheapest outlet in their areas. Automatic alerts go to the fleet department if a fuel card is used more than three times a day or if more fuel is put into a vehicle than the tank capacity allows.

Additionally, knowing how vehicles are being driven will further help Network Rail drive down its accident rate – a further 9% reduction was recorded last year.

Network Rail’s 12 life-saving rules

Safety is a huge focus for Network Rail and as part of its “everybody home safe everyday” philosophy, it introduced 12 life-saving rules, some of which reiterate legal requirements: always wear a seatbelt while in a moving vehicle and always obey the speed limit; a ban on using mobile phones and programming any hands-free device while driving; and never drive or work while under the influence of drugs or alcohol.

In addition to comprehensive driving licence validation, Network Rail introduced other safe driving initiatives, including:

• Installing speed limiters across the fleet, including business-use only cars. The limit was initially set at 60mph for vehicles under 3.5 tonnes, but was raised to 70mph after feedback from drivers. Vehicles fitted with tow-bars are limited to 56 mph.
• Local-level investigations of speeding incidents and  accidents.
• Drivers who have two accidents within 12 months attend an Institute of Advanced Motorists’ driving course.
• Fitting onboard weighing systems to all vehicles above 3.5 tonnes and introducing the technology to all LCVs between 2.7-3.5 tonnes, so drivers know instantly whether their vehicle is overloaded.
• Fitting all vehicles over 3.5 tonnes with sideguards and Class V and Class VI mirrors to comply with new Transport for London regulations designed to reduce cyclist and pedestrian casualties.
• Specifying fall prevention rails for pick-ups, vans and lorries when staff are working at height.
• Advanced emergency braking system fitted on all HGVs – the technology is mandatory on all new trucks from November.
• Drivers of all vehicles required to reverse into depot parking spaces.
• Prismatic reflective livery on vehicles, which meets Chapter 8 of the Department for Transport’s Traffic Signs Manual for high conspicuity markings.

In making the Fleet Van award to Network Rail, judges were impressed by the focus on occupational road risk management, saying: “Network Rail’s 12 life-saving rules elevate the fleet above its peers. Incredible attention to detail across the fleet from automatic speed limits when towing to a faultless reallocation policy is aligned to sensible, practical thinking and results in huge costs. A worthy winner.”

Commenting on the triumph, Duffy says: “It highlights the hard work and effort the company has shown, and that we have demonstrated, with the choice of vehicles and design which shows we address safety seriously.

“It has been a busy four years, from when we changed from a leased to an owned fleet. We have learned, grown and demonstrated that we can manage one of the biggest and most complex fleets  in the UK and still deliver results to  our workforce.

“On a personal note, the award was recognition of how far we have come; the support and guidance that I have received from my peers has made me determined to deliver a safe and efficient fleet that we can be proud of.”

Network Rail is a member of the Freight Transport  Association-managed Van Excellence programme and recently achieved silver accreditation in the Fleet Operator Recognition Scheme.

Duffy believes such initiatives have a key role to play in raising fleet operating standards.

“We are active members and the organisations are of great importance to the road fleet team and the company. We can demonstrate best practice and benchmark  ourselves against other organisations. When members meet, we learn from each other and adopt initiatives which other fleets have introduced.”

Having moved into vehicle management “by accident” 15 years ago as a result of a secondment, Duffy’s advice for fellow fleet chiefs is this: “Trust your gut instinct; listen to your peers; and don’t be afraid to admit mistakes. If you follow that advice, you will be OK.”