Table 1 - Strategies and policies for acquiring and specifying vehicles

Key influences include:

Business objectives
Supplier deliverables
The economy
Taxation
Technology

Commercial vehicles

Due to round table attendee background our discussion was focused towards fleets composed of commercial vehicles rather than user-chooser specific fleets

Key considerations

The practicalities surrounding unique and specific business objectives and priorities remain the key consideration for any commercial vehicle procurement based decision making. Current focus remains on:

  • Reduce costs associated with fleet
  • Efficiencies around Optimal fleet size

Key core procurement objectives focus on fleet operational requirements:

  • Greater sophistication and appreciation of Whole life value Vs Whole life costs
  • Available resource and capabilities
  • Coverage of dealer network
  • Service requirements around

Specific aspects of the contract where additional savings can be made. For example, terms surrounding accident management within lease agreement.

Interest around greater knowledge and value gained through telematix as a means for fleet to better understand the priorities and vehicle engagement with vehicles was also discussed as a greater means to understand and get value from drivers and vehicles. Rather than specifically seeing the tool to control driver behaviour.

Main causes for manufacturers to lose share on fleet choice lists.
Commercial fleet decision making are not necessarily focused on limiting brand consideration. Fleets are limited by:

  • Choice surrounding commercial vehicles availability
  • Specific vehicle and parts capabilities
  • Appropriate levels of leasing services
  • Greater knowledge of business and supplier capabilities through industry days help get a better understanding of a supplier existing and potential capabilities

A number of examples were cited of supplier and leasing company walking away from procurement process due to appropriateness and attractiveness of contract discussions.

In summary the main trade off remains focussed on the long term mutually beneficial supplier and fleet relationship and short term profit considerations.

Table 2 - Leasing relationships – managing efficiencies

Overall the relationship between the large fleet operator and the leasing company is based on increased flexibility to enable the fleet to realise savings and ensure that the driver is ‘self-managed’

The requirement is a collaborative relationship that enables the fleet to optimise actions taken, often with limited in-house resource.

The relationship with the driver is to allow then to ‘self-serve’ on maintenance and to access a range of cars to choose from via a digital choice list.

The key focus for fleet operators is to:

Rationalise manufacturers

  • Benchmark leasing supplier rates
  • Greater analysis of data, emphasis on mileage
  • Reduce SMR costs
  • Improve Grey Fleet Management, (exit cash allowance)

New Initiatives

  • Reduced early terminations costs: rationalisation of choice lists on brands and models to enable vehicles to be reallocated easily.
  • Negotiations with leasing companies include a return of vehicles without termination costs capped @f 1% per annum.
  • Open book settlement on all early termination vehicles..
  • Removed opt out clause for perk drivers
  • Removed cash allowance options.
  • Introduced option to trade down car to reduce co2
  • Introduced driving licence checking.
  • Introduced mileage audit: quarterly to enable vehicle contracts to be renegotiated.

LCV specific leasing initiatives:

  • Introduced telematics to measure mileage, this has helped reduce insurance premiums.
  • Drive down maintenance costs, measurement at a driver level of SMR costs.

 

Table 3 - Vehicle utilisation

It was felt that improving driver performance was the biggest contributing factor for achieving effective vehicle utilisation. It felt that traffic light systems and eco driver training are directly linked to improving the usage and life of the vehicle.

Other key areas included;

Telematics;

It was discussed how telematics are thought to be key to improving vehicle utilisation however some key issues were highlighted with implementing the technology;

  • It was felt that the technology still has some way to go before it can offer a complete user friendly solution.
  • The amount of work needed to analyse the data is felt to be a real issue.
  • In-vehicle technology is advancing at such a rate, soon the cars themselves may offer just as much information.

Reducing spare vehicles

Reducing the amount of spare vehicles on a fleet was felt to be a key part in improving vehicle utilisation.

Effective route planning

Delivery companies in particular, it was thought, have most to gain from effective route planning, either by using technology or avoiding certain areas or times of day.

Standardising the vehicles on the fleet

It was felt that moving vehicles around to different sites and premises would be a lot easier if the fleet was standardised to one type of vehicle.

Downsizing

By downsizing the vehicles, the companies at the table had seen some significant CO2 savings, however, it should be done with caution and balanced with residual values.

Extended cycles

It was felt that although extending cycles can offer some short-term cost benefits, the downside of maintenance costs and residual values can sometimes cancel these out.

Vans that are modified to include equipment can sometimes be forgotten when extending the replacement cycles and the maintenance costs for the equipment can sometimes substantially add to repair bills.

Table 4 - Road risk policies

Key messages

Culture is key - A business-wide commitment to reducing risk and taking safety seriously requires understanding and support from every area of the business.

Measure Incidents not Accidents - For a real picture of fleet risk, don’t ignore minor bumps and scratches

Data is critical - gather and share information and encourage drivers to report every incident, no matter how minor.

Education is a priority - managers and drivers must be kept informed about the importance of safety, ranging from inductions for new joiners to encouraging departmental competition through league tables.

Technology is an enabler - From fleet management systems to basic electronic licence checking, technology has a vital role to play in reducing incidents.

Good processes make a difference - Implementing clear processes when handling incidents can generate substantial savings, particularly in slashing third-party claim costs.

Detail

Culture is key – Safety needs to be second nature in a business, but in some companies drivers may see taking risks or having accidents as a badge of honour or a source of amusement. Others may always see it as the fault of other drivers and aggressively resist any attempt to talk about consistent patterns of accidents, sometimes highlighting the value of their work compared to the cost of any incidents. A fleet manager can’t change the culture of a business, it requires the support of top management and departmental heads to consistently reinforce the safety message over many months and years, so that drivers understand safety is a priority and everybody has to be safe on the road.

Measure Incidents not Accidents

Fleets which have made the most progress in reducing risk and damage costs on their fleets tend to have the same approach. Every incident is recorded, so that patterns of risk can be analysed. For example, a driver who has lost three wing mirrors in as many months can’t be just dismissed as unlucky or the victim or other motorists. Something is causing those incidents and it needs to be addressed.

Data is critical

To understand the full story about risk, fleets need to know everything that happens to vehicles on the road, from a minor scratch or bump right through to every crash. Drivers need to report everything, so that data can be gathered, shared and analysed. In many large fleets, this requires the support of an external incident management company, which can use its resources to analyse the information and provide management reports that focus attention on problem areas and key trends. This information can then be cascaded throughout the business.

Education is a priority

Providing information to drivers and managers is a key method of reinforcing the safety message and it can also help with long-term cultural changes in a business. Data can be used to generate department-specific league tables, which can focus on priority areas that will change behaviour, ranging from incidents to the length of time taken to report a crash. By taking a long-term focus, a company can also ensure that new employees are educated about safety through inductions, assessments and on-going training,

Technology is an enabler

Technology can automate many parts of the risk management process, particularly when it comes to the basics that are fundamental to running a low-incident fleet. Electronic licence checking can deliver substantial time savings to a business and quickly pin-point risks, such as drivers who inadvertently are unlicensed because their photo-cards have become out of date. Telematics technology has proved its worth to van fleets and now car fleets are considering how certain elements may be implemented, such as proactive service warnings. One of the biggest opportunities may lie in smartphones, which can be used to automatically provide feedback to drivers about safety issues related to driving, including their performance on the road.

Good processes make a difference

In the event of an incident, good processes play a critical role in keeping costs down, especially with the growth in the cost of third-party injury claims. If drivers follow a simple process after an incident, they can keep costs to a minimum. An example may be issuing ‘bump cards’ to drivers. These can be handed to a third-party, offering them help and support with accident costs through the fleet’s own insurers, so expenses can be managed. If a third-party claim is managed immediately by the fleet’s insurer, costs can be a fraction of what they might be if left for even a few days, during which time third-party claim companies could get involved.

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