Your views on fleet issues: corporate manslaughter and vehicle disposal

“The management of occupational road risk and the associated impact of the Corporate Manslaughter Act is now placing increased responsibility on operators to implement initiatives to effectively manage driving at work.

“Organisations seem to be implementing vastly different approaches to this, ranging from in-house training to out-sourcing control measures altogether.

“At Gateshead Council we have introduced an in-house process of driver assessment and training that was developed involving partners such as the Driving Standards Agency and the police.

I anticipate that the requirement to be more proactive on such issues will continue to grow in the future.”

“Companies that have been wavering in their attitude to occupational road risk may now, I hope, view the new corporate manslaughter legislation as the stimulus to kick-start the implementation of duty of care measures, to protect their own staff and other road users.

“Those fleets that have to date turned a blind eye to conducting an audit of their fleet vehicles and drivers may now introduce robust duty of care measures and finally take action.

“In recent months we have experienced an accelerating demand for information on managing occupational road risk and the new legislation is bound to further increase that demand.

“Some fleets have tended to take a laissez-faire attitude to safety because they believe the government’s bark is worse than its bite. However, publication of the Act and its implementation in April next year will focus increased business attention on a vital fleet issue.”

“A lot of minds are currently focused on the likely impact of impending legislation on fleet policy.

“Forward-thinking fleets want to be ready when the Corporate Manslaughter Act comes into force next April, and also to be able to prepare for the proposed CO2-linked Approved Mileage Allowance Payments (AMAPs) regime.

“If, or rather when, a driving-related corporate killing case does go to court, the Health and Safety Executive’s Guidelines on Managing At-work Road Safety will be a key yardstick for the jury.

“It’s essential that fleets familiarise themselves with the HSE recommendations and adapt their risk management activities accordingly.

“At least fleets now know the way ahead on corporate killing. Everyone remains in the dark on the future of AMAPs, and this is making it very difficult to plan long-range travel and benefits strategies.

“What we do know is that CO2-linked taxation is just one of a raft of green issues that already need to be factored in to fleet thinking.

“Other factors include vehicle technology, fuel choice and the use of private versus company vehicles for essential business journeys.

“This will be a key area for policy reviews for businesses in the next 12 months.”

“For firms who already have a comprehensive fleet risk policy, the introduction of the Corporate Manslaughter Act will have minimal impact and they should continue to reinforce their existing systems and regular reviews to assess any areas for improvement.

“The real aim is to enable a greater focus on those companies currently failing to address HSE work-related driving regulations. Avoiding responsibilities can now place an entire firm in the firing line.

“The ‘grey fleet’ is not exempt and could be a potential sticking point for fleet managers. Without a clear policy to monitor mileage, driving hours, condition of vehicles and driver behaviour, firms could be leaving themselves exposed to potential prosecution.

“Fleet managers need to understand all of the vehicles driven on their firm’s business and their capabilities. A good manager will have a clear understanding of the nature of driving at every level and how this impacts on the driver.”

Vehicle disposal

“Corporate fleets that fail to professionally manage vehicle disposal and invest in refurbishment will see used car and van values decline and sales become increasingly hard to achieve.

“Increasingly, professional defleet operations are investing in ensuring vehicles are in ready-to-retail condition. They are also increasingly embracing the array of new routes to market, including more online channels.

“Fleets that fail to take similar steps will be left in the slow lane. Vehicles that are defleeted efficiently and have refurbishment work carried out are in strong demand. But buyers are become increasingly fussy over high-mileage vehicles and those in poor condition because of the wide choice available.

“If fleets are really interested in maximising disposal values they must invest in refurbishing vehicles to a set standard, make condition inspection reports available and put digital photographs online.

“At the moment, I don’t see many fleets prepared to make that commitment because, despite having millions of pounds tied up in vehicle operations, they generally view the fleet as a non-core activity.”

“We’re increasingly finding, especially with the top-end executive marques, that size really does matter when it comes to alloys wheels and residual values.

“Buyers have come to expect alloys to be fitted to premium brands, but we are finding that they are specifically looking at the design and size of the wheels, and are willing to pay a premium for the more appealing ones.

“If a vehicle is fitted with 17-inch alloys as standard, buyers are looking for desirable 18-inch or even 19-inch rims as they help to make the vehicle stand out.

“Leather is always desirable, but we are now finding the technology regularly fitted as standard in the top-end brands is filtering down through to the more volume models. As a result residual values, for vehicles in all segments, are much stronger when this option is fitted.”

…and wholelife costs, fly tipping and core skills

“Our research is highlighting an interesting dichotomy facing the industry.

“On the one hand, we are seeing the increasing complexity and escalating corporate demands of managing a fleet, driven in no small part by duty of care and the increased prominence of green issues on the political agenda.

“The challenge of these emerging issues is compounded by the fact that, in parallel, we are seeing a gradual but persistent decline in the numbers of both full and even part-time fleet managers, with those responsibilities fragmenting and being transferred to other areas within the company.

“Given this backdrop of a growing amount of legislation and even tighter enforcement with regard to vehicles and corporate governance, dispensing with the fleet manager could pose a self-inflicted and unnecessary risk.”

“We have noticed a sharp increase in the number of companies going out to tender for their fleet finance and management requirements.

“In most cases this has arisen after their current suppliers have been taken over, though in others companies have simply been looking to cut costs. One was because their current supplier didn’t return their phone calls fast enough!

“In most cases they have ended up with win-win deals and have gained the biggest cost-savings by changing how they fund their cars – they haven’t needed to change suppliers.”

“Traffic congestion is an issue that greatly concerns our customers. Congestion costs the economy around £17 billion a year, the majority of that borne by individual fleet operators whose drivers spend around 70 days a year on the road, with 10% of that time wasted in traffic queues.

“But there is now a solution in telematics, which can mitigate the environmental impact of cars by allowing more efficient routes and avoiding traffic hold-ups.

“Until recently, real-time electronic tracking and monitoring of vehicles to minimise downtime was in its infancy.

“But satellite-based and mobile-phone-linked tracking and web reporting systems are now so sophisticated that they are available to SMEs.

“And they can really help in running a greener, more economical and safer fleet.”

“The availability of cars remains an issue, which has made manufacturer relationships vitally important.

“Also, high fleet utilisation levels across the industry means responding to last-minute reservations becomes more of a challenge. Clearly, the very nature of vehicle rental often makes it a ‘distress’ purchase but we are working with customers to plan demand where that’s possible while ensuring we continue to service those reservations that will always be unpredictable.

“Notably, short-term van rental demand is buoyant and again availability of product continues to be a challenge for us.

“White van man is alive and well.”

“As a result of the proposed tax changes, sensible car fleets can no longer ignore tax when considering the wholelife costs of their fleet cars.

“Making the right decisions in car selection will become crucial as it is possible that 166-180g/km cars will no longer be cost-effective for fleets.

“Decision-makers who believe that cash alternatives are the answer are mistaken, since I expect that HM Revenue & Customs will discourage proper business drivers away from the more complex car scheme arrangements.

“After April 1, 2008, I expect that most companies will be better off leasing cars up to 165g/km rather than buying them. The jury is out on cars which emit more than 166g/km because until we know the exact rules we cannot model them.”

“The main project which I have devoted a lot of time to over the last few months has been electronic stability programmes. I have completed a couple of courses now using this feature, and am totally convinced it is a life-saving device which all manufacturers should offer as standard on all vehicles.

“I also feel that there should be both more publicity for this facility and a lot more instruction on its use and facilities given to customers on purchase. The general handover consists of ‘the light needs to be out on that button, and you don’t need to touch it’. Wow, what a lot we could learn from that!

“I am pleased to say that I have negotiated with all manufacturers on our choice list to offer this option free of charge, where it is not already fitted as standard.”

“In recent months the tyre industry has been taking a close look at fly tipping of tyres and has become increasingly concerned about illegal fly tipping on tyre centre premises by unscrupulous dealers trying to pass off their financial and environmental responsibility on the legitimate tyre trade.

“The NTDA recently carried out a survey of members which revealed that this type of secondary tipping is on the increase and is costing the trade millions of pounds in additional disposal costs.

“The tyre trade, tyre manufacturers and customers have a joint responsibility for responsible disposal of tyres and fleet managers should not baulk their responsibility by resisting the minimal charges made by suppliers to help cover some of the cost for this vital service provided by the trade.”

TIM HUDSON
Commercial director, LeasePlan UK

“We’re seeing the core skills in the industry changing quite considerably at the moment. The leasing market in the UK is probably the most mature in the world. Because of that, the expertise built up here is impressive – most fleet companies can boast authoritative voices on a whole range of issues, from purchasing to disposals and everything in between.

“With that expertise almost taken for granted, the market is starting to put a lot more emphasis on general business acumen and wider customer service skills. To fill that need, people are coming from outside the industry, often at very senior levels, bringing with them a host of transferable business skills.”

“On an industry level, the biggest challenges for fleet operators continue to centre around choosing and managing the right supplier and deciding on an appropriate funding method.

“Key decision-makers are concerned more than ever by costs and profits, employee engagement and the alignment of objectives when it comes to choosing a leasing organisation.

“Of course, all of these matters are impacted upon by vehicle funding, policy choice and supplier quality.

“Fleet operators should look at their own buyer and supplier management practices and ensure they follow proven criteria and professional practice. In doing this, consumers will be much better positioned to ensure their most important business objectives are achieved and that their fleets have the best possible management practices available to them.”