Fleet costs are under greater scrutiny than ever before. In some organisations fleet operators aren’t just feeling the heat from senior managers, they are being asked to justify their spending to the head of the company.

One fleet operator told Fleet News: “Managing costs is my fleet headache. The business is under pressure and I’ve had the CEO asking lots of questions. He’s been asking if we can do things differently on the fleet.”

The need to save money was highlighted in the recent Fleet News Confidence survey.

The results showed that 80% of fleet operators reduced their spending last year and 82% intend to reduce spending this year.

But the question is – how are fleet operators achieving this?

To obtain a copy of the Fleet News Confidence survey, email Sarah.tooze@bauermedia.co.uk

Accidents

Managing accidents is high on many fleet managers’ cost-cutting agenda, with several operators deciding they need to manage the third party in at-fault accidents.

“Accident costs are a constant battle for us,” says Christopher Dean, supply chain manager, McGinley Recruitment Services.

“Last year we worked closely with accident management providers to try and reduce vehicle off-road time and actual bent metal costs. We also introduced a policy for credit hire and third-party capture to try and keep our insurance and damage costs to a minimum.

“It has certainly stemmed our costs and it has helped us control and better understand where the costs are coming from.

"We’ve got a good set of data now to show us where the problems are.”

For other fleet managers cost cutting has meant reducing spending on driver training. One survey participant has ended a 10-year driver training programme.

Which begs the question: is cost cutting ultimately good for the fleet? Or could it lead to neglect in areas of fleet management?

Fuel

With fuel prices creeping up again, fleet managers are paying close attention to their fuel spend and looking at ways to reduce their bill.

Communication continues to be key, with fleet operators encouraging drivers to avoid harsh braking and acceleration, as well as giving tips such as turning off the air conditioning, as using it can increase fuel consumption by up 10%.

Besides promoting eco-driving, some fleet managers are opting for more creative solutions.

One survey participant has decided on fuel hedging.

Essentially this means they have an agreement with a financial institution to fix the price the company pays for fuel for the rest of the year.

This could bring the fleet substantial savings if fuel prices rocket like they did last summer.

Encouraging drivers to fill up at supermarkets is another method for reducing fuel spend. The price of fuel tends to be lower at supermarket forecourts.

Leigh Stiff, at Hannaford, is one fleet manager advising drivers to buy more fuel from supermarkets.

Setting up a league table and incentivising drivers can deliver results, as seen by the Inspired Gaming Group fleet.

Group fleet manager Gary Black says this has led to 91% of fuel being purchased from supermarkets.

Emissions

In light of the capital allowance changes which came into force in April this year – bringing tax benefits to vehicles with CO2 emissions below 160g/km and 110g/km – it’s no surprise that more fleet managers are putting a cap on emissions.

Besides the tax benefits, capping emissions can bring fuel savings as lower CO2 cars offer better fuel economy.

Several fleets are opting for a cap of 160g/km of CO2, such as Marie Jarrold, car fleet controller at BCA, and Alan Legge, fleet and facilities manager at BSI. Legge says that as a result the average emissions of BSI’s fleet is now 157g/km and is predicted to be 152g/km by the end of the year.

Incentivising drivers to choose lower emission cars is a tactic some fleet managers are adopting.

For instance, Julian Daley, reward manager at Carlsberg, says the company offers ‘green incentives’ as part of its employee car ownership scheme.

If a driver chooses a sub- 140g/km car they receive a 10% uplift in their allowance. This has resulted in around 70% of new car orders being below 140g/km.

National Grid is another company incentivising drivers. It offers them an additional 15% on their monthly allowance if they opt for a vehicle emitting 120g/km or less.

Daily rental

Changing rental supplier, encouraging car sharing in rental cars and making sure that the “right” car is rented are some of the steps fleet operators are taking to reduce their daily rental spend.

BCA, for instance, has restrictions in place on the type of car rented, with the majority of staff limited to 1.4-litre models. If they want an upgrade they have to explain why and supply details of their journey to car fleet controller Marie Jarrold.

She also says employees car share where possible. If there is a conference, for instance, they travel together in a daily rental car rather than using separate private vehicles.

Other fleet operators are trying to avoid daily rental entirely. One reader, who took part in the Fleet Confidence survey, says: “I try to do without daily hire where possible and if there’s a vehicle on site we’ll use that instead of renting.”

Another operator has decided to restrict the number of daily rental suppliers he uses, which is expected to save the company several thousand pounds.

Mileage

Closely linked to fuel spend is mileage management and this is another area fleet managers are looking at to reduce costs.

It can be as straightforward as asking drivers whether their journey is necessary. But for fleet operators that need to have vehicles on the road daily other ways have to be found.

This has been a challenge for Rob Paddock, distribution and logistics manager at the
Commercial Group, which distributes stationery and office equipment to more than 2,500 customers.

He developed a dynamic routing system which allowed him to remove two van routes and cut the mileage travelled by the other vans.

David Graham, fleet manager at E.ON, has turned his attention to mileage management too, creating realistic mpg figures for the company’s van fleet.

Managers are then able to compare the mileage their drivers are achieving with the figure the company believes is achievable.

This has caused drivers to think more carefully about their journeys.

Another solution is van sharing. Christopher Dean, supply chain manager at McGinley Recruitment Services, has been looking at different ways of getting the agency’s workers to locations.

“It’s about sharing the resource,” Dean says. “Rather than three vans going to one site, only two vans are used.”