Rising costs, new technologies and often confusing regulations means fleet management services for company vehicles has never been more challenging. Not surprisingly, businesses of all sizes now outsource the services of fleet management specialists. These are challenging times for the managers of company vehicle fleets. For those charged with keeping fleets cost-effective and compliant, and staying up with technologies, the responsibilities of the job have steadily increased.
“It is very difficult for any fleet operator to stay up to date on regulatory requirements, health and safety measures and strategies, fit-for-purpose analysis, and keeping a fleet mobile when assets are off the road,” explains Geoff Tipene, managing director of SG Fleet NZ.
It’s hardly surprising then that New Zealand’s leading Fleet Management Organisations (FMOs) can post a long list of the benefits of external fleet management services compared to internally managed systems. These include direct cost reduction and sophisticated reporting for better management. Ambrose Plaister, CEO of Fleetwise, puts the key benefits under the four ‘C’s’ of cost, consolidation, confidence and continuity. Fleet management services cover things like negotiating discounts on everything from tyres and servicing to fuel; centralised services; monthly reporting; monitoring compliance and servicing; and having one contact point for all fleet-related issues, such as accident or roadside assistance. However, he admits that it is difficult for external management services to drive change within an organisation. “If a business decides to outsource, there needs to be an advocate within the organisation to drive fleet initiatives and follow up on indiscretions such as speeding infringements.”
Once having decided to outsource fleet management services should businesses opt for a total package from one FMO or choose services a la carte from different providers? Tipene believes the days of having multiple suppliers are getting shorter. He says customers see the most productive way to manage a fleet and control costs is to be aligned with one supplier that can not only manage the fleet end-to-end but become part of the business they are managing. “At SG Fleet 99 percent of the time we deal with the drivers directly, leaving our internal contact free to perform their own duties.”
Plaister says the a la carte approach to fleet management services can be extremely demanding on a company’s time. One thing’s clear from industry sources I spoke too – if you’re going to more than one fleet management service provider, thorough research is paramount so an informed decision can be made. Perhaps the role of outsourced fleet management services is best summed up by FleetSmart’s commercial manager Brian Elmes – describing it as “very much consultative”. “From being a trouble-shooter of specific issues through to [providing] full blown consultancy services.”
Pain points
There are a number of pain points for fleet managers. FleetSmart’s Brian Elmes says historically those pain points have been cost control, plus centralised policies and procedures to ensure drivers’ needs are easily and consistently responded to without non-core distractions. We are seeing more organisations focusing on creating a balance between driving out cost, having a genuine fleet H&S focus and keeping staff engaged through using vehicles as a means to help drive engagement.”
Shane Millar, business development manager for Cartrack, says one area of concern is the changes within the Worksafe health and safety legislation and their impact on companies from a fleet perspective. “It’s trying to understand what their legal obligations are and what they need to do to mitigate them,” he says. “For smaller businesses this can be a real challenge as they may not have the resources of a fleet manager or someone who specialises in workplace safety. “Fortunately, telematics can play a large part in overcoming a lot of these new requirements very easily.” Telematics involves the use of wireless devices and ‘black box’ technologies to transmit vehicle and driver data in real time to fleet managers. Millar reports that cost containment – things like fleet utilisation, fuel costs and unauthorised use of vehicles – are also providing headaches for businesses.
The future of fleet management services
When looking at fleet management trends – one word that constantly appears is ‘telematics’. Tipene describes the advancements in technology is this area as “mind blowing”. “Seventy-five percent of our customers have some form of telematics in their vehicles. The data we receive and report on for customers is a real influencer in shaping the fleet for future use.”
Cartrack’s Millar says there is a lot of talk around predictive telematics analytics and how this can help driver safety. “For example, it can be an ideal tool for identifying high risk drivers. Information about driver behaviour can be used to determine how likely someone is to become involved in an accident as well as the associated costs with that risk.” Millar also comments on the future of autonomous vehicles and electric vehicles and how they will impact the fleet arena.
“Whilst it is great to see some of New Zealand’s leading organisations such as Waste Management, Air New Zealand and NZ Bus getting behind this this new wave of transport, the proof will be in the volume sector.” He believes the electric vehicle sector is on a real verge of exponential growth.
FleetSmart’s Elmes agrees that the accelerated rollout and mainstream acceptance of EVs will define the fleet management services market beyond in future. “The heightened awareness of environmental impacts, combined with rapidly developing technology, is driving acceptance of EVs as a viable alternative to the internal combustion engine.”
Ambrose Plaister predicts a surge in driver aid technologies such as adaptive cruise control and blind-spot monitoring – but not driverless vehicles. He thinks hybrid vehicles will increasingly find favour in large fleets, and there’ll be more vehicle sharing, in order to reduce the environmental impact of the nation’s business fleet.
One factor that won’t change – the need for expert fleet management services.
https://nzbusiness.co.nz/article/leaving-it-experts
Adrian Anderson
Thanks for the interesting and varied info, always a good read for anyone involved with company cars. I saw the Linked-In post about the Australian Fleet Management Association today too, the Auckland seminar looks valuable. Also took the time to review their website which is full of helpful articles and resources. I expect Crash Management keeps up with this but thought other readers might be interested in this related article at https://afma.net.au/fleet-cheat-sheet-selecting-the-best-vehicles/. Keep up the good work, our fleet certainly appreciates the high quality accident management services and other resources provided. cheers Adrian A
FLEET CHEAT SHEET – SELECTING THE BEST VEHICLES
Selecting the best fleet vehicles can present one of the greatest battles for fleet managers. In your role you have to not only keep you employees happy, but also consider a variety of other complex factors – notably meeting limited budgets and trying to provide ‘more with less’. First things first, do your research! The best strategy assesses all factors that can impact on budget, capital expenditure decisions, leasing options and cost of ownership. When choosing fleet vehicles, here are five top recommendations:
1. Use and operation
Whether you’ll be buying, financing or leasing your fleet vehicles, make sure that they are appropriate for the intended use.
Try to avoid being brand or manufacturer specific unless you have to, as this undoubtedly limits choice. Instead, focus on vehicle capabilities and performance to match your needs.
When determining suitability, it could be useful to consider:
• Size, style and carrying capacity – what are the people, product or equipment requirements that a vehicle needs to carry?
• Routing, roads and terrains – will the vehicle be used for lengthy motorway commutes, urban stop-start driving patterns or to be used for off-road jobs?
• Downsizing – does your organisation need a bigger vehicle or can you reduce unnecessary vehicle weight to reap valuable fuel savings?
2. Standardisations and specifications
Standardising specifications can be useful for determining suitability of vehicles for your fleet. These can include:
• Support for your corporate objectives, branding and image
• Employee satisfaction – an appropriate vehicle for the job
• Support maintenance, training and parts inventories
With the debate about diesel engine vehicles and their effect on the environment still rumbling on, high up on the list should be fuel type and emissions.
Alternative- fuelled vehicles are slowly infiltrating fleets – namely electric (EV) and electric hybrid (PHEV) vehicles including the new Hyundai Ioniq so keep these in mind for your operations.
3. Get your employees on board and ask for their opinions
It’s not unusual for fleet managers to allow a degree of flexibility within fleet vehicle selection – additional extras or ‘perks’ to boost employee satisfaction.
Embrace the opportunity to get first-hand experience from the people who will operate the vehicles. Get their honest opinions about how different vehicles could live up to the tasks that they need to perform.
Employee satisfaction tends to go hand-in-hand with being responsible and respectful towards the vehicle. however, it’s important that employee demand for these extras are aligned with company operational objectives.
4. Safety
If reducing accident costs is a high priority for your fleet, then it’s worth considering vehicle technologies that are designed to enhance safety and mitigate the potential for accidents.
A thorough cost-benefit analysis of those solutions can lead to more informed choices. Plus, it’s worth considering that better accident management might go hand-in-hand with a faster return on investment and lower costs.
5. Maintenance and upkeep
Maintenance can be a costly element of vehicle ownership so be sure to do your research into projected costs for a vehicle’s routine service needs, parts and labour. Check the warranty coverage to ensure that it will offset against projected repair costs.
Fleet maintenance software can be invaluable in reporting on vehicle performance, maintenance and costs to help influence future choice.
Conclusion
Given every fleet is different this list is by no means exhaustive. To help select the most appropriate vehicles for your fleet, these factors need to be considered and measured fairly against your business requirements. Fleet management software is an invaluable tool for utilising your fleet-related information to understand which vehicles match your business needs the closest, along with the use of telematics once you decide on the perfect vehicles for you needs.
Every fleet operation is different and so this list is certainly not exhaustive. However, if you want to select the most appropriate vehicles for your fleet, all of these factors need to be considered and weighed against your business requirements. Above all, remember to achieve the goal of getting the best value throughout a vehicle’s service life, whilst providing the right equipment for the job, requires sound and accurate knowledge. In terms of both initial investments and total cost of ownership, fleet vehicles are one of the most expensive purchases your company will make. It really is worth the effort to make sure that you select the best vehicles right from the start.
Crash Management
Thanks Adrian! We appreciate your generous comments and your support generally. We hadn’t covered that particular AFMA article but agree it would have wide appeal so will post the link on our social media pages. Thanks again, we’re grateful for your interest and in-put. Drive carefully! kind regards from The Crash Team