Do you think your organisation manages your fleet effectively? Fleet management isn’t just about getting the cheapest leasing rate or the best fuel discount, it’s a great deal more complex than that.
One provider we interviewed summed fleet management up in three simple words: people, planet and profit. “Where does your organisation feature on the policy continuum? Do you buy or lease vehicles to suit your people, or to appease the environmentalists and/or the shareholders?”
“Is an employee in your organisation up to the task of managing these complex issues?
“If you do self-manage are you getting the best value and performance from your fleet?”
Some organisations believe in self management using fleet management software packages while others completely outsource the functions to an independent provider.
Which is best? We asked various stakeholders in the industry to put forward their case and their opinion for and against.
Start with independent advice
When it comes to effective management of fleets, FleetSmart offers not only economies of scale but has the time and resources available to dedicate toward improving its product offering for clients.
FleetSmart manages 16,000 vehicles nationally and prides itself on being one of the largest independent fleet management providers in New Zealand. It offers a total package of vehicle procurement through to disposal with comprehensive reporting available. The key to this independence is that FleetSmart does not provide the finance for the vehicle, and is not affiliated to any one vehicle manufacturer.
“It is well publicised both nationally and internationally that it is often far more cost effective to outsource the fleet management function and pay a monthly fee for the expertise,” says Alan Roberts.
“In-house fleet management is often expensive and ineffective, because very few operations can afford to have a dedicated fleet manager, it’s often a secondary role that is allocated to a finance or human resources employee who may not have the expertise required to manage a fleet as effectively as could be done by an independent party. This is especially true when it comes to projecting whole-of-life costs.”
FleetSmart offers a range of products to suit fleet operations from as few as twenty vehicles to two thousand vehicles.
Those products include Poolbook which is an online web-based pool vehicle booking system, EcoFleet which helps a fleet monitor its ecological impact and has systems in place to help its clients monitor fringe benefit tax (FBT). FleetSmart also provides total cost of ownership (TCO) analysis for vehicle purchases, in order to project the whole-of-life costs for the fleet.
“Effective fleet management starts before the vehicle is even purchased, by comparing the projected whole-of-life costs of comparable vehicle options. In a recent survey only 21 percent of organisations buy based on whole-of life costs, but FleetSmart gives every organisation the ability to do so,” says Roberts.
“Recent feedback from clients also suggests that many private sector fleets now realise that the reporting of C02 emissions will become more important in the future. This is why all TCO reports include CO2 emissions and we provide optional CO2 reporting.
“EcoFleet is an important part of our business and has been adopted by the public sector at central, regional and local government levels. This is because the public sector wants vehicles that are not only environmentally friendly, but fit for purpose and offer the best safety features and we show this in our TCO information, making the decision making process simple and straightforward.”
Roberts states that FleetSmart constantly updates its technology to lead the market and offers extensive vehicle, cost centre and management reporting as well as a wide array of exception reports.
“There is no long-term value in telling our clients what they see today – our team of experienced Fleet Managers work to predict the future. The result is savings for clients.”
Integrated fleet management solutions
Fleet Direct provides an integrated online fleet management tool called “My Fleet” which is available to clients 24/7.
Director Nick de Zoete says the program has taken a few years to develop but delivers an integrated fleet management solution which can be managed in-house by the client or completely managed by Fleet Direct as part of a management package.
Fleet Direct offers four levels of fleet management package from selected fleet management services and road side assistance, to full operations management including risk management, accident management, procurement and disposal.
Fleet Direct says the standard, premium, premium plus and platinum plans are designed to meet the different and varying needs of private and public sector fleets.
Nick says that some clients like to retain some aspects of fleet management in-house and “My Fleet” has streamlined their day to day operation.
The recently introduced “My Fleet” pool car booking system” for clients running pool vehicles has had excellent results. By tracking both the vehicle and driver usage, fleet utilisation can be monitored at all times. For one client this has resulted in cost savings with a reduction of the total fleet and re-deployment between departments.
“The beauty of “My Fleet” is that it can also be used to maintain driver licence details and with links to the New Zealand Transport Authority, if there are any discrepancies with an employees licence they are quickly flagged by the system,” says Nick.
“The system also keeps an eye on the mileage travelled by the vehicles, particularly those that are leased, to minimise the risk of exceeding the allowance set down by the leasing company.
“We also advise clients with leased vehicles to monitor their physical condition regularly and fix any damage beyond the “fair, wear and tear” clause as end of lease rectification charges can be an unwanted cost.” he says.
With more than 20 years experience in the corporate fleet market, Nick saw the need to set up an independent fleet management company which could help private and public sector fleets manage costs and operations more effectively regardless of whether the fleet is owned or leased.
“Being independent of the manufacturers and finance providers also allows Fleet Direct to provide the client with an unbiased view of which vehicle and which manner of financing is the best for them to obtain to achieve their objectives.”
Get a better understanding of your fleet
LeasePlan managing director Charles Willmer says that it’s important for fleet operators to not only review their fleet management policy but also the relationships they have with any current providers.
Charles Willmer says that often large fleets are happy to manage the financing of their fleet but prefer to outsource the day to day management.
“Most private and public sector fleets don’t wish to hire the expertise of an in-house manager, then they need to get an understanding of where they are at which can be provided by an outsourced supplier.” he says.
Charles Willmer says that 35 percent of NZ company fleets use leased vehicles so it is important that they review their fleet management practise and policy with a range of providers to get the best value for their spend.
“Fleet operators need to sit down with a range of suppliers and get some consultancy,” he says. “Don’t be afraid to ask questions of your prospective provider and don’t be surprised if they ask questions of you which you may not have thought of.”
LeasePlan is introducing a new product to new and existing customers called FleetBalance. This system not only helps with the consultancy analysis of a fleet, it shows the future policy direction that the customer wishes to take, and whether it’s a people, planet or profit orientated one.
Willmer says that FleetBalance clearly shows the perspective that the customer has of running their fleet. The product was recently released at the LeasePlan Fleet Forums which were held in Auckland and Wellington and is part of its commitment to improving current product offering to existing clients.
FleetBalance finds the customers focus in fleet management by analysing the environmental, social and economic perspectives in a fleet.
“We ask questions of the key decision makers and then ask questions of the administrators,” says Charles Willmer. “This gives LeasePlan an insight into the customers motivation and allows us to map the gap in their fleet policy between actual and preference.”
Another new management product called Savings Accelerator will be released by LeasePlan in the first quarter of 2010. Charles Willmer says the product uses twelve cost saving levers to identify where a fleet can make better use of it vehicles and benchmark itself against other fleets.
“There are always better ways that suppliers can interact with customers’, says Charles Willmer. “Our view is that you don’t stop service delivery once the customer is signed up.”
Vehicle management solutions
FleetPartner’s chief operating officer Tony Williams says the company considers itself to be a provider of vehicle management solutions rather than just being a leasing operator.
FleetPartners offers solutions for a wide range clients ranging from those with one vehicle to clients with more than 1000 vehicles and the solution portfolio includes fuel management, accident management, sale and leaseback, finance leases, as well as traditional fully maintained and non maintained leases.
“FleetPartners offers clients a fully outsourced solution with a vehicle selection policy that includes a focus on the environment, safety, fit for purpose and whole of life costs,” he says.
“We offer competitive economies of scale that can be passed onto our customers through management of our suppliers and having extensive relationships with the manufacturers.
Williams moved to New Zealand from the UK and has brought 25 years of experience in the leasing industry and he holds a masters degree in risk management.
“There is no doubt that the six-cylinder vehicle is no longer the mainstay of the New Zealand company fleet and the average cubic capacity of our car park has certainly dropped.” he says.
“Customers have also become increasingly aware that the car is classified as a workplace, so their emphasis has moved to safety features and environmental performance.”
FleetPartners can measure a prospective or current fleet client’s carbon footprint and also review whether the vehicles are performing to policy expectations, be that fiscal or environmental.
The shift in the economic landscape over the past twelve months has seen FleetPartners extend many existing fully maintained leasing contracts from 36 to 45 months and they have also leased older vehicles back into the market after their initial lease has come to an end.
“The Econolease product has proved to be so popular with clients that some have formed their vehicle policy around it,” says Tony Williams. “We sometimes find ourselves with a greater demand for a particular used vehicle than we have available.”
He says the move by FleetPartners and other industry members to extend contracts was a win-win situation as it mitigated the residual value impact of releasing vehicles into a market where there was little demand for them.
“It also gave customers the confidence of fixed costs for an additional nine month period before they had to consider renewal.” says Tony Williams.
“Keeping those existing vehicles on a fully maintained operating lease also allowed the client to focus on generating revenue, which is more important than worrying about administering the fleet and its cost.
“FleetPartners can provide a fully outsourced service managing an organisation’s fleet budget and we will report the outcomes to the human resources or finance director while managing the entire procurement, running and disposal of the fleet.”
However did U-Manage the fleet before?
U-Manage is the fleet management software application that allows organisations to manage their own fleet efficiently and effectively.
U-Manage is unique in that it is a secure and private server based application, enabling users to access their fleet data from anywhere in the world, be that in the office, at home, on the road or even overseas. Current users include public and private sector organisations such as the AA Road Service, Department of Conservation and Department of Corrections – incidentally two of the largest Government fleets
Unlike other software packages which have to be purchased, the U-Manage package is leased to customers by FleetWorks. This means that customers receive the benefits of continual product improvements and updates, plus the monthly lease price is determined by the size of the vehicle fleet.
FleetWorks says that U-Manage allows a fleet operator to manage not only the vehicles but also other assets such as radios, fire extinguishers, first aid kits and other minor – or major- assets assigned to the vehicle. Service reminders for these assets operate exactly the same as for the vehicle they are assigned to.
According to FleetWorks, U-Manage is a simple and effective tool which can cater for ten to 3,500 vehicles plus it can also be used for heavy plant and machinery too.
U-Manage has been designed to handle both owned and leased vehicles, it can report vehicle distances, it will remind the users when WOF, vehicle licence, and Road User Charges are due to be paid, it will also prevent unnecessary servicing and produce customised reports if the format of the .
Electronic data from a fleet’s fuel provider is also uploaded to the U-Manage system as part of the service, by FleetWorks.
“If you want to manage your fleet more cost effectively, often the skills and talent within your business or organisation can be a better and more practical option than using an outside provider,” says FleetWorks National Sales Manager Andrew Timpany.
“U-Manage is a viable alternative to the status quo offered by leasing and fleet management suppliers. One case study of a client identified a potential $100,000 saving by bringing their fleet management in house.”
FleetWorks offers full onsite training to all new U-Manage clients to ensure that key users understand how to use and operate the software. Full support is available from an online manual and a help desk email and phone is available during office hours.