Total Fleet Management

With modern businesses cutting costs and overheads, retrenching and being mindful of expenditures, it’s a wonder that any company can justify having a staff member who is solely responsible for the maintenance and operation of a company fleet.

However, it would seem that there are companies where this is in fact the case, despite the availability of businesses whose sole reason for existing is to maintain other company fleets.

In the first case, where a staff member is dubbed the fleet manager, it is quite often the case that managing the fleet is not his or her sole responsibility.

Generally speaking, the role of the fleet manager is not a position you would find on the likes of NetCheck, Seek or Monster.com.

It is however, a title that some might see on a CV from someone who was dissatisfied with being given a largely thankless job on top of everything else they had to handle.

No, the fleet manager generally is the person who either:

has done it before, has an interest in cars or was the individual who just didn’t get out of the way fast enough when the position was thrown at him/her.

That’s not to say that the fleet manager’s role is not a worthy position - far from it.

From the smallest fleet to the largest, having someone able to exercise a degree of control over your company vehicles is definitely an asset.

Unfortunately, the business of managing fleets is a full time occupation and most of us are too stressed doing what we were originally paid to do to worry about the welfare of the fleet.

You see, fleet management can be summed up by breaking down a series of elements.

There’s buying the vehicles in the first instance, and that has to take into account a knowledge of staff driving proficiency, their respective positions and incomes within the company structure, plus having a sound knowledge of which vehicle is best suited to the company needs.

Then there’s arranging lease agreements, insurance, warranty issues, the setting up of company fleet policies in respect of legal actions and responsibility, damage liability, OSH regulations and guidelines, the Privacy Act for the information a company can and should be holding in respect of its drivers, maintenance standards and times, monitoring and co-ordinating vehicle use as well as recording and analysing the day-to-day cost of running a fleet and the list goes on and on.

It is for this reason that so many companies exist to take onboard some or often all, of these responsibilities. And those companies do it very well, taking complete or limited control at the fleet owner’s discretion.

Outsourcing is not necessarily what every company wants, but we’ve already explained some of the challenges facing an in-house fleet manager.

Yes, it can be done and yes, there are computerised systems in place for autonomous fleet management, but even so, it requires a solid knowledge base on the part of the in-house fleet manager to make it all work properly, effectively and efficiently.

With the variety of fleets in the New Zealand market, it’s not fair or reasonable to expect every fleet to outsource which also explains why there are so many options out there to help out the in-house fleet manager.

And it’s fair to say that the in-house fleet manager appreciates ease and simplicity in fleet management which is why specialist software packages are available.

With the advent of the internet, fleet management companies have been able to give their clients more access to information about their fleets. This ensures that, whilst the fleet management is being done externally, a manager/company can keep an eye on how their vehicle assets are being utilised.

Key Access is Custom Fleet’s online data management and reporting tool, providing clients with 24 hour, 7 day-a-week access to their vehicle fleet information via a secure, pin number protected link.

Key Access provides access to both standard reports and a highly flexible Customised Report Writer.

The pre-defined reports available include services due and overdue and kilometre deviation reports, while the customised report writer has the ability to select individual attributes which then can be used to generate tailored reporting.

This access also gives the user the ability to transfer vehicles and/or drivers and to create new drivers and/or cost centres, as well as ordering new vehicles.

Vehicle queries (on a particular vehicle) can also be made. This report allows the user to access all pertinent fleet management information relating to each individual vehicle eg term, kilometres, service history, tyre consumption, etc.

Key Access has been designed to be easy to use to ensure that it is a useful tool for all Custom Fleet clients. Custom Fleet account managers are all fully trained and able to provide demonstrations to their clients as required.

But computer software is frequently only half of the package the fleet manager needs to run the fleet effectively.

The other half of the package is recognised to be card-based purchasing and reporting systems.

For the smaller fleets, the cards can be as basic as company fuel cards from the major oil companies.

This ensures relevant fleet management data is collected, allowing fleet managers to analyse the way vehicle assets are being utilised.

The data collected includes mileage, amount of fuel used and how often the vehicle is being refuelled. From this data a number of conclusions can be drawn, for example: how fuel efficient is a vehicle; what mileage is the vehicle doing each week/month/year; is the vehicle being utilised the way it should be; and so on.

Most major oil companies provide fuel cards for use by companies. The company usually has the ability to restrict the products able to be purchased on a fuel card to the following:

• Fuel and oil only - allowing the driver to purchase fuel and oil but does not allow for other purchases from the service station.

• Fuel, oil and carwash - as above, but also allows for the purchase of carwash services.

• All purchases – meaning there are no restrictions on what can be purchased.

Most cards now allow for the use of a pin number to enhance security. This ensures the correct person is using the card and gives the driver the convenience of using EFTPOS at pump where it is available.

There are companies able to use multiple fuel cards and leave payment up to the accountant to balance up at the end of each month. Effective in-house procedures for monitoring fuel use from one to six cards can easily be built into the monthly duties of the accounts person.

When the fleet gets a little larger however, you’ll need to free up the accountant’s time and that’s when the true benefits of cards which act as plastic fleet managers really come into their own.

The Caltex StarCard (StarCard) for example, offers a convenient and effective way to manage company fleets.

This fleet management system is adaptable to company’s needs with a variety of control and usage options to choose from. What’s more, it is designed to provide greater security and added value in managing a company’s fleet. StarCard is definitely a smart choice for the smart fleet manager.

StarCard takes security one step further than any other New Zealand fuel card providing a 100% electronic network with no merchants transacting solely manually, and for added security all StarCards require a pin.

StarCard also provides value to companies by being the only fuel card to provide no transaction fees as standard.

Fleet managers can free up time and manage their fleet 24/7 using StarCard Online.

At a touch of a button fleet managers can monitor fuel consumption, maintain card fleet and review billing information - providing control and instant visibility of the fleet.

Of course, the oil company cards are great for fuel, oil and other vehicle –related purchases and the occasional emergency milk top up for the cafeteria, but there are other cards which take fleet management by card to a whole new level.

FleetSmart (a division of Cardlink) has set up outsourced fleet management solutions supported by Fleet Card and Dual Card.

FleetSmart describes its Fleet Card and Dual Card as New Zealand’s only multi-brand card solution supported by 6,000 automotive merchants and a 24 hour, 7 day a week accident and emergency breakdown service.

FleetSmart’s fleet management solutions also utilise data extracts from all other major fuel cards if customers have a preference to use a specific fuel card.

Fleet Card and Dual Card are designed to consolidate vehicle related expenses into one all-purpose fuel management card. Customers receive a summary of their expenses on a single, monthly tax invoice. Customers can also access e-CMS, an internet based card administration service.

FleetSmart’s fleet management software has been developed in-house by Cardlink’s software development team and provides proven fleet management reporting and integrated billing formats that can be accessed electronically, online or in hard copy formats. These reporting formats provide accurate fleet summary for our customers e.g.:

• Vehicle running costs compared to national averages.

• Grouped reporting by geography, division etc.

• Comprehensive exception reporting to identify cost or performance improvements.

• Other specific information requirements requested by customers.

And following on from clever card systems and linked software programs that are the next logical step up, you start playing with the big boys, and the stakes get a little higher.

Suddenly, your accountant can’t cope with the whole fleet thing and then you start tying up other staff members who try to run the fleet by committee.

It’s very seldom that this works harmoniously as humans generally foul things up when a group try to to get their heads around one idea/concept of how to get a solution to work.

At this point, it’s time to call in the experts – this is where you look outside the building to find the right people to help you look after your fleet.

As mentioned earlier, you don’t lose autonomy if you don’t want to.

It sounds altruistic, but the outsourcing companies will do what you tell them to. You are the customer after all, and we all know that the customer is always right, especially if that customer is paying directly for another company’s services!

Now, we mentioned that the level of control is entirely up to you. Depending on which company you choose to mind your knitting, you could have an advisor who might just help you with fleet vehicle selection.

Perhaps he or she can advise on the maintenance aspects of your fleet operation – but think about this – considering that you are retaining the outsourced companies services anyway, why not quieten down the bean counter and determine from the poor guy/gal who has been going mental running the fleet, tell you where the major headaches are?

Running the fleet may have been a larger drain on staff resource than you know and besides which, it is a great deal easier to look after 90% of the aspects of running a fleet than it is to run 10% of it – ask your fleet manager!

Owen Kinnaird, GM of sales and marketing for FleetSmart says "our experience in managing significant fleets provides accurate cost benchmarking that is then applied to our customer base. This ensures ongoing market competitive pricing and service from a myriad of fleet suppliers including vehicle manufacturers, finance/lease providers, service and maintenance providers, accident and emergency support and fuel providers".

FleetSmart provides outsourced fleet management to significant corporate and Government fleets including Telecom, Auckland City, ACC, National Bank of New Zealand and Transfield.

FleetSmart’s cost and service benchmarking is ongoing for all FleetSmart customers.

"Ongoing market competitive pricing is achieved through continuous evaluation of all fleet suppliers on behalf of our customers" says Kinnaird.

FleetSmart’s experienced fleet controllers proactively manage their allocated fleet customers.

They are all A-grade mechanics with extensive knowledge of all facets of fleet management for both owned or leased fleets.

"All vehicle purchases, finance/lease options, repairs and maintenance costs are evaluated on behalf of our customers by FleetSmart’s fleet controllers ensuring no cost overruns occur."

Customers receive one consolidated monthly invoice from FleetSmart. All fleet related costs can be integrated into this invoice through data extracts from fleet suppliers. "One monthly invoice from FleetSmart provides significant administration and processing savings to our customers".

And while the day-to-day tasks of running a fleet can often be solved by outsourcing, there are some steps that can still be taken by the company owning the fleet.

"While vehicle leasing is still the most popular form of fleet management, Custom Fleet has recognised that a fleet management only service is still a viable alternative for those companies that wish to retain ownership of their vehicles", explains Barry Nicholson, national manager sales and customer service for Custom Fleet (NZ) Limited.

"We have recently finished a full revamp of our Fleet Management Services product, to ensure we are offering a full range of services which can be tailored into a package to suit all companies’ requirements."

"We see our focus on fleet management, as a whole, and the variety that our package can provide, as being the key to providing better service," continues Nicholson.

Those looking to outsource their fleet management should take into account that the outcomes of effective fleet management should be in the form of measurable benefits including:

• real cost reductions

• reduced administration costs

• savings through preventative measures

• maximised performance and asset functionality

• meaningful reporting identifying issues and solutions

• practical and cost effective solutions

There are also various fleet management options available - from management services only, right through to a full operating lease.

For example, a company may only require a basic fleet management services package including: maintenance management, fuel management, management reporting and registration management.

To this they may decide to add insurance or accident management services, vehicle acquisition and/or disposal, or possibly even Driver Training.

And while all of the nitty gritty of fleet management is largely concerned with number crunching, there is bone crunching to be considered as well.

OSH regulations are now extremely stringent and any company that attempts to ignore or underestimate its responsibilities as far as OSH is concerned is looking for trouble.

A Safe Vehicle Policy as can be found through the Land Transport New Zealand website – www.landtransport.govt.nz – is a good place for any company fleet manager to start, but risk management specialist companies can save you a lot of heartache in this area too.

SurePlan New Zealand, a joint venture between First Assistance NZ and SurePlan Australia, is a professional fleet risk management company designed to assist motor fleet owners and operators, vehicle leasing companies, motor vehicle distributors and insurance companies to manage vehicle accidents and costs for their clients.

Gordon Brown, national manager services, SurePlan New Zealand, points out that the cost of a motor vehicle accident to a company is often underestimated.

"The cost of the actual repair is only the beginning," says Mr Brown. "In fact research has shown us that a detailed investigation of almost any organization would reveal that the true cost of fleet vehicle crashes is four times the actual repair cost. Consider the additional cost to the business of downtime with vehicles off the road and staff off work, replacement training, worker’s compensation, higher-than-necessary insurance premiums, not to mention the administrative costs involved."

is it really your job

By Sean Willmot

As accident related costs are second only to lease ownership and fuel expenses in the total fleet costs, reducing these is key to managing rapidly escalating fleet costs.

"A simple concept," says Mr Brown. "However one that is often overlooked by attempts to reduce more transparent costs such as fuel expenses or fleet maintenance costs - two areas from which there is not a lot of fat to trim."

"Our goal with SurePlan is to demonstrate that it is possible to substantially reduce fleet expenses by focusing on accident frequency and cost."

SurePlan does this by implementing policies and procedures that help companies make savings by eliminating downtime due to fleet crashes, making their fleets safer by targeting risky drivers and cutting insurance costs through recalibrating premiums.

As Mr Brown points out, it is usually a relatively small proportion of a company’s drivers contributing to the majority of crash related costs, so it makes sense to target these drivers rather than putting whole fleets of drivers through often costly driving schools.

"It is in everybody’s best interests to find the fleet drivers most at risk and focus training efforts on them, rather than the usual shotgun approaches that cost too much for little apparent return," said Brown.

The 24 hour complete fleet risk management service handles the entire repair and claims process beginning when the call is made by the driver involved in the crash.

SurePlan’s FastTrack vehicle claims and accident management system links whole networks of parties (clients, assessors, repairers, insurers, tow trucks, hire cars) giving them all instant access to detailed accident data and enabling the repair process to be tracked and pre-agreed timeframes to be upheld.

By accessing SurePlan’s eSRS online reporting system, clients have detailed, up-to-date data about their fleets, including driver profiles, accident history and accident ratios. SurePlan will be soon be introducing FleetProtect and DriveSystem risk management and driver education programmes to further target risky drivers.

So, you can handle all of the above in house and basically tie up your staff resources to the point where fleet management becomes their new job role within your company, or investigate the advantages of outsourcing fleet management, which lets you get back to the business of running your business. Your choice. l