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Five challenges in fleet management

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11th Sep 2015
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AccountingWEB caught up with fleet management consultancy Puddy Vehicle Solutions (PVS) to find out some of the challenges in fleet management.

“Nothing is complicated about fleet management,” PVS managing director Marcus Puddy told AccountingWEB. "A lot of fleet management issues can be remedied through simple solutions which will then flow through the whole business."

Puddy recognises that there is a shortage of skilled professional fleet managers employed by businesses to control vehicles. To ensure that consultants are providing the best advice for their customers, Puddy has detected five current challenges in delivering effective fleet management and keeping costs low:

1. Keeping cost to a minimum thus increasing profitability

Puddy used a common fleet issue to illustrate how costs creep through inefficient management. Before companies realise, the fleet’s then costs accelerate to the point of costing a fortune again.  

“What generally happens in the fleet world is people go out with a request for proposal (RFP) for a tender. They’ll award the contract, generally for five years. And if you have a fleet that’s generally an eight year contract, because vehicles need to run off, you can’t just go to someone else after those five years. Your fleet will just run through that contract until the end of its term. Generally, those five year contracts end up being an eight year contract with that service provider.”

“You need to take costs out at the tender process. And if no one generally manages that contract or supplier, then costs begin to creep. So the supplier will have a change of service, maintenance and repair (SMR) packages, and you’ll have a vehicle model change, and all that muddies the waters around the tender that happened, for example, two years ago.”

So trying to establish what your costs were and why your costs are what they are becomes messy if you’re not on top of it.

2. Legislation

Think of all the legislations that affects your workplace. For many, like sales reps, the company car or company van can be classified as their workplace. All the legislations, including all the health and safety rules and regulations, that’s applied to your workplace still applies to the company vehicle.

Puddy used the mobile phone legislation as an example of simple health and safety that can’t be relied to common sense. “If a driver was on business journey and their phone pinged, and they looked to answer it, and in doing so they mowed a cyclist down, that would be their problem and the company’s problem.”

Companies can easily avoid the costs by putting the right policies in place. The solution is simple, Puddy says, just a couple of lines in the company’s policy for the drivers to agree that they won’t use their mobile phones whilst driving, and for the drivers to sign up to it.

But companies won’t make amendments until litigation happens, but by then it’s too late.

3. How do you manage your data?

Like mobile phones, you can’t rely on the driver’s common sense. For this reason it is advisable companies set up monthly alerts to their drivers. Otherwise, how do you know if the tyres are being replaced before at the legal tread requirement?

“Everybody who takes a company car there’s no reason for them to have bold tyres,” says Puddy. “Every company with an SMR package allow you to replace your tyres at 2m.”

To ensure this is implemented, Puddy recommends adopting a diary system where you remind your drivers of their obligations.  After all, as Puddy says, “All you’re trying to do is protect your companies and your assets; the vehicle and the drivers. If you’ve no one’s out there selling your products, you’ve got no income.”

4. The fleet manager has many hats

Puddy says businesses do not usually have a dedicated fleet manager. Often this position is taken by someone within HR, as an administrator, who probably doesn’t have the time to understand what’s going on with the legislation, understand what’s going on with the fleet, and where all the costs are going. It would be like a building site without a health and safety instructor.

This is where costs creep, fleet costs go up, and the risks go up.

5. Re-educate expectations

Long gone are the days when you would have to weekly check your car for oil and water. Cars are so robust that they don’t need to be checked from service to service. As drivers we are now out of the habit. So Puddy’s final fleet market challenge is to re-educate, re-affirm, and re-confirm what your expectations of your drivers are.

Puddy leaned on his 25-year fleet management experience to drive home the simplicity of re-education. He would remind his drivers every March/April (coinciding with the Easter break) about checking their tyres and breaks on their trailers and caravans. Otherwise, the caravan would probably have a blow out on route to their holiday, flip, and cause damage to the car or worse.

Maybe this is a lesson to us all. Simply taking 10 minutes out before driving to check the safety of your vehicle can prevent these needless accidents.

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