A New Year brings new priorities for fleets
With arrival of a brand new year, it is always interesting to look forward and consider some of the key topics that fleet managers will be paying most attention to over the coming 12 months.
Our suggested top ten fleet concerns for 2015 look like this:
Reducing whole life costs
While the economy has been showing signs of improvement in recent months, for many companies keeping a close control of their business costs will remain a priority in 2015. One area that could attract a lot of corporate attention, simply because it is usually the second largest corporate cost centre, is the vehicle fleet and we believe that controlling whole life costs will again be right at the top of the fleet agenda throughout the coming year.
Keeping leasing costs under control
For fleets that lease their vehicles, keeping acquisition costs under close control will also be a priority. But doing that, especially in a sole supply leasing situation, can be easier said than done. One way of reducing acquisition costs, often by as much as 10%, is to look at competitive tendering all your new vehicles using a panel of carefully-chosen funders, which introduces competition and helps identify the most cost-effective leasing rates.
Managing end-of-contract charges
After another year of near record highs for end-of-contract charges such as repairs or excess mileage, according to the Fleet News FN50 league table of leading leasing companies, a priority for many fleet managers will be to ensure that these avoidable costs are kept in check. That means challenging end-of-contract invoices where appropriate and not accepting that the leasing company is incapable of making a mistake.
At the same time, it doesn’t seem unreasonable to expect drivers to contribute to the cost of repair where they have been at fault. One benefit of this approach is that it increases awareness amongst drivers of the need to look after their cars properly in the first place.
Switching away from fixed cost maintenance.
Modern cars have become increasingly more reliable, warranties and service intervals are longer, and dependability is much improved. If the average company car replacement cycle is three years/60,000 miles, it is quite conceivable that, with careful management, some low-mileage vehicles could only require two or three scheduled services during their lifetimes.
Significant savings in maintenance costs, of up to 20% in some cases, can be achieved by switching away from the fixed-cost maintenance packages typically offered by leasing companies as part of the leasing contract and opting instead for pay-as-you-go maintenance, managed by your fleet management specialist.
Keeping fuel costs under control
Although the price of a barrel of crude has hit new lows on world oil markets and pump prices are falling as a result, fuel still remains the second largest fleet cost after depreciation. This means that managing fuel costs will remain a priority for fleets and that fuel management tactics, such as using fuel cards and specifying sources for refuelling, will still be important.
Getting the best from going out to tender
Changing fleet suppliers can be a tricky proposition that often hinges on getting your tender document absolutely spot-on. For fleets that are considering switching suppliers this year in the search for a better deal, getting the tender document absolutely right in the first place is crucial. That means pitching the tender document just right and asking the correct level and depth of questions to help identify the most suitable supplier, as this can avoid a lot of effort, duplication and, ultimately, extra cost later on.
Mileage capture needs to be accurate
The accurate recording of business mileage is essential for companies that want to keep their mileage expenses in check and help reduce their carbon footprint through eradicating unnecessary mileages.
But there are also good regulatory requirements for keeping accurate mileage records, too, following reports that HM Revenue and Customs are taking a tougher stance with firms that have not been scrupulous in their business mileage capture. Fleets will need to ensure that they have adequate and robust mileage capture systems in place.
Duty of care is still important
There seems less publicity about this than a year or two ago, but ensuring you meet your duty of care to your drivers, including providing them with adequate training where appropriate, is as important as it ever was from a legal viewpoint. Fleet managers ignore this vital area of fleet operations at their peril as the potential impact on their businesses, under legislation like the Corporate Manslaughter Act, can be profound.
Managing the grey fleet
Linked to duty of care responsibilities is the need to ensure that the grey fleet – those cars owned by employees but used for company business – are managed with the same degree of professionalism as company-owned vehicles. Current health and safety regulations stipulate that organisations need to ensure that every grey fleet car is fit for purpose, has a valid MoT, is insured for appropriate business use and that the employee has a valid driving licence.
Fleet managers will need to look at ensuring that they have robust policies and procedures in place to manage their grey fleet vehicles as effectively as their company vehicles.
Checking that drivers are eligible to drive vehicles they are allocated, without excessive penalty points on their driving licence, remains at the cornerstone of duty of care and good fleet practice. However, doing so will soon become more complicated, following the Government’s decision to abolish the paper counterpart to the photocard driving licence, which takes effect from June this year.
Fleets will need to carefully consider the systems they put in place to check drivers’ licences in light of the changes, and should consult closely with their fleet management provider to ensure that all bases are covered.
If you would like to discuss any of these areas with a view to running your fleet more efficiently in 2015, please get in touch.