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Fleets increasingly reliant on suppliers

SMMT, van sales.

Fleets Informed supplier partners claim that more companies are turning to them for information, management reports and innovation, but they believe there is still a vital role for fleet managers

The 2017 Commercial Fleet, Fleets Informed programme brought together representatives from Lex Autolease and Enterprise Flex-E-Rent to discuss the changing fleet-supplier relationships, the big sector trends and fleet efficiency, including the changing role for fleet managers from ‘doers’ to ‘facilitators’.

While the focus was on van and truck management, the debate did stray into company cars on a couple of occasions, including the on-going cash versus car argument.

Lauren Pamma, head of fleet consultancy at Lex Autolease, said there was a growing level of “chatter” among fleets who had now woken up to the fact that the legislative changes did not just affect salary sacrifice but the provision of cash versus car benefits.

She said: “Fleets want people in the company car so they are looking at what they can do to ensure this happens, for example, reducing mileage thresholds, changing the cash allowance offer. Other companies are looking at switching totally to cash, but that will cost them more money.”

Commercial Fleet: How are fleet demands on suppliers changing?

John Collins, Enterprise Flex-E-Rent: Fleets are always coming to us to ask what’s happening in the industry. 

Richard Tilden, Lex Autolease: They want us to facilitate via the supply chain as well – we have become intermediaries between fleets and other suppliers, especially with businesses that are growing fast and you have the MD’s PA running the fleet.

Lauren Pamma, Lex Autolease: They want things to be simpler and less hassle but without paying any more. We are in danger of thinking that innovation means a step-change. But customers often see it as a report coming to them when they want it – that’s innovation for them.

JC: The challenge is to engage at a senior level at the right point in time. Many fleet managers are blocked from the process when they should be involved. People have different drivers, for example, being focused on cost and not considering the real options that benefit the business. We have to discuss transport solutions at an earlier stage and at a higher level. There aren’t enough businesses thinking strategically.

CF: Are fleets relying on you more now for support?

JC: Where they have to bring in other companies to provide solutions, we are acting as a fleet director. There are many different solutions that fleets need now, but it needs a robust supply chain within their own business.

RT: There are lots of little drip-drip improvements but you have to have a long-term relationship with the customer.

JC: There is a massive range of options now for running a fleet but do they look at those or just go back to what they know and have always done? The question is how to challenge the status quo. A number of our forward-thinking customers have appointed innovation managers who have been tasked with talking to suppliers about innovation. 

CF: Are you seeing any demand for alternative fuels?

RT: We are moving from the early adopters to understanding the real wholelife cost benefit and CO2 benefit. It’s now a viable option, especially as maintenance costs are so much lower you can push out the cycle to five or six years.

FN: With tighter sentencing for non-compliance, how are fleets introducing risk management improvements?

RT: It requires cultural change. Younger drivers have a different culture – they get it. But change will come through reward structures and benefits for the individual.

JC: Some companies are driving out good practice by pushing down responsibility to owner-operators for deliveries. Their focus is on number of deliveries a day; they don’t care about driver behaviour. That goes against everything we are trying to do as an industry. They claim safety and compliance is nothing to do with them because it is a third party delivering.

FN: Are companies running their fleets more effectively today?

RT: Professionalism has increased, driven by more services and more outsourcing and that is here to stay. We do see more in-sourcing with commercial fleets because it’s a tool for the job. We sometimes see cycles as a fleet grows; they outsource and learn, then in-source.

JC: It depends on the sectors and industries. When the focus is on vans and commercial vehicles, the fleet manager plays a different role to the one that is driven purely by procurement. It all depends on the business drivers.

LP: We suggest that what works best for the company is to maintain a fleet manager. If they are engaged with us and we have a strong relationship, we can make them look good.

JC: The good fleet managers are more open-minded and are not afraid of change; they embrace new ideas. They create value and that means different things to different businesses in different industries, for example the value of reducing accidents or compliance. They – and we – have to understand business culture and matching that to their solutions.

RT: The fleet manager has to engage hearts and minds. Their role is a facilitator because that’s how they can effect change with the board.

FN: What are the big trends and developments you are seeing in fleet?

JC: We are seeing the impact of integrated telematics on trucks and vans, and the switch-on of pay-as-you-go. We see that happening within the next couple of years.

RT: There is already talk about it in Europe with more standardisation of vehicles.

JC: Camera technology is also big in Europe. That data helps you with the insurance by proving fault. Everyone has different agendas; we have to understand what’s important to each customer which means working in conjunction with fleet managers, HR, operation managers and other key stakeholders to understand what they want to achieve.

LP: Customers are asking more about electric vehicles. It’s one thing we hear most – what’s the right fuel. And they are starting to act on it by replacing one or two diesel vehicles. One of our customers has replaced 50% of its fleet with electric because it works for them.

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