Vehicle and driver data capture and interpretation is business-critical to one of the UK and Ireland’s leading rental businesses – and the proof is in the headline statistics.
HSS Hire Group, supplier of tool and equipment hire and specialist services, operates through a rapidly expanding network of 265 branches as well as one national, 10 regional and 25 local distribution centres.
The company floated on the London Stock Exchange earlier this year and continues to develop its logistics and engineering network with the planned opening of a new national distribution centre in 2016.
It seems obvious that such growth must necessitate fleet expansion, but David Phillips, group logistics director, is not so sure. “A fleet objective is to allow the company to maintain its growth aspirations, without the need for additional vehicles,” he says.
Operating a wholly contract hire with maintenance frontline delivery fleet of 450 light commercial vehicles (LCVs) and HGVs, drivers collectively undertake several thousand jobs a day delivering, collecting or exchanging tools and equipment from customers.
All vehicles are equipped with telematics.
In recent years, HSS Hire’s logistics strategy has undergone a complete transformation so that, despite an expansion in branch numbers:
- The frontline fleet has reduced from 600 vehicles.
- The number of miles driven annually has been slashed by 1.33 million miles over the same period, to 12.49m miles.
- Fuel consumption has been reduced by 12%.
- Last year, a 27% reduction in the number of fleet incidents per 100,000 kilometres driven was recorded.
As a consequence of the determination to increase fleet efficiency, CO2 emissions were reduced, in line with HSS’s ongoing commitment to sustainability.
Apart from mileage reduction, savings are also due to the delivery fleet using the cleanest diesel technology – replacement cycles are three-and-a-half to five years, depending on mileage – and the fitment of aluminium frames to vehicles to reduce fuel consumption while optimising payloads. Currently, alternatively fuelled vehicles are deemed not to meet operational requirements but, in the long-term, hybrid commercial vehicles could be viable.
Another policy, which goes against the national fleet trend, is to introduce larger vehicles to the fleet due to their greater carrying capacity. Instead of the current 60:40 split between LCVs and trucks, Phillips suggests in the next 12 months it could be closer to 50:50. “Our strategy is to move towards larger vehicles and reduce our reliance on LCVs. Larger vehicles provide greater capacity and so there are fewer wasted miles,” he says.
That does not mean the fleet will not expand, but what it does mean is that the logistics team must use the wealth of data at its disposal to further maximise efficient and constructive vehicle routing and distribution planning while the company ensures stock management is at the cutting-edge.
“We recognise that the CO2 emitted by our transport activity is the largest single impact we have on the environment,” says Phillips. “We are committed to reducing this through becoming increasingly vehicle and fuel efficient.”
The focus is on “more jobs per journey and fewer journeys”, says Phillips. “We are really encouraging our transport managers to think about routing. When we make a trip it must be absolutely qualified and be a productive journey.”
He points out that in the hire sector no business has previously attempted centralised distribution. Instead businesses typically use vehicles located at individual branches for local delivery and collection. The logic to national distribution is greater availability of product to branches and customers.
Learning from retail and logistics
Phillips is focused on learning from the “fast-moving consumer goods” sector – the likes of the major supermarkets.
Introduction of a retail-like distribution network, serving customers anytime, anywhere means orders are routed automatically to the most convenient distribution centre – and by efficiently moving rental equipment between branches, HSS Hire’s stock can be available to customers within 24 hours of ordering, where it is not immediately available in the branch.
The company says that its unique operating system considerably reduces the cost of extending its local branch network. It also means HSS Hire makes much better use of its fleet, increasing productivity and helping deliver consistently high levels of service to customers.
“We are technology savvy, but there is much more we can do,” says Phillips.
“30% of our work is same-day order and delivery and we must learn from the wider logistics industry to do that better through improved journey planning. It is all about getting the balance right between pre-planned journeys and what we have to react to.
“We are bringing HSS Hire to the fore in terms of logistics activity so we can benchmark ourselves against industry-leading logistics providers because we want to be leaders in the field.”
HSS Hire is a member of the Freight Transport Association’s Van Excellence initiative and earlier this year it became one of the few organisations to achieve the Fleet Operator Recognition Scheme’s top gold standard.
That put the company in the top 1% of logistics providers in London, where it undertakes 40% of its business.
“Our customers demand high standards in terms of compliance and FORS gold cements it,” says Phillips, who has a 20-year career in the logistics industry behind him and joined HSS Hire in 2013. He started his logistics career at the Co-op Group before moving to Bidvest Logistics.
“We passed FORS bronze and silver accreditation first time, and it proved to us that we were operating at a very high standard,” he adds. “Achieving the gold standard has taken the company to the very highest level and is something we are proud to have achieved.
“But we see it as a standard that should be met by all companies. FORS is the recognition and reward of excellence and raises the standards of fleet operators.
“It is an excellent way to prove to existing and potential clients our credentials as a high performing operator who adheres to high quality standards.”
In addition to the frontline fleet of 450 vehicles – 60% Mercedes-Benz Sprinters, 25% Isuzu 7.5 tonne trucks and 15% 18-tonne DAF vehicles – HSS Hire also operates a mobile fleet of around 100 vans, driven by fitters who maintain equipment deployed on construction sites, plus 100 small vans driven by branch managers.
LCVs are supplied by Arnold Clark Finance, with vehicles above 3.5 tonnes leased from Contract Vehicles.
Phillips highlights the fact that the chosen funding and fleet management method gives HSS Hire absolute cost transparency. “They are very productive partnerships,” he says. “We outsource to those companies and rely on them to minimise vehicle downtime.”
Data critical to performance
All drivers receive advanced driving skills training. Last year, the company equipped its LCVs with Ashwoods’ Lightfoot driver behaviour technology giving real-time verbal and visual in-vehicle advice to drivers on their driving style along with automated reporting – proven to deliver fuel savings of around 12% to HSS Hire.
The technology also sends a weekly and monthly email report to the logistics team, providing a snapshot of driver performance and other key metrics including idling time and unsafe manoeuvres.
The fitting of Lightfoot has virtually eliminated accidents in those vehicles as employees have adopted a smoother driving style and greater awareness of what’s happening on the road around them. But such technology is not currently available for HGVs.
HSS Hire views technology and the data consequently delivered as business critical to the performance of its fleet.
“When you have a national fleet with full livery operating across the UK and Ireland the presence is immense and you have to put it at the forefront of what you do,” explains Phillips.
“Our drivers are brand ambassadors for the company.
“Vehicle telematics absolutely helps and supports drivers, but fleets get swept away with data and it is essential to do something with it. As soon as you receive data you must put some really good information out to drivers.”
Equally critically, 18 months ago the company introduced ‘The HSS Way’, which is designed to increase levels of both employee engagement and productivity.
Highlighting what it means for the transport department, Phillips explains that white boards at centres’ transport control enable drivers to identify daily problems on their routes and issues impacting on performance.
“We set tough goals, but it is all about creative problem solving,” says Phillips. “We aim to give people on the shopfloor a real voice. They are generally the ones with the best solutions. Employees have a formal structure where they have a mechanism for getting their views across.”
In the long term, Phillips’s ambitions for the fleet are to be “early or first adopters” of technology, continue to enjoy long term partnerships with vehicle manufacturers and suppliers and, perhaps most importantly, expand the visibility of safety reporting because “we want our drivers to come to work, be safe at work and go home to their families”.
When asked what the big lessons he had learned in his logistics career to-date were, Phillips is frank. “Awareness and understanding of road presence,” he says. “Fleets need to mitigate as much risk as they can from their operation by creating the safest possible environment for their colleagues and the public.
“Logistics covers a lot of different business activities and each works best when the role is performed by experts in that specific activity. Road planning is a niche skill; telematics requires experts in the field to turn raw data into management reports that are the backbone of our business. People good at those activities may not be good at running a warehouse operation.
“Logistics is all about understanding that you have to employ a great mix of people to have a great team and, ultimately, a great business.”
Safety and drivers at forefront of HSS business success
Legislative compliance and drivers are critical to the business success of HSS Hire, but David Phillips says they are also the two single biggest challenges facing the commercial vehicle industry.
In terms of legislative compliance, HSS Hire does not differentiate between the service, maintenance and repair standards applied to its light commercial vehicles (LCVs) and HGVs.
Taking the principle that “safety is a core value” at HSS Hire as a starting point, Phillips has developed three objectives across the transport operation: people, development and ensuring staff understand both HSS Hire’s Operator Compliance Risk Score (OCRS) and its Operator Licence audits. “Safety is not just about drivers being safe on the road,” says Phillips.
“It is about the entire delivery network: the loaders and employing trained CPC standards auditors who train our transport managers to achieve the best O-Licence scores. Two years ago, OCRS was not really in our thinking but now we report it at board level.”
Holding the view that “a commercial vehicle is a commercial vehicle”, irrespective of its gross vehicle weight, Phillips is convinced the Government will extend O-Licence regulation to the LCV sector “at some point”.
“The industry must be ready for that and we are,” he says. “We treat every vehicle the same.”
The second big challenge facing HSS Hire and all businesses employing drivers is to convince teenagers that driving is a career.
Driver recruitment and retention is a major issue for logistics organisations and transport managers. The majority of drivers are in their 50s.
“We need to build the pipeline for recruiting new drivers to fill the vacancies when currently employed drivers retire,” says Phillips.
Many driver job vacancies remain unfulfilled, or take months to fill, and earlier this year the four leading trade bodies that represent the UK logistics industry – the Freight Transport Association, the Road Haulage Association, the Chartered Institute of Logistics and Transport and the Institute of Road Transport Engineers – pledged to work together to attract more drivers into the industry.
With HSS Hire’s business model reliant on a nationwide network to deliver and collect tools and equipment, Phillips argues: “We must promote driving as a career to 18-year-olds, so that when they finish their education they want to become drivers.”