Downsizing: Shrink costs and CO2 with smaller vehicles

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Downsizing vans is becoming increasingly popular among companies looking to ‘future-proof’ their fleets while simultaneously reducing their operating costs.

According to a number of leasing companies, there is a discernible trend for businesses to reduce the size of their light commercial vehicles (LCVs) as a means of cutting fuel and operational costs as well as CO2 emissions.

Tony Grove, LCV manager at Arval, estimates wholelife cost savings can reach £10,000 for businesses that move from a heavy van to a light van across a four-year vehicle lease, while moving from a heavy van to a medium van could save up to £3,000.

“There is no doubt that cost savings can be made by selecting smaller vans,” he says.

“It is always a good thing for businesses to review their fleets because requirements can change and new models enter the market.

“Getting this right can deliver ongoing cost savings as well as reducing a business’s environmental impact.”

The downsizing trend coincides with many manufacturers introducing model ranges that optimise the use of available space while simultaneously improving fuel consumption.

Marcus Puddy, director of commercial vehicles at Lex Autolease, says he is witnessing a “definite and ongoing downsizing trend”.

“3.5-tonne vans and below are certainly on the rise at the expense of vehicles in the 4.5 to 7.5-tonne category. I think that there are various reasons for this,” he adds.

“Thanks to manufacturer innovation, new model vehicles are designed with imaginative use of space and lighter racking systems.

“This makes small vans a viable option for a much broader range of businesses than was previously the case.

“Design features, such as higher payloads, different load lengths, roof heights and folding front passenger seats mean that smaller vans can now be used for jobs they previously couldn’t.

“The smaller vans on the market today incur considerably reduced fuel bills compared to their larger counterparts.

“Businesses may also feel the benefit of the necessary logistical changes that result from the use of smaller vehicles. Downsizing is not only possible for most companies now – it can be incredibly worthwhile.”

How manufacturers influence the decision to downsize

Richard Bunn, director of van leasing business White Hot Vans, which specialises in providing bespoke vehicles for tradespeople, said the role of manufacturers in facilitating the downsizing trend should not be underestimated.

“There are various benchmark sizes within the construction sector in particular – like the necessity for a van to be able to carry a piece of plasterboard that measures eight feet by four feet,” he says.

“What we’ve been witnessing in recent years is manufacturers changing the way that their vans are laid out – possibly by moving the bulkhead – so that this can be readily achieved in their smaller vans.

“The upshot of this is that companies have been able to look at smaller vans for the first time with all the savings that these can bring.”

Grove says he is being approached by an increasing number of businesses looking to reduce the size of their vans. “Moving to smaller vans can be advantageous for fleets – they tend to have a lower wholelife cost over larger variants because of the miles per gallon and emissions that they deliver,” he says.

“It’s fairly common that we will review a fleet and find the business is using larger vans than it needs because there is an occasional requirement to carry large loads.

“In this instance, the more cost-effective approach tends to be to run a smaller van, then take a short-term rental vehicle for occasional requirements.”

While Simon Staton, director of client management at fleet management company Venson, agrees about the effectiveness of short-term hire vans in certain circumstances, he doesn’t view the current movement towards downsizing as a “trend”.

“I think that it’s more of an ongoing process for larger fleets to look at ways in which they can reduce costs and operate their fleet more efficiently – rather than being a trend,” he says.

“For van fleets, it’s all about reviewing where and how vehicles are used.

“This can highlight if there are spare vehicles that are not being regularly used or over-speccing a vehicle for a use that happens infrequently. The use of short-term hire vehicles often satisfies these requirements.

“It’s also important that companies build up the best possible understanding of vehicle downtime and areas where improvements can be made by liaising as closely as possible with their fleet management providers and by putting the correct vehicle management system in place to manage the process.”

The worry of legislation applying to vehicles of more than 3.5 tonnes – such as tachographs and operating licences – is also removed for companies opting for smaller vehicles.

There can be potential to expand the operating radius of a business into urban areas by using a smaller, more manoeuvrable vehicle better suited to busy and built-up streets.

Mark Lovett, head of commercial vehicles at LeasePlan, explains: “We have been approached by an increasing number of clients looking to avoid legislation governing the amount of hours that drivers of trucks above 3.5 tonnes can drive.

Consequently, we have witnessed a considerable growth in medium-sized panel vans.

“We’ve not witnessed the same growth in small vans, although this market is still growing.”

Manufacturers respond to downsizing trend

The trend for downsizing has also been recognised by van manufacturers.

For example, as part of its sales process, Mercedes-Benz Vans examines a customer’s requirements.

“When a fleet operator comes into our dealership and asks to buy, say, a fleet of Vitos we sit him or her down and look closely at what the vans will be used for,” says Steve Bridges, managing director of Mercedes-Benz Vans.

“Quite often we find that the smaller Citan will do the job, thus saving the customer a lot of money over the fleet lifecycle.

“Conversely we have had buyers who think they need small vans, but in fact they would be quite unsuitable for the job owing to payload restrictions.”

This shows that while the benefits of downsizing vans may be attractive, it is not always appropriate for all fleets.

Case study: Environment Agency - Dale Eynon, head of fleet operations

Environment Agency has been downsizing its van fleet for the past seven years.

The organisation, which exists to “create better places for people and wildlife” while also “supporting sustainable development”, has a nationwide fleet of 800 light commercial vehicles (LCVs).

Since 2007, it has sought to cut costs and CO2 emissions by reducing the size of the vans it uses while also optimising their round-the-clock use.

Dale Eynon, Environment Agency head of fleet operations, says: “We’ve got a wide variety of vans in operation.

“Due to the varied nature of the work we undertake there are occasions when some colleagues simply need larger vehicles to fit equipment in.

“But seven years ago, we looked at the composition of the fleet and began talking to those colleagues driving the vans to see how they felt about being asked to drive smaller vehicles.

“I think that this hearts-and-minds approach was a very important part of ensuring that the initiative was accepted from the outset.”

In addition, the Environment Agency looked at ways of reducing the weight of each van.

“We looked closely at the racking that the vans are fitted with,” Eynon says.

“We’ve worked with our racking company to cut the weight of this and introduced these standards to our van fleet nationally.

“In addition, we’ve talked to those who drive the vehicles to find out whether they really did need all the kit they thought they did or whether much of it was just being carried about because it always has been.

“We discovered that some kit was used infrequently and could potentially be removed.”

Both the size of the Environment Agency LCV fleet and the size of the vans has decreased year-on-year since 2007.

This coincided with manufacturers making vans lighter and more fuel-efficient.

Until three years ago, Environment Agency had a solus agreement with Ford, which resulted in much of its fleet consisting of Transits.

Since then, the make-up of its fleet has begun to diversify and last year its flood defence team took delivery of more than 30 low-emission Citroën Berlingo Enterprise vans.

“We still operate a lot of Transits and I’ve noticed that manufacturers generally seem to be trying to make their vehicles weigh less, which can only be a good thing,” Eynon says.

“Our aim for the foreseeable future is to continue reducing the size of the vans we operate in order to ensure that we continue to operate the most efficient fleet possible.”

Case study: BskyB - Oliver Wanklyn, operations manager

BSkyB aims to increase the efficiency of its van fleet by up to 20% following the introduction of an ongoing downsizing programme.

The satellite broadcasting, broadband and telephone services company initially introduced a one-year trial during which it ensured its engineers could still undertake their jobs as effectively as before while using smaller vehicles.

During this time, the company also explained to the users of its 3,000 vans why it was
implementing the initiative.

Oliver Wanklyn, BSkyB’s operations manager, says: “There were a number of different reasons why we began looking at whether it would be possible for us to use smaller vans three years ago. The financial implications – including the reduction of the wholelife costs of the vehicles – were at the forefront of our minds.

“Equally important was the programme’s potential to cut our CO2 emissions.

“But what became clear during the trial was that there was potential for these smaller vehicles to reduce our fuel usage alongside other unanticipated benefits like being able to park more easily on customers’ driveways.”

There was widespread buy-in from engineers during this trial period despite the fact that
they had been using medium-sized vans for many years.

The trial period was also spent reconfiguring the vans’ racking in order to maximise the available space.

“I think that this was also a very important part of the whole process,” says Wanklyn.

“We discovered that within the medium-sized vans that we’d traditionally used there was always around one cubic metre of dead space.

“By reconfiguring the racking and talking through with engineers about ways to organise their equipment better, we realised that it would be possible to introduce smaller vans across
the fleet.”

Over the past two years, BSkyB has introduced 1,000 Volkswagen Caddys to complement its 2,000 Transporters.

Wanklyn anticipates that many of these larger Transporters will be replaced with Caddys as their leases expire.

“We’ve noticed that the smaller vans are around 20% more efficient than their equivalent medium-sized vehicles,” he says.

“I think that the main thing is to talk through with those colleagues who’ll be using the vehicles  what the business and environmental benefits will be.

“And by actively consulting them about ways to improve the racking in the vehicles, we also ensured that their buy-in was present from the start.”

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