Managing an efficient fleet 2015

Managing an effective fl eet

A B E S T P R A C T I C E G U I D E

Fourth Edition

Managing an effective fl eet 2015 highlights four important industry sectors A major supplier in each has provided an in-depth and informative article revealing the type of advice they offer to fl eets. Drawing on their own experiences in the fi eld, these experts offer best practice guidance to help you run a more effective fl eet operation.

■ Finding the right funding method by Zenith■ Reducing risk by AA DriveTech■ Developments in telematics by ALD Automotive■ Effi cient SMR strategies by BT Fleet

In association with

B e s t p r ac t i c e : f u n d i n g

Find the right funding methods for your fleetChanges to company car tax rates and the first year capital allowance mean fleets should consider new funding methods

56 April 16 2015 fleetnews.co.uk

By Ian Hughes, Commercial Director, Zenith

as the fleet funding landscape is continually changing, we will look at some of the factors influencing this movement. We will also review the top trends for funding in 2015 and questions that you need to consider when reviewing your fleet. By taking advice

from your leasing company and through the use of fleet funding analysis software, you can keep ahead of the changes and ensure that your fleet is funded in the most cost-effective way.

Funding methods overview■ Contract hire provides fixed costs and protection from deprecia-tion risk. it can also help improve cashflow and there is the ability to reclaim some of the Vat. disadvantages include the need to estimate the contract term and mileage, and there is no option to purchase the vehicle at the end of the term.■ Contract purchase has the benefit of allowing the company to purchase the car at the end of the term and is particularly attractive for companies who cannot reclaim Vat, or who are restricted in the amount of Vat they can reclaim. disadvantages include that it is less Vat efficient than contract hire and it is on balance sheet.■ Employee car ownership (ECO) is usually suitable for higher-mileage drivers as its structure maximises the use of tax-free authorised mileage allowance payments (aMaps). disadvantages include its cost efficiencies being impacted if aMap rates fall and it can be perceived as being more difficult for drivers to understand than contract hire. as it is not cost-effective for low-mileage drivers, it is often blended with another method across a fleet where there is a range of mileage profiles.■ Salary sacrifice is usually based on contract hire and is an ‘all employee benefit’. Benefits include income tax and national insur-ance savings for employees and it can be provided at no cost to the business. disadvantages include that it is not suitable for all compa-nies. financial risks arising, for example from early-termination, need to be taken care of; however, there are solutions available for this.■ Cash allowances can provide employees with more choice when compared to a company car scheme. downsides include that they can be a more expensive way of funding a car for both employer and employee, and give rise to duty of care issues.■ Outright purchase can deliver flexibility with no mileage restric-tions. However, the company takes the full risk of depreciation and there is no certainty over cost. there is also the need to be able to fund the vehicles upfront and the company cannot reclaim Vat on the purchase of cars if there is any private use. also costs may be impacted by further changes to capital allowances that took effect in april 2015.■ Finance leases can provide flexibility as they are not based on a fixed mileage. However, the customer takes the residual value and depreciation risk and there is no option to purchase the vehicle.

What is changing in 2015?from april 2015 the BiK tax bands have shifted again, further incentiv-ising low emission vehicle choice. the 0% rate for zero emissions vehicles has been abolished, while new bands, 0-50g/km and 51-75g/km, have been created. the 100% first year capital allowance is now only avail-able for vehicles producing cO2 emissions of 75g/km or below.

What does this mean?On the next page we look at the top trends for fleet funding in 2015.

“By taking advice from your leasing company, you

can keep ahead of the changes and ensure that your fleet is funded in the most cost-effective way”

fleetnews.co.uk April 16 2015 57


Vehicle: Vauxhall Insignia hatch 2.0 CDTi 140 Techline ecoFLEX48-month term and 20,000 miles per annum

Employee A Employee B Employee C Employee D Employee E TotalTax rate 20% 20% 40% 45% 45% Average business miles 5,000 12,500 16,000 9,000 20,000 Cost to company in CH £17,011 £19,249 £21,294 £18,568 £22,851 £98,973Cost to company in ECO £22,375 £20,106 £20,317 £19,962 £20,105 £102,865Cost of blended £17,011 £19,249 £20,317 £18,568 £20,105 £95,250

annual savings moving from contract hire (cH) only to blended solution across fi ve drivers £3,723 annual savings moving from ecO only to blended solution across fi ve drivers £7,615

Trend 1 – More blended fundingBlended funding, where more than one funding method is used across a fl eet, is getting simpler due to improved tech-nology. there is also an increased understanding of its benefi ts.

Why is it important? Because the relative merits of different funding methods are constantly changing and there is rarely one fi xed approach that is best for all vehi-cles. changes in effi ciencies of funding methods are infl u-enced by changes to tax such as capital allowances and benefi t-in-kind, along with changes to aMaps. also, emis-sions for new cars are becoming lower and lower. if you are adopting a fi xed position with only one funding method used across a fl eet, you are not able to take into account changes which impact cost effi ciencies as and when they occur.

Below is an example of savings which can be achieved from blending ecO and contract hire across just fi ve drivers. this can lead to signifi cant cost effi ciencies when replicated across a fl eet.

there is also an increase in the number of different funding methods being blended across a fl eet. for example, funding methods may include contract hire, contract purchase, ecO, outright purchase and salary sacrifi ce, as well as some short-term hire vehicles.

preferably, blending should take place in real-time and at the point of order for each and every vehicle to ensure that it takes into account up-to-the-minute tax positions and individual driver and vehicle profi les.

Work with your leasing provider, who should be able to make the process simple for you.


Trend 2 – Popularity of contract hirethe attractiveness of owning vehicles has been impacted by the change in availability of the 100% fi rst year capital allowances to cars with emissions of 75g/km or below from 95g/km and below, as of april 2015. this may mean that leasing becomes more attractive for some companies.

reasons why contract hire is preferred in some, but by no means all, cases include Vat reclaim benefi ts compared to other funding methods and its effectiveness is less impacted by miles travelled than ecO. contract hire can be more cost effi cient than a cash allowance (see trend 4) and attractive to both the company and drivers. as already mentioned, you should review using a blend of several funding methods across your fl eet.

Trend 3 – Increased adoption of salary sacrifi cesalary sacrifi ce car schemes are one of the fastest-growing fl exible benefi ts, with growth of 122% expected this year (source: Employee Benefi ts/Towers Watson Flexible Benefi ts Research 2014).

demand is increasing from both employers and employees for several reasons. these include increased awareness of its benefi ts as a no cost way to increase employee engagement and motivation, while also reducing emissions. employers are working harder to fi nd new ways to motivate and retain employees as it becomes more diffi cult to recruit and retain the best workforce in an increas-ingly competitive job market.

“Make sure you consider all the options available to provide the best [funding]

option for both your business and employees”


the availability of increasing numbers of low emission cars, including alternatively-fuelled vehicles, means that drivers have a wide range of cars to choose from and they can continue to enjoy signifi cant cost savings versus retail options. as well as cost savings and convenience, there are other factors affecting its popularity among employees, including rising costs of insurance and other motoring costs. this is making salary sacrifi ce car schemes with their fi xed costs more attractive for drivers.

Trend 4 – Employees moving back into company car schemesWe are seeing some companies continue to encourage employees to opt into car schemes rather than take a cash alternative. Whole life cost analysis (see trend 5) can ensure that attractive choice lists are compiled and enable an employee to get a better car through a car scheme than they could source using an allowance. the choice of low emission cars available means that employees can keep their BiK tax down, and also get all the other perks that a car scheme provides. another reason for the move includes duty-of-care benefi ts from being able to provide employees with new, fully-maintained and serviced cars which are safe and fi t for purpose.

Trend 5 – Don’t forget about whole life cost (WLC)WLc helps to fi nd the most cost-effective way to fund vehicles and also assists in compiling vehicle choice lists and grade boundaries.

some companies are still looking only at on-the-road prices or monthly rentals when calculating spend. a true WLc methodology takes into account every single component that results in a charge. this includes the purchase price, depreciation, tax rates (including national insurance and BiK tax), corporation tax relief, weighted

average cost of capital rates, Vat recovery, fuel, maintenance and repair costs, disposal costs and insurance.

as well as using WLc to fi nd out the cost of vehicles and assist in funding method comparisons, it can also be used to establish grade boundaries for choice lists.

Questions for you to consider when reviewing your fl eet fundingthe following is a useful checklist of factors you need to take into account and review with your leasing provider:1. can you recover Vat and, if so, at what rate?2. What is the mileage profi le like on your fl eet?

3. do you have company vehicles as a perk, business need or both?4. any LcVs?5. are there cash fl ow considerations?6. Will the fact your funding is on balance sheet create any issues?7. What resources do you have avail-able to manage your fl eet and have you considered outsourcing fl eet management? as well as getting advice on fl eet funding through your leasing company you may also be

able to benefi t from their management capabilities.

SummaryWhile fl eet profi les and funding methods used may be becoming more diverse than a ‘traditional’ arrangement, there are signifi cant benefi ts to be realised from carrying out a full analysis.

there is sometimes a reluctance to go down a blended route due to concerns regarding the complexity and administration involved. However, if you work with a specialist it should be simple to carry out. Make sure you consider all the options available to provide the best option for both your business and your employees.


Zenith is one of the uK’s largest independent leasing and fleet management businesses, managing more than 45,000 vehi-cles. Our customer base includes many household brands and some of the biggest organisations in the uK.

We have a strong focus on deliv-ering high-quality service and innovative vehicle leasing and management products.

Our solutions can be delivered to any employee within your company; whether that is funding company cars, commercial vehi-cles, providing flexible benefit schemes, temporary vehicle hire or delivering fully outsourced fleet management services.

Driving outstanding customer service through our peoplein our ‘Voice of the customer’ survey, our customers were asked to select three unprompted words to describe Zenith. the top three were ‘professional’, ‘efficient’ and ‘helpful’. Our goal is to continue to deliver industry-leading service levels, with a distinct personal touch.

Our service levels have been recognised through industry benchmarking awards. this year we have won the fleeteye customer service award for fleets with more than 250 vehicles, for the second year in a row. this was as a result of independent surveys of fleet decision-makers.

We aim to recruit, retain and motivate the best people who are committed to delivering the best service levels. for the past two years we have been ranked as one of ‘the sunday times Best companies to Work for’ as a result of independent employee engagement surveys. this year we achieved number eight in the mid-sized organisations category.

A wide range of tailored solutions including:■ Funding solutions: We provide all the main methods for funding vehicles including contract hire, contract purchase and employee car ownership. We also excel in providing mixed or blended funding solutions through our award-winning software.■ Fleet management solutions: Our high-quality comprehen-sive solutions are managed in-house and include service booking, maintenance management and breakdown and recovery. We deliver reduced maintenance costs and fast recovery times.■ Commercial vehicle management: including LcV, LgV and HgV management, specialist teams and a range of innovative

About Zenith

tools to reduce downtime and costs.■ Accident management: Our 24-hour helpdesk provides an immediate response to your drivers and the claim is handled in-house by our expert teams.■ Daily rental: We provide passenger, LcV and specialist vehicle rental solutions. costs are reduced through maximising buying power and by reducing unnecessary hire days and ancillary spend, while ensuring policies are strictly adhered to.■ Salary sacrifice: Our high-quality, tailored solution is deliv-ered to many mid to large organisations and household brands across the uK. Our service includes full implementation, ongoing management and marketing support to maximise engagement – all at no cost to your business.■ Consultancy: Our services include fleet funding analysis and consultancy to ensure that your fleet is funded and managed in the most cost-efficient way.■ Electric vehicle support: We provide comprehensive electric vehicle services, including advice on suitability and charging infrastructure.■ Fleet tools: these include pulse, our online fleet diagnostic tool, which provides award-winning and industry-leading real-time fleet analysis and reporting. You will receive full transpar-ency on all areas of your fleet’s performance, along with detailed suggestions for improvements.

For more information about how Zenith can optimise your vehicle funding, fleet management and improve service levels go to

www.zenith.co.uk, email [email protected] or call 0844 243 4371


Zenith will ensure your fleet is performing

even better than planned, all of the time.

With the right combination of precision, expertise,

intelligent vehicle solutions and innovative systems,

Zenith will help reduce the cost of your fleet and

fine tune its performance. And, in no time, your business

could be running much more smoothly and efficiently.

Don’t waste another second, contact Zenith today.

Isn’t it time your fleet was running like clockwork?

[email protected] www.zenith.co.uk 0844 848 9311

And by building strong relationships with our

customers, drivers and suppliers, we are focused on

providing you with the most expert, personable

service in the industry, every single minute.

Our in-house solutions are tightly geared to

manage every single part of your fleet; from

funding, fleet management, consultancy, accident

management and commercial vehicles to intelligent

online tools. We can provide a solution to tick all

boxes.

Fleet News BPP Advert.pdf 1 26/03/2015 14:12:46

FP_FLEETNEW_FleetNewsB.id1731928.pgs >>AdRocket<<

By David Richards, Marketing Director, AA DriveTech

t is widely acknowledged within the fleet industry that around one in five of all on-road collisions resulting in fatalities and life-changing injuries involve someone who was driving for work, so-called ‘occupational drivers’.

Given that occupational drivers generally complete about twice the annual mileage of a ‘normal office’ or home-bound motorist, they will statistically be at higher risk anyway, but there are many other factors to be taken into consideration.

As occupational drivers use their vehicle as a means to fulfil their work role, they will inevitably be pre-occupied by thoughts and concerns relating to work itself while they are driving. Lone workers in particular, who do not benefit from interaction with a colleague in the vehicle, may also become pre- occupied with personal worries and anxieties.

Whatever thoughts are crowding the driver’s mind, they collectively mount up and might become a distracting feature that could seriously compro-mise sound judgement if a crisis occurred.

Added to this, we have the ever-present threat of the mobile phone call. Although several major organisations have now banned their employees from using mobiles while driving, even with legal hands-free kits, the majority of fleets have not, and rely instead on their employee’s own judgement.

There is now accepted, published research which confirms the distracting effects of using a mobile phone, handheld or hands-free, while driving. In addition, there is motoring legislation in place that allows for more severe penalties for their inappropriate use.

Despite this, the mobile is seen as an essential business tool, particularly as they are now effectively a hand-held computer and capable of a myriad of communication functions. With many containing a sat-nav and texting becoming a regular form of

business communication, the mobile is potentially the single most pervasive in-vehicle distraction of all. Arguably, responsible mobile phone usage is now one of the most vital elements of a driver’s safety education practice.

Fatigue, too, is a major contributing factor to collisions in the UK. Despite their in-cab companion, the tachograph, drivers of large goods vehicles are particularly prone to the insidious effects of fatigue but it can, and does, affect car drivers too.

Of course, car drivers have no such drivers’ hours regulations with which to comply. With most employees subject to business pressures, long hours and dedication to duty are the norm. As a result, being fatigued is often the price driving employees have to pay for achieving their targets.

Finally, no matter how alert or safety conscious a driver is, he or she will be powerless to act effectively in a high risk situation if their vision is impaired. Sadly, recent data suggests that some 65% of the driving population are out on the roads at any one time without using the corrective eyewear they have been prescribed.

It’s hardly surprising then that occu-pational drivers are responsible for a higher than average number of errors that could lead to collisions with other road users.

Research commissioned by AA DriveTech in 2014 with independent

road safety specialists Road Safety Analysis analysed incidents reported to the police between 2008 and 2012, focusing primarily on 105,609 working car drivers.

It revealed that working car drivers are more likely to:■ Commit junction errors (25% higher than the normal motorist)■ Be fatigued (23% higher)■ Be distracted (15% higher)■ Be following too closely (14% higher)

Compared to all drivers, those driving cars for work are also:■ Twice as likely to be involved in collisions between 6am and 9am

B e S T p R AC T I C e : R I S K m A n AG e m e n T

Reduce risk through a targeted driver training programmeA quality-driven, driving for work strategy can improve employee safety as well as reduce costs for the employer

“The true cost of collisions is substantially under-

estimated. Over the years, the insurance industry has

put the true, total cost of crashes at between six

and 32 times the so-called ‘bent metal’ cost”

I


■ Over-represented in all collisions between 3am and noon■ Less likely to be involved in collisions in the afternoon■ Over-represented in collisions between monday and Thursday■ Slightly more likely to be involved in collisions between October and march, perhaps reflecting working and holiday patterns

This data demonstrates that there is clearly a need for occupa-tional drivers to be made aware of the increased risk that they are exposed to, while at the same time offering them a way of miti-gating that risk.

Drivers should be offered practical, convenient and memorable advice on ways to neutralise all these threats to their safety.

The answer is the implementation of a structured, targeted, quality-driven driving for work assessment and training programme, aimed specifically at the needs of working drivers.

But such a programme has to make sound business sense for any organisation if it’s to gain support internally from final decision-makers. However, if delivered by experienced specialists, it should substantially trim fleet running costs and should more than pay for itself over a short period of time.

The true cost of on-road collisions is, in the main, substantially underestimated. Over the years, the UK insurance industry has put the true cost of crashes at somewhere between six and 32 times the

actual cost of vehicle repair, the so-called ‘bent metal’ cost. With UK company-owned vehicles having on-road incidents once

every 18 months on average and with business vehicle crash repair costs currently running at about £900 a time, the annual collision-related cost, for even a modest fleet, can have a substantial impact on any organisation’s profitability.

We estimate that a company with a turnover of £10 million and 4% return on sales, running a fleet of 40 vehicles with typical inci-dent rates, costs of repair and admin, needs to generate nearly £1m in revenue simply to cover the full costs of road traffic collisions.

Driver awareness and judgement can be addressed effectivelyThis is clearly money down the drain because the principal cause of the problem – the drivers’ awareness of their surroundings and judgement in high-risk situations – can be addressed effectively in a subtle, supportive way.

So let’s look at some of the potential opportunities for cost cutting through a professionally-managed driving for work programme.

In the current challenging economic climate, it’s a brave person who suggests that such a programme can always cut insurance premiums, but it can certainly help stem future rises and will usually assist in negotiating more favourable excess levels too. This is because the insurance industry has, over many years, gathered the


evidence that positively managing driver behaviour works if done properly.

What is beyond doubt is that a significant fringe benefit of utilising modern, defensive driving techniques is an improvement in fuel economy. Because the application of defensive driving techniques should smooth the progress of the journey, reducing the use of brakes and the number of gear changes involved, a reduction in fuel use will naturally follow. There are many fleets which have experienced fuel savings in the order of 17-20%; many have reported figures in excess of this.

There is also much anecdotal evidence within the industry which suggests that drivers who crash less are also kinder to their tyres, tend not to use their brakes so much and don’t hit kerbs and potholes as often as their untrained peers. even a 5% annual saving on all these common wear and tear items is worth having. Think how much new business would have to be generated to earn an equiv-alent margin!

It’s also a fact that vehicles driven by more cautious, more thoughtful and better-informed drivers attract a better residual value at time of disposal, thanks to increased care over the life of the vehicle. In the main, trained drivers have an increased sense of pride, both in their enhanced abilities and also their under-standing of how to work more effectively in partnership with the vehicle itself. For them the vehicle is something to value, not to abuse and take for granted.

This attribute is not just relevant to the outright purchase fleets – leasing companies are increasingly offering driver risk manage-ment packages, not just as a value-added service, but because they realise their assets are being better cared for during the life of the contract and can offer more attractive rates as a result.



This chart shows the likely reasons why working car drivers crash compared to all other drivers in police-reported incidents (STATS 19). For example, working car drivers are more likely to crash as a result of junction errors (25% more) or fatigue (23% more) compared to all other drivers, but much less likely to crash as a result of substance impairment (73% less).

Another aspect of managing driver risk exposure, which is often overlooked, is the effect on staff morale.

Staff recruitment is a major cost for most businesses; the increased feeling of loyalty that stems from being included in such a training programme cannot be underestimated.

Driving is now widely considered as a life skill. If an employer offers the kind of training that is supportive, constructive and non-judgemental, it will not only be warmly received by staff but is more likely to be acted upon positively in the workplace.

employees that believe they are valued by their employer, because they have been offered performance-enhancing training of

this kind, are more likely to retain motivation and enthusiasm for their job, very often resulting in increased productivity.

If you can keep your staff happy, and, as a result, the workforce stable, there will be increased business continuity, which be much appreci-ated by your customers.

Last but not least, we must not discount the corporate social responsi-bility and environmental impact benefits of effectively managing driver behaviour.

There is no question that there has been a significant cultural shift in the

UK in this respect. The majority of organisations now understand how improving the behaviour and responsibility of their business drivers can have a significant effect on how their company, brand or service is perceived by their various stakeholders.

The effect is obviously difficult to quantify scientifically but, none-theless, viewing your drivers as ambassadors for the brand while out on the road is a wise move and, at the same time, you’re driving a better business.

Cutting crash rates also saves huge amounts of administration time for the fleet management team.

even if the whole accident management process is outsourced, there will always be someone internally within the organisation who will have to spend time reading reports, attending meetings or taking follow-up action.

Counting the additional cost of crashesReplacement vehicles obviously have a cost too, as courtesy vehi-cles become less of an automatic option from vehicle repairers.

If a crash does happen, and it’s a serious one, there is every like-lihood that your valuable, expensive-to-replace employees might well be absent from work for some consider-able time.

He or she may have to be counselled, re-trained or rehabilitated in some way or, in extreme cases, replaced alto-gether, all of which incurs a cost to the business.

Something that may not appear initially to be cost-related but is also potentially bad for business is negative publicity. The media loves lurid images of road crashes and, if your vehicles carry your organisation’s livery and logos, you could unwittingly be centre stage before you know it.

Worse than that, if your organisation’s vehicle was involved in a serious collision, resulting in a breach of the Corporate manslaughter and Corporate Homicide Act, you would be obliged to advertise your guilt by the court.

either way, it’s not good for brand image and will almost certainly make prospective customers think twice before approaching your organisation.

“The majority of organisations understand

how improving the behaviour and

responsibility of their drivers can have a

significant effect on how their company is perceived”



AA DriveTech is the business driver education division within the AA, which specialises in reducing the chances of those who drive for work becoming involved in collisions and therefore incurring avoidable collision costs.

Over the past two decades, the company has developed and refined a five-step process it describes as ‘The Journey’. Despite being structured and methodical in its approach, ‘The Journey’ can easily be adapted to the individual needs of customers in a variety of sectors and with varying fleets.

■ For more information, email [email protected], call 0845 299 6131 or visit www.AAdrivetech.com

About AA DriveTech

Stage 1 – Audit/surveyAA DriveTech’s experts can help companies determine what their exposure of driving-related risk is.

We will take an in-depth look at the organisation’s current policies, procedures and practices from a legal, financial and operational standpoint, which will culmi-nate in a detailed report highlighting areas of risk that should be addressed.

Stage 2 – ValidateThe most elementary risk management procedure of all is to ensure that employees who drive are truly eligible to do so, but it is estimated that one in 300 is driving with a revoked or expiring licence.

Driving licence validation is therefore a crucial early step in effective driver risk management.

With many years experience in this area, AA DriveTech continues to operate a speedy, highly cost-effective driver licence checking service, which can accommodate the needs of small and large fleets alike.

Stage 3 – AssessIt is a legal requirement to assess employees’ exposure to risk in the workplace and driving is no exception.

There are various ways of achieving this, but the most cost-effective method, which also has the least impact on staff downtime, is the online driver risk assessment tool. This can be completed at any time that is convenient to the employee.

Confidentiality is guaranteed and only the nominated line manager will be notified of the results, results which will make recommendations for appropriate remedial action.

Stage 4 – TrainThe AA DriveTech training course portfolio is comprehen-sive and wide-ranging. Drivers of all kinds of vehicles can be accommodated and there are a number of different delivery mechanisms.

Whether it is online learning, interactive group work-shops or traditional one-to-one personal coaching, the division prides itself on having some of the most experi-enced and highly-qualified defensive driving trainers anywhere in the UK. The company can also provide specialist training for foreign drivers, minibus drivers, those driving 4x4s both on- and off-road, and chauffeurs requiring additional personal security qualifications.

Stage 5 – Manage Driver risk management should be viewed as an ongoing, evolving process. If organisations are hoping to avoid corporate culpability and are truly concerned about duty of care, both towards their employees and the wider trav-elling public, a fleet and driver risk management programme needs to be properly managed.

The only way to ensure you have control is to ensure that you have relevant, accurate data and information at your fingertips. This can now be achieved, thanks to FleetRiskmanager, an in-house developed online manage-ment tool which gives a real-time picture of assessment results, training outcomes, licence status and vehicle service records, together with a raft of driver-declared additional information.

‘The Journey’ from AA DriveTech – a holistic piece of thinking that will help you manage your vehicle fleet safely, cost efficiently and responsibly.


Minimise your road risk through integrated Fleet Risk Management.

At AA DriveTech, we have developed a holistic

approach to feet risk management that we’ve

called the ‘Journey’. It means our programmes

will meet your duty of care needs, reduce your

feet costs and keep your drivers safer.

• Fleet audit

• Licence validation

• Driver assessment

• Driver training

• Management reporting

01256 495732email: [email protected]

web: AAdrivetech.com

Start your journey today...

Driving a better business

Audit

Valid

ate

Manag

e

TrainAssess

AADT A4 fleet news ad.indd 1 18/02/2015 12:25

FP_FLEETNEW_AADTA4flee.id1726454.pgs >>AdRocket<<

By Rhys Harrhy,Telematics Product Manager, ALD Automotive

elematics is no longer the new kid on the block. The technology has come of age, refining and evolving over the past decade, presenting new possibilities, addressing new issues and giving new insight into the practical problems that fleet managers face. These issues are

fundamentally the same as they’ve always been: controlling costs, improving efficiency, meeting regulatory, legal and fiscal obliga-tions, addressing environmental concerns and looking after drivers.

Telematics is a tool that increasing numbers of fleet managers are already using to good effect, but even if it’s not yet being used in their organisation, most fleet managers will now be aware of the technology and its immediate and practical benefits.

But this is just the beginning. Even with telematics in place and used for purposes such as accurate mileage capture, monitoring risk, managing driver behaviour or keeping track of environmental performance, there is so much more that is possible. Here we examine some of the exciting trends in telem-atics and take a look at what the future may hold for the fleet industry.

Fleets have entered the information age – the question now is what to do with the data? The beauty of telematics technology is that it’s a tool that can be utilised in countless ways so fleet managers, firstly, need to decide on their priorities and address them.

Often this means using telematics for quick wins, such as the accuracy of journey data when capturing business versus private mileage. But it’s important to understand the biggest benefits from telematics are really felt only when key information is acted upon.

Telematics data gives hard evidence and clear insight, not just into individual driver behaviour, but into overall fleet performance too. Features such as league tables, behaviour reports, vehicle usage patterns and real-world fuel economy all provide opportunities to see the complete picture and help businesses make decisions accordingly. With so much potential data at their fingertips, fleet managers need to find the right balance between maximising insight and reporting depth and frequency; too much data can lead

to information overload and the benefits become diluted. With the basics in place, more advanced advocates of telematics

within fleets are now turning their attention to how the technology can drive efficiency through connected fleets. Companies in the UK, Europe and North America are leading the way on this, inves-tigating ways to utilise advances in connectivity and create new opportunities to reduce costs and address complex problems such as congestion and safety. Vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) connectivity enhances the breadth and depth of data available and opens up new avenues. This can lead to more efficient routing for example, or the ability to drive integrated solu-tions across supply chains.

Investment in connected fleet technology is on the increase, supported by lower price points and smarter vehicles as well as ongoing demand for further efficiency gains, smarter logistics and supply chain integration.

In our experience at ALD Automotive, fleet managers are now considering what more telematics can do for them. Many areas are

being considered, including asset routing, mobile workforce manage-ment, V2V and V2I as cost reduction, hours of service and risk management strategies. It will be interesting to see how companies will leverage telem-atics to maximise ROI even further.

Putting the spotlight on fuel, how is this impacting long-term choices, not just day-to-day costs?The latest telematics systems can now monitor real-world fuel economy, giving fleet managers and drivers more clarity than ever before of the impact of driving style on fuel effi-

ciency and therefore fuel costs. Some fleets are embracing the opportunity, with drivers and fleet managers sharing information and addressing the behavioural issues that arise. The subsequent savings resulting from better driving are materialising, not just on fuel bills but on maintenance costs too.

But what about the longer-term picture? The ongoing collation of data enables a far more robust picture of fuel economy to be built up over time. It is our belief that this, plus some of the other trends we are seeing, will all impact upon the future shape of vehicle fleets.

Incentives to drive fuel emissions downwards have made diesel cars the preferred option for most company car drivers over the past

B E S T p R AC T I C E : T E L E M AT I C S

Telematics in 2015: this is just the beginning…The technology already brings a host of benefits to fleet managers who are using it, but so much more is possible in the future

“The beauty of telematics technology is that it’s a tool that

can be utilised in countless ways, so fleet

managers, firstly, need to decide on their priorities

and address them”

T


decade. But although diesel cars still produce less CO2 than their petrol equivalents, it appears that petrol-fuelled cars are making a comeback. A key factor is environmental performance which has universally improved; CO2 emissions have fallen across every car segment, from small models to large luxury cars.

EU legislators are now focusing on air quality which may also add momentum to the popularity of the petrol car. Euro 6 is the latest legislation to be introduced and, from September 1, 2015, all new cars registered will need to meet these standards. Since Euro 1 legislation came into force in 1993, EU regulation has led to signifi-cant reductions in various vehicle emissions including carbon monoxide (CO), hydrocarbons (HC), nitrogen oxides (NOx), sulphur oxides (SOx) and particulate matter (pM).

As major progress has been made in reducing CO2, substances such as nitrates and sulphates – produced when combusting fossil fuel – are now coming under the spotlight. One response, AdBlue, is a prime example of technical advances in environmental management. A non-toxic, non-flammable, biodegradable additive that processes the gases in a car exhaust system, it effectively removes harmful NOx emissions and helps diesel cars comply with Euro 6 regulations.

The removal of the benefit-in-kind (BIK) tax differential between

petrol and diesel cars will also change the landscape. And the market for alternatively-fuelled vehicles saw strong growth in 2014; electric cars, particularly petrol and diesel hybrids, are a more viable choice than ever before.

So looking forward to the fleets of tomorrow, fleet managers will be assessing all the information at their disposal when designing a vehicle policy. Is diesel still the right choice? More hybrids are appearing in fleets with zero/minimal BIK – will this trend continue? Will the resurgence of new, improved, more environmentally effi-cient petrol vehicles maintain its momentum? With so many changes, it is inevitable that the shape of fleets to come will be different.

Future mobility solutions is the hot topic of the moment – but why is telematics important?Intelligent mobility is all about creating the best end-to-end solution, potentially utilising multiple modes of transport including car, van, scooter, train, etc. There are countless different views on how this might evolve. Some argue it could involve giving individuals access to several options, seamlessly integrated via one digital ticket or payment mechanism, and offering door-to-door service, not station-to-station. It would mean effectively merging the acquired knowl-edge from fledgling multi-mode public transport schemes with the


convenience of a traditional ‘one person, one car’ solution, and using new technology to deliver a mobility solution with choices built in.

A key point is that this is a collaborative transport system rather than the traditional competitive one. The individual decides on their preferred way to get from A to B using one or more of the options open to them. Obviously the success of this type of solution relies upon the seamless integration of as many possible modes of trans-port to get maximum impact. Sectors and industries would need to collaborate and possibly merge in order to realise change and enable mobility integration to happen. Of course, there’s a long way to go before that becomes possible.

So how does telematics come into the equation? Clearly an all-encompassing, fully-integrated mobility network doesn’t exist today, but telematics is a powerful first step that allows compa-nies to assess what type of travel would better suit their drivers. Take the company car driver who simply commutes home to work for 75% of the time and makes additional journeys for the remaining 25%. Might the future be one where an electric vehicle is provided for day-to-day use, with access to an executive pool car for other key trips?

A fundamental shift away from the ‘one person, one car’ approach is possibly around the corner and there are signs that some are ready to make that transition. Company car drivers are more cost-conscious than ever before and BIK is a big consideration for them. Ideally they want to retain the practicality, convenience and comfort

of a company car, and minimise the taxation paid for that privilege. A future mobility solution that involves allocating vehicles or trans-port to match the journey requirements could mean individuals won’t necessarily have exclusive use of their own car, but will be allocated an appropriate car for their needs; car-sharing hubs are an example of how this can work in practice. Ultimately, the perk car could be replaced with a cash benefit that is used to ‘buy’ mobility.

It’s an exciting time to be part of the fleet industry and different providers across various sectors are now exploring the potential of

future mobility solutions.Imagine a corporate car-sharing

scheme where drivers see on screen the time available and the cost of the transport modes. They could simply show their membership card on a card reader to access a vehicle and pay by the minute from their allow-ance. They’re connected on their smart phone with real-time information about what’s available, the cost, any issues on the road or transport

networks etc. and can make informed choices about how to travel. What will all this mean for service providers? Of course, we’ll see

new technology developments that boost connectivity between vehi-cles, infrastructure and mobile devices. In the future, companies involved in the transport sector – whether fleet providers, car share schemes, vehicle rental providers, train or plane operators, even payment processors – will perhaps measure their ‘mobility share’ rather than ‘market share’ as the landscape shifts.


“A fundamental shift away from the ‘one person, one car’ approach is possibly around the corner”


wants, as well as meeting legislative requirements. It’s a compelling vision for businesses, too. In the world of mobility

solutions, companies could boost their attractiveness to employees, avoid unnecessary environmental impact, and save money.

Which brings us back to telematics… The fleets using telematics today are already saving money and improving efficiency. Impor-tantly, they’re also building a deep understanding of behaviour and journey requirements. This is crucial because without it, how else will tomorrow’s fleet managers make smarter decisions about the most sustainable vehicle or mobility solutions for their business?

Is this all futuristic pie in the sky? No, according to industry consult-ants Frost & Sullivan, as the following statistics and trends show: ■ Global car-sharing grew 50% 2012-2013 to 3.5 million members and is expected to reach 26m by 2020.■ The outright purchase method of car ownership is reducing with a growth and convergence of the car-sharing, rental and leasing sectors. Leasing will grow from 19m vehicles in 2012 to 31m in 2020.■ The role of fleet, travel and mobility managers will converge, enabled by IT platforms and service providers integrating corpo-rate mobility needs, and facilitating the move from car allowances to mobility allowances.■ The changing role of vehicle manufacturers – OEMs will increas-ingly become mobility service providers offering car-enabled, car-related, and car independent services.

Source: Frost & Sullivan 2014

Conclusion In the coming years, the mobility solutions trend may well push companies away from a ‘one car, one driver’ approach to a trans-port usage policy, opening up exciting new opportunities for fleet managers and the fleet leasing industry.

The future could mean a merging of disciplines and offering a mix of options: perhaps leased and rental vehicles, electric and petrol or diesel vehicles, car-sharing options, tickets for public trans-port and easy access to real-time support and travel planning information. partnered with the trend for employees to work longer and/or more flexible hours, often across multiple locations, it seems conceivable fleet managers may find this holistic approach to mobility is the best way to keep step with employee needs and



proFleet2 is ALD’s award-winning fleet management system using the latest in-vehicle telematics. Designed to reduce fleet cost and operating risk, improve management control and allow continuous service improvement, proFleet2 is here to help with the complex task of managing a fleet.

Developed and launched into the fleet market in 2004, proFleet2 is now an integral part of ALD’s product offering, and is argu-ably the most cost-effective and practical telematics solution available on the market today.

Already installed in more than 40,000 company cars and light commercial vehicles, proFleet2 is used extensively by compa-nies of all sizes.

Accurate mileage captureMaintaining accurate logs of all your journeys and managing fuel claims in line with HMRC requirements can be a tiresome and challenging process for employees. proFleet2 makes this process easier by automatically recording all journey data; all drivers have to do is ‘click and submit’. After registering their vehicle online, drivers can access their own journey data on a secure website, providing them with a bespoke suite of journey reports. Mileage information is fully auditable and fuel expenses can therefore be processed via driver, manager, HR and payroll accurately, efficiently and seamlessly.

Reduced expenses managementMileage capture is commonly an issue when a business needs to administer any fuel cost reimbursements, with drivers some-times forgetting to submit their business or private mileage records. Even then, there can be an issue with ‘at-work’ mileage claims that are based more on guesswork than reality. With proFleet2, organisations can be assured of accurate mileage data, fully compliant with HMRC guidelines for expense claims and submissions.

Improved driver behaviourThe advanced driver profiling module can alert management to a number of other aspects of their drivers’ behaviour. This iden-tifies potentially dangerous or costly driving such as heavy acceleration or braking, excessive speeding, over-revving, or prolonged periods of idling. Management then have the choice to take corrective action, such as targeted training or simply discussing the issue with a driver. Even when the additional driver profiling options are not selected, the presence of proFleet2 often prompts more responsible driving from many employees.

About ALD Automotive ProFleet2 for companies■ Record business mileage accurately■ Monitor excessive private mileage■ Reduce unauthorised driving■ Recover stolen vehicles■ Benchmark vehicles and drivers ■ Reward smarter, safer driving ■ Identify costly or risky driving behaviour■ Reduce the risk of recharges■ Measure the success of eco-driver training■ Manage your CO2 accurately■ Monitor actual fuel usage■ Ensure your fleet is serviced on time

ProFleet2 for drivers■ Exclusive password protected website■ Driver consent controls■ Automated journey records for expenses■ Business or private mileage at the click of a mouse■ paperless fuel expense claims■ pro-active vehicle servicing and MOTs■ High-risk journey alerts■ Stolen vehicle location facility

“It gives us greater clarity and detail of business use for every vehicle. Previously people claimed pence per mile and our view was dependent on what information they gave us”

“We’d absolutely recommend telematics 100%. It’s a tool that you can use to control as much as you need to and that brings benefits from a drivers’ perspective, a fleet management perspective and a financial perspective. As far as we can see there are no cons, only pros”

ProFleet2 facts:■ Established and proven since 2004■ Installed in more than 40,000 vehicles throughout the UK■ Designed with both fleet managers and drivers in mind■ Optimised for both LCV and car fleets■ Integrated within our core fleet management service■ Award-winning accreditation■ Ongoing remote automated unit upgrades■ Lease life-time warranty■ Arguably, the most cost-effective telematics solution in the UK

Choosing telematics is a positive step forward. Talk to ALD about the challenges you’re facing and it will discuss how it can help make your company vehicle fleet more cost effective, efficient, and simpler to run. Call 0117 908 6320, email rhys.harrhy@ aldautomotive.com or go to www.profleet2.com


HAVE YOU SWITCHED ON TO

THE BENEFITS OF TELEMATICS?

CO

2 A

na

lysis

Tru

e M

PG

Rep

ort

ing

Ma

na

ge

Dri

ver

Safe

ty

Bu

sin

ess M

ileag

e C

aptu

re

With more than a decade of experience in telematics, we know a thing or two about the benefts of feet management

technology. Whether you’re looking to reduce your costs, manage your risk, lower your carbon footprint or improve

your feet’s effciency, with ProFleet2 telematics by your side, benchmarking performance becomes an effortless

task. And with in-built driver consent you can rest assured your employees will be kept on-side too.

Keeping you one step ahead.

www.aldautomotive.co.uk

FP_FLEETNEW_241683id1737588.pgs >>AdRocket<<

By Joe Fielder,Sales and Marketing Director, BT Fleet

S ervice, maintenance and repair (SMR) has become the core activity to an effective fleet management strategy. Many leading operators realise that an optimised SMR strategy is fundamental for improving cost efficiency, driver satisfaction and competitive advantage.

This is part of a larger shift in unbundling SMR from the lease provider and handing over its management to a dedicated service

partner. There is no solitary solution, sensible levels of unbundling underpin a robust SMR strategy.

This decision requires a careful and meticulous evaluation of cost, resources and customer service impact for the business. A well-defined SMR model is capable of providing significant gains in each of these areas, and more.

In the case of SMR, best practice is not about applying one proven set of standards across all fleets: all fleets have a different utilisation profile and should be serviced as part of a bespoke schedule that best matches its operational needs. SMR best practice should then be based on planning, controlling and reporting, modelled on a case-by-case basis, while retaining flexibility to adapt to future improvement opportunities.

A dedicated fleet management partner is better positioned to offer such an agile and bespoke response.

But strategic SMR is often overlooked for the sake of simplicity; maintenance is often included as part of the lease. In this situation, it is the lease provider, not the fleet manager, who is responsible for deciding the frequency, quality and nature of the SMR solution.

With a focus on cars rather than vans, the majority of leasers have a limited grasp of SMR and its wider impact on cost, which can, in fact, be greater for a less appropriate service framework.

A tailored SMR strategy will have the fleet’s structure and usage patterns as its backbone, helping the operator respond to new market challenges and enhance its competitiveness. But how does a fleet manager get the balance right without risking operations and reputational damage, as well as achieving more with less?

The three pillars of an effective SMR strategyVehicle optimisation

The primary function of an effective SMR strategy is maximising vehicle availability. This is achieved by imple-menting a performance enhancement plan specific to your

fleet, and not just following the vehicle manufacturer’s schedule. It is the use a vehicle is put through, and not just its technical

B e S T p R Ac T I c e : S M R

Bespoke SMR strategies: more than just efficiency is at stake for fleetsService, maintenance and repair has become the core of an effective fleet management strategy

1


specifications, that have implications for SMR operations.commercial vehicles are shared by multiple drivers, pushed

harder and are subject to more stringent regulations, for instance.So, the most important step for any fleet is designing a bespoke

service schedule. This makes sure that any complex or unusual usage patterns specific to your fleet are catered for.

predictive analytics are core to building up this schedule, taking into account manufacturer recommenda-tions, in-field performance, daily oper-ating parameters and peak operating periods.

Maintenance must be planned outside working hours, at the most convenient downtimes. For example, in the case of a parcel delivery business, vehicles must be kept on the road over the christmas period and it is impor-tant that any SMR operations do not interrupt this narrow delivery window.

combine these scheduling factors with others such as vehicle profile, age, maintenance outlook, geography of operation as well as driver quality, and you soon have a compelling case for a flex-ible SMR regime.

Clear indicators that your SMR plan is not appropriate include:n Higher than benchmark maintenance spendn Increasing number of garage visitsn Vehicle shortages leaving staff idle during unscheduled SMR eventsn common faults occurring too frequentlyn Major component failures

Significant advances in fleet perfor-mance are being made through tech-nological innovations, the latest of which is ecU remapping.

This technology involves adjusting the engine control unit (ecU) to fit the operating profile of a specific vehicle. ecU remapping can be carried out alongside other SMR operations during garage visits and takes less than 30 minutes.

Just like other aspects of a good SMR strategy, ecU remapping is tailored to

operational behaviours rather than manufacturer guidelines, which allows it to achieve a balance between fuel efficiency, cO2 emis-sions and power output.

Dr Douglas parr, chief scientist and policy director at Greenpeace, claims that “ecU mapping looks to be an excellent initiative which

“The most important step for any fleet is designing a bespoke service schedule. This makes sure that any complex or unusual usage patterns are catered for”


could helpfully shift vans to lower emissions operation”.Vehicle utilisation is another key factor for any solid SMR strategy.

By looking at each vehicle in isolation and determining those that can be retired from service and those whose operating hours can be extended, substantial cost efficiencies can be achieved.

This has the added benefit of lessening environmental impact by keeping the number of operational vehicles to a minimum.

Driver optimisationSMR tends to be seen as a technical field, when in fact behavioural change among drivers can account for a considerable reduction in downtime.

Driver optimisation can be measured further than simple training methods, since SMR provides the fleet manager with a touchstone to assess accidental and unreported damage.

capturing data and quantifying this process can expose those drivers with an excess number of incidents, as well as relating driver behaviour to factors such as tyre wear.

Drivers can also provide feedback into the SMR process directly. In addition to telematics and data capture, it is important to gather feedback from drivers about the performance of their vehicles.

Drivers’ comments can be correlated with analytics to predict performance and reliability issues before they become a problem that leads to vehicle downtime.


2


Garage optimisationIt is also integral to focus on the garage itself as part of any SMR strategy.

ISO compliance and documented standard processes are placing increased pressure on budgets as training and devel-opment needs are met and new equipment added.

In order to offset this expenditure, garages are turning to techno-logical innovation to increase the efficiency of core tasks and to standardise procedures across the entire garage network. In many cases, this allows the garage to outperform both manufacturer and third-party benchmarks.

A vehicle can be discharged only once all information has been captured, documented and reported, meaning that the speed of the handover and sign-off are crucial factors. Where possible, commu-nication within the garage network must be streamlined. One of the areas in which we can foresee savings is on warranty work. Since a manufacturer liaison is often required, it is important to have dedicated staff to pursue and resolve issues. This saves garage technicians from losing time chasing paperwork, instead devoting their skills to crucial maintenance work.

A similar efficiency applies to collection and delivery; a vital service that frees up the vehicle driver for use on another task.

This vehicle handover can be completed by dedicated garage staff, rather than by technicians whose expertise would be lost during this handover window. Leading garages have managed to achieve a 10-15% lower cost for collection and delivery services by

In conclusionService, maintenance and repair is not just about enhancing efficiencies and cutting costs behind the scenes. Any commer-cial business will also see significant gains in service delivery as a result of vehicle optimisation and a bespoke mainte-nance schedule.

With fewer vehicles on the road, fewer accidents, reduced downtime and environmentally-minded driving behaviour, end customers are going to see better service and all for a lower cost.

SMR, then, is not just an overhead to be addressed when breakdowns and accidents occur. A well-considered partner-ship with a fleet manager allows SMR to be treated as a process; a process that can be refined to generate greater cost efficiencies and enhanced service delivery.

introducing dedicated drivers. It is certainly true that this incurs an additional cost to the garage, but it is a negligible one compared to the waste of higher value resources.

These changes in infrastructure put further responsibility on the garage and can be achieved much more readily through the use of a dedicated fleet management partner. This outsourcing also frees up on-site staff and property for other uses.

3



BT Fleet’s culture, resources and perspective on the world of SMR are unique.

It has evolved from serving just BT, one of europe’s largest commercial vehicle fleets, to proudly offering a number of external customers the same “BT” experience.

With all aspects of service delivery being focused on mini-mising vehicle off-road time and optimising the total cost of transport, we draw from a unique combination of fleet owner/operator insight, an owned garage network and deep under-standing of customer needs through our technology to shape our approach to SMR best practice.

The importance of a bespoke SMR solution was demonstrated by our work with cash management provider G4S. The market that G4S operates in is unique and, as a result, its vehicles require modification to ensure security and adaptability for transporting high-value goods. G4S wanted assurances that its fleet management provider could understand the complexities that arise from managing a unique fleet and exceed availability targets while delivering improved efficiency and cost savings. G4S recognised the benefits of our nationwide network of more than 600 garages to ensure a local and one-stop-shop service. We supplement this with a dedicated ‘daily clinic’ service, whereby specialist technicians visit G4S locations and under-take on-site maintenance.

The value of such partnerships often lies in the detail. G4S wanted to identify why 75-90 vehicles were breaking down each month. A team of BT Fleet technicians identified the fault as being related to a lack of charge being delivered through the vehicle battery. We installed 1,500 absorbed glass mat batteries across the G4S fleet, reducing breakdowns by 70% and greatly improving efficiency.

The value of BT Fleet’s network of garages was also realised by rubbish clearance business AnyJunk. The company has grown rapidly since its launch in October 2004, and this increase in workload made it imperative that AnyJunk had a fleet supplier with excellent coverage and experience with complex commercial vehicles.

BT Fleet offered AnyJunk fixed labour costs across its network of garages, ensuring certainty of price with no additional costs or hidden extras. Its nationwide garage network gives AnyJunk confidence in protecting its duty of care respon-sibilities and that pMIs (periodic maintenance inspections) under-taken by VOSA (Vehicle Operator Service Agency) are successfully completed on all vehicles.

Having evolved in-line with market needs, BT Fleet is at the forefront of meeting the unique demands of the operational fleets

BT Fleet’s SMR solution

and our SMR solution offers great potential for fleets to partner with a specialist provider.

Undoubtedly, being able to leverage optimised garage services, innova-tive technology and bespoke vehicle schedules yields better results. There is also the benefit of working closely with a partner who understands the specific needs of a fleet, working closely with the fleet manager to design the smartest solutions.

BT Fleet is committed to being such a partner. Joe Fielder, sales and marketing director, says: “We

do our best work in this industry when we all share and collab-orate together. Listening, learning and sharing is the only way of ensuring what we deliver evolves and remains best in class.”

Telephone: 0800 032 0012 Email: [email protected] www.btfleet.com

“BT Fleet continues to draw on a unique combination of fleet

owner insight, an owned garage

network and deep understanding of customer needs”


BT Fleet We’ll look after your fleet, you look after your customers

Keep your fleet on the road to maximum efficiency

To find out more call us on 0800 032 [email protected] www.btfleet.com

With a UK wide network of 65 owned garages and over 500 contractor

garages, BT Fleet focuses on helping you optimise vehicle availability

and cost efficiency through dedicated, award winning SMR.

Our services and innovations give you the advantage of the industry's

leading range of cost saving initiatives.

Take advantage of transparent, unbundled SMR and rack up the benefits.

Unbundled SMR from BT Fleet Our engine remapping could deliver a 10% saving in fuel usage and up to 20% reduction in CO

2 emissions.

FP_FLEETNEW_251650id1739447.pgs >>AdRocket<<

Documents

Managing an efficient fleet 2015