Auto Focus

Fleet Management? They Have No Clue

It’s all well and good that the general public doesn’t really understand fleet management — though there are a few situations it sure would help.

The general public has no clue about fleet management, and never will.

Most outsiders don’t understand the different fleet sectors — commercial, car rental, and government — nor the numerous permutations from there: municipal, dealership, logistics, utility, public busing, pupil transportation, long haul, package delivery, vocational, and sales, on down to the local dry cleaner with eight step vans.

I’m sure I missed a few. Each permutation is its own discipline; each takes years to master.

Ask your friends and relatives — “lay people,” from our viewpoint — to explain your job, even after you’ve explained it to them many times. You settle on the phrase “managing vehicles” because it’s easy for them, but does not begin to convey the job’s complexities.

“Managing vehicles” — is it a science or an art?

The job today is more science than art, except in one often overlooked way. Fleet management is a people business. It’s not the layperson’s place to understand the lengths you go to manage drivers to maximize productivity while keeping them safe on the road. It’s not easy to explain the art of negotiating the procurement of 100 compact crossovers while almost simultaneously securing a buyer for those crossovers in 16 to 48 months for the right price.

They won’t understand the art of cajoling auction personnel for a little love in the lanes, nor will they comprehend negotiating with your lessor on a closed-end lease when your drivers blow through the mileage caps.

The science of fleet management is your ability to use ever-increasing reams of data to control costs and improve efficiencies. Do you go with a finance lease or operating lease, open or closed? Do you finance the transaction or pay cash? Which choice returns the best cents per mile: a new Euro-style van with a rack-and-bin package or a three-quarter-ton pickup with a truck cap and slide-out beds? And does the best financial solution still work for your drivers?

You have to stay current with technology, provided the benefit at least doubles the investment. Do you stick with your current routing software or go to an enterprise telematics system? And after you implement the telematics system, how do you process the Big Data? Forget about it.

This is all a bit of feel-good fun until fleet management intersects with other real-world issues.

How will the government come to understand that the cost of engine technology to comply with new greenhouse gas regulations won’t be offset by the savings in fuel efficiency, not by a long shot?

Surely the general media, consumer groups, and legislators understand the need to ground a recalled vehicle that may be potentially unsafe, but it’s much harder to write rules that take into account the repercussions of having to ground vehicles for two months while waiting for parts to become available.

When it comes to paying for loss of use in car rental, try explaining to an insurance carrier that a car rental company does not need to separately show lost profits to collect.

I’ll even chalk up a lack of understanding of fleet management to stock devaluations. When Ford announced a plan to enter the carsharing market, both Hertz and Avis Budget Group’s stocks immediately dipped on fears that “the auto manufacturers are renting cars.” Investors seem to believe that the world is flat when it comes to entering the car rental business. They don’t understand the years and brainpower needed to perfect fleet management.

The world is now full of slick apps that promise to make the world a better place. In many ways, they’re building better mousetraps and changing the transportation paradigm. But if fleet management is involved, it’s often overlooked as a key indicator of profit and loss. Apps are sexy, fleet management is not. It will always be so.

Here’s to the art and science of fleet management. But don’t go shouting from the rooftops; you’ll just have to toast amongst yourselves.

Comments

  1. Espen Dyb Lovold [ May 3, 2016 @ 01:03PM ]

    As a former head of fleet planning for a major European car rental franchise, I am very familiar with the lack of good technology for fleet procurement planning. There are countless tools and services to aid a car rental company's revenue side, but few to strengthen the fleet procurement and fleet management process.
    Car rental companies often have huge amounts of data, but it is another big step to move from generating reports and forecasts to generating actual actionable fleet recommendations (buy, sell, extend, reduce) for every vehicle and category in every rental location. Having spent the last 2 years building such a system, OptimalCar, I know it is not easy, however the impact on profitability of this can be significant. It does not replace the fleet manager, but enhances their productivity and negotiating position.....

    Espen Dyb Lovold (Optimal Outputs)
    [email protected]

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Author Bio

Chris Brown

Executive Editor

Chris is the executive editor of Business Fleet Magazine and Auto Rental News. He covers all aspects of the fleet world.

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