While it’s common to hear about the challenges of managing diverse CV fleets with a mix of funding types and suppliers, taking a step back and thinking holistically can enable businesses to be even more efficient in how to manage their transport needs despite the complexities.
There are four planning stages in this process:
1. Understand your current purchasing context in order to decide how to evolve your current fleet.
Re-examining your van and truck acquisition strategy every five years or so can ensure your fleet stays ahead in a fast-changing world.
Have economic factors shifted and require a change to your servicing, maintenance and repair needs? Is your transport strategy of 2021 still right in 2025?
One example is reviewing whether there is capital tied up in legacy vehicles that would be better managed through more flexible solutions. Other factors are more complex. Is your vehicle acquisition plan aligned to changing legal, technology or financial macro-factors, such as new sustainability legislation or the move towards EVs? If not, it may be time for a change of approach.
We find many organisations need to get a clearer picture of the background and context of their fleet to establish all the current fleet suppliers and finance packages so they can plan the best way forwards. Often this means going back and identifying the detail of the finance packages in terms of age, mileage and specification to help establish whether it makes sense to end or extend leases or change the lifespan remaining on purchased vehicles.
This assembled information starts to paint a picture of how your current fleet supports or falls short of your current business needs.
2. Develop an ‘optimum’ future fleet framework for your financial acquisition strategy.
The financial model is a key consideration as you look forwards. This is important in terms of driving value from your fleet investment and managing the total cost of ownership.
It’s also about considering fleet acquisition alongside investments that you may be planning in other parts of your business and identifying financial constraints that may arise from many factors, not least the wider economy.
Three important questions are, how much spare capital do you have, and what do you need? What is happening to interest rates? What other investments are you making? Have you evaluated the total cost of ownership? Identify which funding model or models will be preferred going forward to best fit the balance sheet both today and in the future.
A further consideration is a landscape of rapidly evolving vehicle technology. A more flexible approach to finance will provide more options should you choose to upgrade later.
It’s vital to analyse how much of the fleet needs to be fixed and how much can be more flexible, to determine what number and types of vehicles are needed year-round and which are more seasonal.
Other factors include how much of your fleet needs to be on call or available at short notice, specialist vehicles that might only operate at key moments, and replacement options for vital transport requirements that cannot be delayed for repairs.
Suppliers and partners can help by analysing the current fleet and providing utilisation and VOR data. There are many fleet management options and platforms that can help streamline your operations.
3. Identify how best to manage the mixed fleet
Managing a fleet that encompasses different vehicle types, funding packages and suppliers is a key challenge.
Examine if you need an in-house fleet team and IT systems to manage all the disparate elements, or whether an outsourced service is more appropriate. The latter can offer a valuable alternative perspective and access to better and more timely information and advice, ultimately leading to better decisions. It also removes a lot of the administrative burden as well as easing the burden of ensuring compliance.
In essence, how closely do you need to manage the fleet? This varies from company to company, with some preferring to monitor rather than control – though even the most hands-off organisations will still need systems to assess compliance with regulations and supplier performance.
Determining the best management solution also needs to take account of the impact of a mixed fleet on employees. If drivers don’t have allocated vehicles, they need to know how to handle a breakdown or accident scenario on the road if they are shifting between vehicles from different suppliers. Who do they call and where can they get the best support?
This isn’t just a question of inconvenience. Time spent working out basics like the right number to call, or which repair provider to approach, is time your drivers could be on the road. A single support contact point across the fleet can be a significant factor in reducing vehicle and operational downtime.
4. Establish protocols and timescales for reviewing and monitoring the fleet
Managing a commercial vehicle fleet is driven by process and compliance, which requires transparency and visibility. This can be much harder when dealing with multiple suppliers and funding methods.
Taking regular stock of your fleet metrics and performance will give you the data necessary to work with each supply partner to identify improvements. That will enable you to challenge existing fleet practices and ensure that every single commercial vehicle is working to the right level of capacity.
The more complex your fleet, the more vital it becomes to set clear goals and ensure you understand the detail of the operations. Building in clear planning, processes and flexibility will ensure the business gets the best choice and better value, while staying fully compliant and ensuring a great experience for your drivers.
Author: Danny Glynn, managing director of Enterprise Flex-E-Rent
