More than half of fleet managers are making decisions
entirely on cost grounds, according to research from multi-marque
fleet lessor Alphabet. Georgina Lavers reports.
Some 51% of fleet managers are making their business
decisions based entirely on expense and, although 50% of fleet
operators report costs remaining static over the past year,
expenditure remains a major worry.
These are just two of the findings
of the Alphabet Fleet Management Report 2011. The report
is based on a survey conducted by the BMW-owned company of fleet
decision-makers from across UK industry and the public sector.
When asked how they were looking to
lessen outlay, participants in the survey stated fuel efficient
technology, fuel cards, outsourcing and negotiating with fleet
providers as their main strategies.
Some 83% of respondents reported
that their fuel bills had increased ‘substantially’ and half said
they were prioritising fuel efficient technology to redress the
Other fuel-saving methods revealed
included evaluating business journeys (48%), changing to more fuel
efficient vehicles (40%) and introducing fuel cards (35%).
Nearly 40% of private sector fleets
in the study have turned to fuel cards in the past 12 months,
suggesting that the suspicion with which they are viewed is
gradually beginning to disperse.
Outsourcing of fleet management as
a whole was on the rise, with 12% of the sample outsourcing their
fleet management, a three-fold increase from the year prior.
Alphabet GB chief executive Richard
Schooling said: “The increasing burden of legal, financial and
technical specialisation and complexity surrounding the management
of vehicles will weigh heavy on in-house managers, who will have to
do more for less in the coming year.
Focus on delivering
“The focus for fleet managers now
must be on delivering significant savings in both time and costs,
which can be achieved through outsourcing.”
Half the fleets surveyed approached
suppliers to try to negotiate lower prices, but surprisingly, most
fleet decision-makers also appeared to be content with their chosen
method of funding, with only 4% of the sample having changed their
funding in the past 12 months.
Although mileage is one of the most
significant operating costs, respondents expected to reduce it over
the next year by just 3%. Alphabet attributes this fairly
pessimistic figure to fleets having little scope to reduce the
mileage of commercial vehicles and public utility vehicles.
Ongoing financial constraints on
fleet budgets have not deflected managers’ focus on driver safety,
which topped respondents’ list of concerns with regards to the key
issues when operating a fleet.
Doubtless influenced by
manslaughter legislation, the proportion of fleets with risk
management policies has risen to 98% today compared with only 37%
five years ago.
Speeding, mobile phone use and
alcohol were fleet managers’ main safety worries, although driver
fatigue came unexpectedly low on the scale of concerns.
With regards to influencing driver
behaviour, organisations are more likely to apply penalties to
discourage bad behaviour – making drivers pay for end-of-contract
wear and tear charges – than to offer rewards.
Looking ahead to next year, the
report revealed private sector fleets were optimistic about
operating budgets increasing again, although public sector
organisations had a gloomier outlook.
Some 27% of private sector
respondents said they expected their fleet operating budget to go
up in the coming year, although a smaller number (21%) anticipated
that the size of their fleet would also increase.
In the public sector 56% expect to
see their budgets cut, while 44% expect that the size of their
fleet will fall.
Schooling added: “Fleet managers
continue to endure considerable pressure to reduce costs as
organisations adapt to sluggish economic growth, and in the public
sector, to spending cuts.
“However, businesses should not allow expediency to take
priority over implementing strategic changes that address the root
causes of fleet operating costs.”