Fluctuations in fleet size

The SME market will be a growth area for new registrations in the year ahead, both fleets and their suppliers reckon. Giving an overview of the sector, Richard Schooling, CEO of mobility specialist Alphabet, said: “The SME market has seen strong growth in 2015, which is expected to continue in cars and vehicles moving forward,” he says. “The UK economy is changing – corporates are generally staying the same size or are downsizing, so the growth in economy is set to come from SMEs.”

The majority of the SME companies we spoke to support this view, and saw fluctuations in their fleet numbers last year, or expect to see growth in 2016. There had also been a focus on vehicle renewal, “Our fleet size has stayed the same, although we have upgraded most of our vehicles with the latest models,” says Jed Husain, fleet controller, of racecourse broadcaster RaceTech (fleet size: 20 cars, 30 vans). “We plan to increase our fleet size in 2016.”

Some fleets did reduce in 2015, however; “We’ve experienced a 20% reduction in fleet size, due to the financial reductions experienced by all of the public sector,” says Mark Green, fleet manager at Royal Borough of Windsor & Maindenhead Council (20 cars, 40 vans). “New ways of working have had to be found and the reduction of our fleet has adjusted accordingly,” he adds

Manual administration still popular

Almost all of the SMEs questioned still manage mileage capture and expenses manually, citing prohibitive costs as a key reason for not investing in an online system.

“Currently we use a quarterly manual return,” says Gary Chippendale, head of finance at protective clothing specialist Respirex Ltd (10 cars, 8 vans). “I would love to use an online solution with full telematics, but the cost per vehicle per month just does not justify the expense for our fleet.”

Other concerns with online systems included data security; “We deal with mileage capture using manual notification – I would consider an online system but there are suspicions surrounding confidentiality,” says Kevin Byass, director of inflatables manufacturer ABC Inflatables LTD (mixed fleet of 26 vehicles) – and the time it would take to convert to an online system.

One fleet that did make the move to online systems is the Energy Saving Trust. “We have just implemented a new, online expenses/management system called Selima,” says Paul Gambrell, transport consultancy manager (9 cars). “Prior to this our expenses were dealt with using a finance system.” Other approaches to mileage capture and expense management include the use of cash allowance schemes for employees.

“We have implemented a cash allowance scheme this year, so the individuals have been sorting out their own systems to record data,” explains Simon Greene, fleet manager of facilities management and building services company ARH Group Ltd (30 cars, 153 vans). “We would be interested in an online system to manage cash allowances if more employees take it up.”

In general, the SME fleets were divided as to whether they would consider changing to an online system in the future, with a number saying they would need to do an in‐depth cost/benefit analysis before switching

Positive impact of driver training

Awareness of duty of care and legal responsibilities was high among the SMEs, with every organisation acknowledging the legal importance of ensuring drivers are deemed safe to be out on the road.

Making provision for driver training was highlighted as a key part of the duty of care strategy for several companies, including the Institute of Advanced Motorists.

“Given that we are a road safety charity, we take driver training very seriously,” says David Batten, purchasing & facilities manager at IAM (22 cars). “We provide both online and on‐road assessments and training and use our own (Fleet Management Portal (FMP)) driver risk management system for our staff.”

“We are also currently implementing an online driver training programme through our new health and safety manager,” says Simon Greene. “We hope to have more detailed investigation into any accidents or incidents that occur.”

Reducing insurance risk and improving fuel efficiency were cited as secondary benefits for investing in driver training.

Getting drivers engaged with driver training was described as “more difficult” by a few of the SME fleets.

“We have offered voluntary training, but this was not taken up by anyone,” reveals Gary Chippendale. In these cases, extra importance is placed on the provision of fleet driver policy information.

“We distribute leaflets concerning safe driving behaviour from Brake and other fleet providers on a regular basis, and insist that all vehicles are maintained to manufacturer’s recommendations,” he adds. “All drivers’ licences are checked annually for validity to ensure compliance.”

Use of tracking for safety purposes

Telematics units with tracking capabilities were revealed to be the most popular in‐car technology solution with the SMEs, with fleets including the Royal Borough of Windsor and Maidenhead Council citing the safety of remote workers as the key incentive for investment.

Other motivations included ensuring the security of goods being transported, and the secondary benefits of improved driver behaviour on tracked vehicles.

“Since installing GPS and VHF trackers on all our vehicles we have had less speeding incidents and fewer accidents on the fleet,” reveals Jed Husain.

“We have one car fitted out with telematics, because the individual driver needed to be monitored,” adds Gary Chippendale. “He has now changed his habits and we are much happier with him.”

Concerns about the expense of installation were highlighted by the reluctant fleets as a barrier to use, but two respondents were currently in the middle of trials.

“We have been looking at telematics for a couple of years and recently carried out a trial of one unit,” says David Batten.

“The purpose of our trial was to understand the parameters and limitations of using telematics, including its programming and how this relates to advanced driving. We risk assess our drivers, rather than use telematics, or dash cams, currently, but I’ll review these options and have no objection in principle to them.”

In general the fleets were not interested in the installation of advanced technology such as dash cams, although the potential safety and insurance reduction benefits were acknowledged.

Service from dealers

There has been a renewed focus on winning and retaining SME business for a number of manufacturers over recent years, and these efforts were recognised by the SME fleets.

“Considering the size of our fleet there are a number of manufacturers who try very hard to work with us and we appreciate their involvement,” says Kevin Byass. However, the praise was far from unanimous.

“We find the premium brands somewhat less helpful regarding demos and maintaining contact,” he adds.

This opinion about varying levels of service was echoed by other respondents. “The level of attention given greatly depends on which manufacturers/supplier you are talking about,” comments Gary Chippendale. “Jaguar Land Rover offers good service to small fleets like ours, as does Kia. BMW has recently changed tack and seems to be adopting the Jaguar Land Rover approach, but other manufacturers could do better. Service can also depend on the local dealers’ staff and how proactive they are with their prospect list.”

“I receive different levels of service from different manufacturers,” agrees Jed Husain. “Renault and Iveco, for example, offer me an outstanding service. Our service levels are fine, but I do believe that other companies may not get such good service if they were very small.”

Further comments that more still needs to be done to make small fleets feel valued was provided by Simon Greene, “The smaller the fleet the harder you have to push for service levels and pricing,” and Paul Gambrell, “I still believe volume unlocks greater support and discounts.”

Outsourcing of fleet management

Responsibility for managing the SME fleets was split between dedicated fleet managers and other roles as diverse as head of finance and purchasing manager, reflecting the trend for the outsourcing of fleet and grey fleet management away from the traditional fleet manager role.

“We are becoming an endangered species,” comments Mark Green.

“I carry out the fleet manager’s role, but with other responsibilities, for our head office building and advise on health and safety issues,” says David Batten. “There are many challenges for SME fleets, as there isn’t an individual, or ‘team,’ who just manages this area.”

This issue of fleet management being assigned to adjacent departments and a lack of consistency in approach was highlighted by Paul Gambrell, “In most SMEs we deal with, the ‘fleet manager’ role is very much a task within their greater role,” he says. “They generally have limited knowledge and little support from senior management.

Maintaining knowledge of the rapidly changing environment of vehicle technology, health and safety responsibilities and fuel types are just some of the concerns.

“The challenges facing smaller fleet operators are in some ways even greater than for the big fleets given the greater flexibility in operation requirements together with the ever‐increasing need to meet cost and environmental targets. It is an area that we at the EST are looking to provide greater help and support in,” he adds.