The Car and Truck Fleet and Leasing Management Magazine

Measure Yourself by Benchmarking

February 2005, by Ed Bobit - Also by this author

There is nobody so irritating as somebody with less intelligence and more sense than we have. -Don Herold

Do not always assume that the other fellow has intelligence equal to yours. He may have more.-Terry Thomas

The difference between intelligence and education is this: intelligence will make you a good living.-Charles F. Kellering

If everybody contemplates the infinite instead of fixing the drains, many of us will die of cholera.-John Rich

 

Most fleet managers I've met in my life were pretty intelligent. The smarter ones were always eager to learn even more.

When we conducted a serious "leasing" study late in 2004 and after collating more than 1,200 returns, I wanted to immediately start hitting up fleet managers to see what their "outsource relationship" quotient would be. Obviously, it would have been fun since I had all the answers, and that's a significant edge.

Now, you have to understand that almost every fleet manager I have ever talked to feels strongly about their strong factory ties. They not only talk about how their local factory rep looks after them (or doesn't, in some cases), but they name drop the brass' names from Detroit or wherever.

The strange thing is that an observer like me rarely hears the same kind of camaraderie between the fleet manager and the lessor. That's understandable because, as our study among all commercial fleets of 25 units or more shows, only about half of the accounts lease. (Large fleets with 300+ lease 57.2 percent of the time).

While I cannot share the entire study results with you (it is proprietary, for the most part), I can help you see where you fit in with your fellow fleet managers. This is benchmarking at its best because we actually broke out the answers by number of units operated; i.e., 25-99, 100-299, and 300+.

When asked about how often you send out an RFP for fleet management services, most fleets responded "as needed" and nearly 20 percent said "every 3 years."

On "which companies are selected to quote," the answers ranged in the half-and-half columns between the "fleet" and the "finance/purchasing" departments. As the size of fleet became larger, the selector was more heavily the fleet manager.

The larger fleets also reflected the increased influence of the "strategic sourcing group," as we might expect.

The allied question of "does your company employ a strategic group in selecting a fleet management supplier," the answers were almost predictable. In the small fleet group, less than 3 percent had such a group. In the middle group, nearly 20 percent used the group; and in the largest fleets, more than 77 percent have that kind of a setup.

Even the smaller fleets, surprisingly, use multiple lessors in 55 percent of the cases. As fleet size increases, so does the use of more than one outsource entity; large fleets scored over 63 percent.

If there was a "shocker" to me, it was the collective answers to the question, "How many years have you used your current lessor?" OK, big picture: we know how often RFPs are sent out, we know how often these accounts are hit with a personal call from their array of lessors, and we know who's in on making the selector recommendations and who's in on the actual selection.

What's your guess (answer)? Now benchmark. The smaller fleets retain their lessors for more than 10 years nearly half the time. The middle fleets only less than 28 percent for 10 years; and the big fleets keep 'em for 38 percent of the time.

Ten years is a long lime. Some fleet managers don't last that long in the position. Some lessors change their personnel pretty often as well. Is it loyalty? Is it a great local rep?

We don't know the answer, but probably, the current lessor remains competitive with every RFP, and there's a good rep, and loyalty boils down to the messy process of changing lessors - a hardship on both parties and simply a pain in your butt. But, you can call that loyalty if you like; it's all right with me.

I hope this helps you in your benchmarking efforts.

 

Twitter Facebook Google+

Comments

Please note that comments may be moderated. 
Leave this field empty:
 
 

Fleet Incentives

Determine the actual cost of owning and running a vehicle in your fleet. Compare vehicles by class and model.

FleetFAQ

Fleet Management And Leasing

Merchants Experts will answer your questions and challenges

View All
Sponsored by

Founded in 1954, the Car and Truck Renting and Leasing Association (CATRALA) had as its credit "To promote sound public policy with respect to the leasing and renting of motor vehicles without drivers."

Read more

Blog

Market Trends

Mike Antich
Avoid Repeating Past Inefficiencies: Build the Truck to Match Today’s Application

By Mike Antich
I asked one fleet manager how he spec’ed replacement trucks for his fleet application. He related that many years earlier an OEM rep spec’ed out his trucks and he has been using the same formula ever since. While this may work in some cases, specifications should be defined by today’s fleet application to ensure the replacement truck is designed to accommodate current operational requirements rather than trying to make your operation conform to trucks spec’ed for yesteryear’s requirements.

Conduct an Efficiency Audit to Eliminate Waste in Your Fleet Budget

By Mike Antich

View All

Driving Notes

Amy Winter-Hercher
2017 Subaru Impreza

By Amy Winter-Hercher
The redesigned 2017 Impreza has been built on Subaru’s new platform that improves stability and reduces road noise and vibration. The fuel-efficient, all-wheel-drive Impreza makes for a good commuter vehicle — available in either a sedan or hatchback.

2017 Mazda CX-5

By Eric Gandarilla

View All

Nobody Asked Me, But...

Sherb Brown
Yes Virginia, There is Depreciation

By Sherb Brown
Depreciation is a necessary evil in our industry. Knowing your risks and knowing your OEM partners won’t make depreciation go away but it can make it more manageable.

Are You a Fleet Manager or Are You Just Managing a Fleet

By Sherb Brown

View All

Data Points

Dylan Brown
Does Telematics Branding Translate to Adoption?

By Dylan Brown
We asked over 750 fleet professionals questions about the prevalence of each provider in the market and their brand recognition.

How Fleet Size Dictates Telematics Needs

By Dylan Brown

View All

In Memoriam: Coach's Insights

Ed Bobit
Thinking of the Newbies of the Future

By Ed Bobit
A lot has changed in the past 10-15 years, so we can only imagine this momentum will continue into the next decade-plus. How will this change impact the fleet manager of tomorrow?

Managing a Car vs. Work Truck Fleet

By Ed Bobit

View All

STORE

Up Next

More From The World's Largest Fleet Publisher