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Market Trends

Fleet Policy Compliance Crucial to Cost Control

October 4, 2012, by Mike Antich - Also by this author

Does your corporate culture encourage compliance with fleet policy? It should, because fleet policy is a crucial component of a company’s overall cost-control strategy. In my discussions with fleet management companies over the years, they tell me that the best managed fleets tend to be those that adhere to a written fleet policy. It is these procedures and regulations that determine the type of fleet each of us operate and its characteristics. For instance, by creating policy such as who is eligible for a company vehicle, you are, in effect, determining the size of your fleet.

It is very expensive to operate a company-provided fleet. Typically, fleet is one of the top five categories of non-product-related spending at most corporations. All too often, however, managers attempt to control fleet costs on the backend. The best time to control cost is before it occurs and the way to do this is through establishing policies and procedures that inhibit unnecessary spending and protect corporate assets. By establishing fleet policies up-front for expense control, and by making a concerted effort to ensure these policies are uppermost in the minds of your drivers, you will reap substantial cost savings. Fleet policy institutionalizes the mechanisms to curb money-wasting behaviors.

A fleet policy must not “sit on a shelf.” It is your responsibility to communicate policy to your drivers and, just as importantly, to their managers. Each driver should know the rules governing the use of a company vehicle and what actions will be taken for non-compliance. A common problem is that the fleet manager communicates policy to the drivers’ managers, but word doesn’t get down to the individual drivers. To avoid this problem, many companies teach policies and procedures regarding the use of company vehicles as part of the new-employee orientation and provide online access to fleet policy. Another recommendation is to set aside time at company meetings to make fleet policy presentations to drivers and managers. For drivers who work at regional offices, hold periodic teleconferences or webinars. During these meetings, re-emphasize the importance of policies, especially as it is designed to control costs and ensure driver safety.

A Living Document
Your fleet policy should be a living document updated annually. As changes occur within your company, revise your procedures to reflect these changes. Likewise, eliminate outdated policies. Also, as part of your annual fleet policy review, survey drivers to give them an opportunity to express their opinions or dissatisfaction about fleet policies that govern them. Every affected department should be involved in the process of creating fleet policy.

When developing or re-evaluating fleet policy, solicit the participation of all affected departments, such as sales, administration, procurement, human resources, and finance, along with all vehicle user groups. By involving them in the decision-making process, you will increase the likelihood of buy-in and support of fleet policies. It is critical that a fleet manager have the authority and backing of senior management to address a driver’s inability to properly operate and maintain an assigned vehicle. Also, it is important to “cc” supervisors who have drivers not in compliance with fleet policy. This practice goes a long way toward reducing and, sometimes, eliminating driver compliance issues.

When dealing with driver-related problems, you shouldn’t create a new problem in the course of resolving one. The surest way to do so is to make a policy exception. It is critical that you make sure all drivers uniformly adhere to company fleet policy. If your company becomes embroiled in litigation involving a company vehicle because of a problem driver, these exceptions and prior policy precedents can be used against you. The most carefully developed policy can be torn to shreds by a precedent-setting exception, which could be used to accuse you and your company of negligent entrustment and/or negligent retention.

Just because your company has a documented fleet policy doesn’t mean drivers are following it. Communicating fleet policy is not a one-time event. As a fleet manager, it is your responsibility to promote driver compliance with fleet policy. To ensure fleet policy remains uppermost in the minds of drivers, many companies stress the need to regularly re-communicate it to them. When policy is constantly re-communicated, you spend less time disciplining drivers for policy infractions.

In addition to in-house meetings and teleconferences, companies use a variety of other methods to reinforce fleet policy, such as e-mail reminders, corporate Intranet, paycheck stuffers, newsletters, and award recognition programs. It makes no difference how you do it. The important point is to understand the need to consistently remind drivers about these corporate policies.

No policy can anticipate all possibilities; consistency in dealing with all the drivers assigned company vehicles at different locations is essential. To accomplish this, it is crucial for senior management to give the fleet manager the appropriate authority to address non-compliance by drivers and those departments’ assigned vehicles. This will go a long way toward reducing, and sometimes eliminating, driver compliance issues. This not only controls expenditures, but also protects your company from potential liability exposure. Now is the time to talk about fleet policy.

Let me know what you think.

[email protected]


  1. 1. Bruce Kosaveach [ October 08, 2012 @ 08:52AM ]

    Mike, Hope things are well with you! Long time no talk. Wanted to compliment you on the recent “Policy Compliance Crucial to Cost Control” article in AF’s eNews. I always read what you have to say in your Market Trends and many cases forward to some customers where applicable. As difficult as it must be you always come up with new topics and good thoughts – thanks and keep up the good work!

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Mike Antich

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Mike Antich has covered fleet management and remarketing for more than 20 years and was inducted in the Fleet Hall of Fame in 2010.

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