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Fleet Management Spans the Globe

Managing fleets that cross oceans, continents, and national borders presents many challenges, including language, diverse vehicle requirements and expectations, and uniform policy development.

May 2009, by Cindy Brauer & Lisajoyce Vergara

Managing vehicle fleets spanning national and continental borders presents far-ranging challenges beyond language barriers and time zones. Differences abound across the global landscape in regulations and accounting standards, cultural sensitivities, business practices, political and economic stabilities, labor skills, and technology levels.

While these challenges can be immensely vexing - and perplexing - many global fleet managers enjoy the task, finding satisfaction in the critical corporate function they provide.

Global Issues Range Widely

The "sheer diversity of the fleet across the globe," poses obstacles in managing an international organization, said Gayle Pratt, director, global fleet, global supply chain for Ecolab. Headquartered in St. Paul, Minn., and operating in more than 160 countries, Ecolab provides cleaning, sanitizing, food safety, and infection prevention products and services to a variety of industries.

A former NAFA Fleet Management Association president, Pratt is responsible for a nearly 13,000-unit fleet, primarily vans and light-duty trucks.

"We have the same job title in one country aligned with a specific vehicle, and in a different country, that same job title requires a completely different vehicle. Often this is due to job territory size (miles driven) and cargo capacity needed to fulfill the job tasks," she said, explaining the fleet's variability.

In addition, "It is very important to recognize the differences in employee expectations for vehicles," Pratt said. Employees in countries abroad typically prefer to drive a locally manufactured vehicle, she noted.

While Ecolab establishes agreements with OEMs, said Pratt, another challenge "is to leverage volume when we have a 'user chooser' fleet policy for sales and management vehicles worldwide."

Pratt believes the difficulties presented by global fleet management aren't for every company. Companies that operate a service-oriented fleet versus a sales and management fleet "are likely to be more successful in implementing fleet policies and strategies globally," she said.

"The top immediate challenges" for Joe LaRosa, at Merck & Co., are the "emerging markets in Russia, Turkey, and Poland. The immediate expansion of pharmaceuticals in these 'not so' mature leasing markets is problematic."

Headquartered in New Jersey, LaRosa, director of global business services, oversees a global fleet of 22,200 vehicles.

Complications in managing a fleet in these developing regions, said LaRosa, include "infrastructure to deliver vehicles, lack of maturity in the leasing market, residual values that are completely guess work, interest rates that would make your eyes pop out, complications with registrations with the local authorities, accident management, maintenance management, etc., etc."

All these processes are in their infancy, LaRosa explained.

Obstacles also arise when LaRosa attempts to "work out lease buy-back contracts, since most recent vehicles were purchased rather than leased due to the lack of maturity in the leasing market."

Developing a global fleet policy presents a short-term challenge for LaRosa. The policy contains universal procedures and must be signed off by his executive leadership team. "In benchmarking policies with some of the top global companies, Merck would be one of the first companies to have a truly global fleet policy in place," he noted.

Headquartered in Kentucky, 139-year old Brown-Forman produces high-quality alcohol beverage products distributed in 135 countries throughout the world.

Katie Rixman is senior fleet specialist for Brown-Forman. She noted three top challenges in managing a global fleet:

  • Offering a competitive program worldwide to attract and keep top talent, while implementing a country-specific program based on local cultural standards and practices.
  • Dealing with currency fluctuations.
  • Benchmarking locally and analyzing total cost of operation globally.

A fleet management consultant who helps manage global fleets, particularly in the construction industry, Paul Bisbee, CCP, has encountered difficulties in arranging vehicle leases.

One challenge is "finding a capable leasing supplier...that can handle the 'service' side of any proposal. The financing side easily transcends most borders," said Bisbee.

He also finds determining whether to use a fixed or variable lease rate - or a mixture of both - a compelling task.

Still another challenge in global fleet management includes assembling a fleet of comparable vehicles across countries, while selecting models that promote a company's image and needs, said Bisbee.
One final obstacle in managing an international fleet, Bisbee mentioned, is securing compliance to company policies and operating standards in each country.

In managing a global fleet, "one of the greatest challenges is meeting the demands of our internal customers," said Christy Coyte, global fleet manager at Johnson Controls, Inc., a Plymouth, Mich.-based provider of systems and products for the automotive, building, and battery technology markets.

Hampering her job this year is increasing pressure with reduced staff resources, said Coyte.

"We need to influence change and do so quickly for effective cost management and cost reduction opportunities. Johnson Controls' business is diverse and maintaining harmony among the business units and the countries in a very complex and fragmented market poses challenges in policy and procedures, fleet reporting, and data collection and consolidation," she explained.

According to Joe Fiorelli, director of national and international fleet operations at Cardno TBE Group, Inc., exploring the function of handling a fleet not bound by U.S. borders "could scare some, while others engage in the challenge of difficulties," he said.

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