Fleet Management Spans the Globe

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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Challenges Provide Satisfaction

Meeting the challenges presented by managing a global operation also provides a sense of fulfillment for many fleet managers.

The challenges "are typically the most satisfying when we can solve the issue or create a solution that is a long-term strategy for the company," said Pratt. "In fleet, we have a big impact on the bottom line for the company. Although we are behind the scenes, we can really influence the spend worldwide by putting more fuel-efficient vehicles on the selectors, meeting with senior management to get buy-in on strategic initiatives, and actually reducing fleet costs for the divisions and the company. This brings value to our shareholders."

The most satisfying element of his job managing a global fleet, said Fiorielli, is "watching a plan come together with multiple people in different countries, time zones, and cultures to meet a universal goal. One aspect I learned is you have to be a good listener."

Coyte finds it "very rewarding and satisfying when we're able to influence change and create awareness of opportunities." To successfully implement a program, policy, or process "where it was said 'we can't do that' is very satisfying," she noted.

In addition, "creating synergies and leveraging our company's spend to effectively manage our costs is particularly satisfying and, of course, is expected in managing a fleet this size," said Coyte.

Nancy Barlage, fleet administrator at Regis, an international beauty industry company headquartered in Minneapolis, appreciates the opportunities her job presents.

"Regis Corporation has less than 100 vehicles outside of North America, but they keep me on my toes. The UK has a whole different set of rules for their specs, vehicle eligibility, procurement methods, along with a different dictionary!"

Implementing a common language of fleet management across the globe has been "most satisfying" for LaRosa.

He noted the "total cost of ownership (TCO) management model that is now universally being accepted at Merck. Everyone is cooperating with a sense of urgency to monitor their TCO on a vehicle-by-vehicle basis and how it all comes together in cost-saving ideas."

Additionally, said LaRosa, he has enjoyed "bringing together the different stakeholders, i.e., global procurement, global facilities management, human resources, global safety, sales, and finance in a forum that has a common ground to reduce overall fleet costs without having to reduce service levels for drivers."

Bisbee also appreciates the ability "to bring to the table many sides of the expertise needed to run a successful global fleet and the full extent of the leveraging financial possibilities."

What Lies Ahead?

Pratt sees a future "with OEMs producing more vehicles across several continents and the options for small diesel cars in several regions of the world. It is likely it will be easier to implement global fleet programs that focus on a sustainability program and green fleet initiative."

Coyte agrees that greening fleets will go global. "I think we'll see a big shift to alt-fuel/hybrid/plug-in vehicles in fleets. As fuel cost, CO₂ reduction, and social responsibility continue to be the driving factor, the shift will also come from a wider variety of products, availability, and new technology."
Brown-Forman's Rixman predicts "better benchmarking and improved standardized reporting."

LaRosa concludes the future of global fleet management is "very bright, and it will become more demanding as an important strategic management role within multinational companies."