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The Car and Truck Fleet and Leasing Management Magazine

2015 Fleet Industry Report Card: FMCs

May 2015, by Mike Antich - Also by this author

Photo courtesy of iStockPhoto.com.
Photo courtesy of iStockPhoto.com.

This annual survey, now in its third year, is designed to provide an industry “report card” of the services and products offered in the commercial fleet management market by automakers and fleet management companies (FMCs).

Fleet managers are mostly satisfied with the products and services available to them; this sentiment was validated once again with the 2015 survey. The survey is segmented into two parts. Part one examines how fleet managers view their OEM suppliers. Part two rates how FMCs are serving their fleet customers.

Overall, fleet managers rated their fleet management companies (FMCs) highly. Specific areas of high praise included:

  • Ease of ordering/acquisition process.
  • Motor Vehicle Record (MVR) checks and fleet safety services.
  • Overall customer service and ability to resolve problems.

In the spirit of continuous improvement, fleet managers offered their suggestions for further improvement to fleet company services.

At A Glance

Fleet managers gave the following feedback about FMCs:

  • Improve follow-up.
  • Better assistance to small and medium fleets.
  • Better integration of data.
  • Service slipping due to use of third-party vendors.
  • Better self-service tools.

While some companies only use fleet management companies to fund their vehicle acquisitions, others also use a variety of fleet management services. We asked commercial fleet managers the following question: “What is the one area that fleet management companies need to improve, and what they should do to bring about this improvement?”

Here’s what they told us:

Focus on Client Satisfaction by Providing Solutions

“The FMCs need to focus on client satisfaction, not how many phone calls they can answer in a day. Concentrate on solving the issue at hand; get back to drivers with resolutions in a timely manner. FMCs should evaluate their call center associates only on performance, such as, ‘Did you resolve the driver’s concern?’ ‘If not, did you follow up within set expectations?’ ‘Did you inform the driver to contact his or her company’s fleet manager?’ (A big no-no!) FMC account executives should ‘provide solutions’ rather than asking the fleet manager what to do. Take ownership when an issue arises; work directly with other vendors, so the fleet manager doesn’t have to be in the middle.”

Become More Consultative

“With professional fleet managers being slowly supplanted by procurement managers and part-time administrators, companies are going to require a more consultative relationship with the FMCs since this is where the industry expertise really lies. Additionally, though I know it’s not a popular approach, I feel the larger FMCs need to leverage their buying power to improve on current national account prices, which basically incorporates the smaller and larger FMCs at the same pricing level. I would love to see a maverick FMC buck the current national account system by negotiating a ‘better’ deal on behalf of their clients based on their individual leverage. I know this has been discussed at times, but to date there has been no real movement in that direction.”

Some FMCs Have Become Complacent

“Continue to grow in understanding the needs of clients. Sometimes, an FMC can become complacent and only see things the way the FMC does things. FMCs must put on the shoes of their clients to better understand how they walk the walk.”

Want to Offer Everything to Everyone

“Some vendors try to offer services, such as toll management, accident services, or employee purchase programs, and cannot service them properly. Ultimately, we, as fleet managers, get the complaints from the end users. Many times, the services FMCs want to sell are ancillary and not their core business. Collaborating with vendors that are first-in-class with what they do would be prudent and could ensure the knowledge and expertise of the service. FMCs suffer from trying to do too much at once and cannot offer state-of-the-art technology solutions. It requires substantial dollars to fund and build an infrastructure that can perform to a customer’s expectation. They often fall short with certain services.”

FMC Provides Good Service, but Not Excellent Service

“Service is a huge issue. I am using a fleet management company for certain services, so that I do not have to hire more headcount. I have found that many of the FMCs have lost the concept of service and what that means. I think almost a ‘back-to-basics’ training for all of their employees about what being in a service industry means and how to actually provide not good service, but excellent service, would be a really good thing.”

Improve Follow-up

“There is a lack of follow-up on existing issues with responses clients are waiting for. Perhaps, they can put it in their calendar to remind them, if they are waiting for an answer from someone else within the company.

“FMCs need to be able to triage better for emergency issues and give those priorities in responding to requests, instead of focusing so much on processing queues and turnaround times. This includes expired registrations, expired temp tags, missing plates, and other things that could lead to a driver being ticketed or a vehicle impounded. Website processing times could always be improved, with less occurrences of the websites being down.”

Share Best Practices Among Their Portfolio of Clients

“One area FMCs can improve is in being proactive in reviewing customer accounts, their spend, processes and procedures, etc., and taking that information to organize best practices based on what they see from their entire customer base and making recommendations to clients. FMCs are in a unique position to see how many different fleets operate and what seems to be working and what is not. FMCs could build an internal group to do nothing but review different fleet components (registrations, maintenance, fuel, purchasing, etc.), evaluate what seems to be working best in different industries, and pass that information along to their other customers. This is not suggesting any pricing or confidential information sharing, but, for example, a sharing of a process in how a customer reviews their bill for anomalies, or identifying data issues with maintenance records, etc. There are a lot of very smart fleet managers out there, and they all have a unique perspective on the fleet world. It would be great to have a way to gather those ideas and make them available to other fleets. This would take a minimal headcount investment by the FMCs, but could have unlimited potential for client savings.”

Become More Proactive in Driving Improvement

“Understanding the nature of the client’s business and its challenges is important. FMCs need to have more face time with decision makers and end-users, so they can be more proactive in driving improvements as opposed to being merely reactive and waiting until they are asked to do something.”

Better Assistance to Small and Medium Fleets

“FMCs need to do a better job leveraging their expertise and knowledge to help small and medium fleets recognize opportunities for savings and improvement, and show them the path to that improvement. Many small fleets have inexperienced managers who often have another job focus. Any FMC who can help them, and teach them how to optimize their fleets, will win themselves loyalty by adding real value to the relationship.”

Avoid Attempting to Standardize Fleet Services

“FMCs are beginning to ‘standardize’ fleets again. They want one-shoe-fits-all. They cannot lump all fleets into the same bucket just due to size, industry, or type of vehicle used. All fleets are run differently and need to retain their identity. FMCs need to quit making systems that cater to the majority of their clients and then trying to force all their clients to use those systems. I understand that systems need to have a beginning point, but they must be created in such a manner that they can easily be tailored to the needs of all their customers.”

Provide Better Integration of the Services Offered

“FMCs need better integration of a full spectrum of services, many of which are offered by third-party suppliers. For example, telematics, fixed/variable reimbursement programs, toll management, and safety programs that actually reduce crashes per million miles, etc.
“An area of improvement would be better collaboration with the telematics providers, offering more than one solution since not one provider is good across the country.”

Better Self-Service Tools

“Many FMCs have disparate systems for financial, maintenance, replacement, and remarketing data; therefore, requiring customers to request and wait for reports. I know there has been some movement with this effort, but more focus and progress is necessary for fleet managers to be more efficient.”

Move Away from Cookie-Cutter Maintenance Programs

“Today’s maintenance programs are cookie-cutter programs designed for leased, light-duty automobile fleets, which are turned over on a consistent interval. The industry could do a much better job managing the more difficult, specialized, and high-mileage/owned vehicles. There is a real need for a comprehensive maintenance management service, capable of making the difficult decisions, which are in the best interest of the asset owner. Call takers/decision makers must have an intimate knowledge of the client’s organization, in addition to advanced fleet management skills, to be successful.”

Better Integration of Data

“There needs to be better integration of data across an FMC’s strategic suppliers to the FMC’s platform. FMCs need to accelerate improvements to their product offerings, not only by focusing on adding services, but also by understanding the information captured by each of their providers and the way in which it interrelates. They should then create an IT architecture that allows for the blending of multiple inputs and results in more insightful and accurate reporting.”

FMCs Need to Better Integrate into the Client’s Operation

“In my opinion, FMCs exist to provide solutions to customers. Those solutions can range from adding expertise to organizations to a simple outsourcing decision to reduce payroll costs. Organizations may not have the deep knowledge of fleet practices and seek outside assistance. However, more frequently, it is to provide external staffing solutions at lower net expense, or, to free up employees to focus on their business rather than on other disciplines. I feel that the latter reasons are the more likely. With this, FMCs need to do a better job integrating themselves with the companies they serve/partner with. The FMC needs to function as an approved ‘arm’ of the company, and understand the customer’s business and needs. In conjunction, companies/customers themselves need to do a better job of communicating the decision to use an FMC to their drivers and decision makers. This provides credibility and authority to the FMC within the organization and aids in the achievement of goals that the company has set. To me, the onus for this rests more on the organization that hires the FMC, as companies rarely do a good job of communicating and backing the decision to outsource.

“The FMC needs to educate and assist the company’s leadership to the value of the outsourcing decision, constantly provide achievement measurements, and enhance the working relationship with drivers and their managers. Not an easy task, but, when done properly, it helps the partnership rather than appearing as just another company move to reduce expenses.”

Better Cost Management Advice

“I am always disappointed that FMCs don’t recommend any real cost-saving solutions that don’t involve signing up for more services. I work hard, but I know that there are actions that could be better managed resulting in a better managed fleet.

“I would greatly appreciate having simple access to all my data in as detailed a level as I would like. There are so many analytic models provided that claim to provide everything, except the simple information I’m looking for! The emphasis is on comparative data, not on real practical steps that should be taken to bring about the improvements I’m looking for. Don’t tell me I’m better (or worse) than last year or than other fleets. Help me see where the dollar drains are and give me practical steps to plug them!”

Better Analytics Tools and Technology

“We need better analytic tools; current and predictive reporting and forecasting; robust reporting and score carding that customers can access as required, as opposed to requesting consultants and ad hoc reporting. The improvements will be all about the timely collection of data and the accessibility to the data, ensuring integrity and accuracy.

“Technology is No. 1. When you look at how awesome and simple some websites are, the leasing companies are not keeping up. The same is true with mobile apps. GPS and telematics is another area lagging behind. Companies are great at logistics-based telematics, but not so good when it comes to behavior telematics.”

Develop Better Data Delivery Tools

“FMCs need to improve on data delivery, specifically in terms of ‘visual analytics.’ They have improved greatly in providing access to data around our fleet, but are really working perhaps five to eight years behind the times in creating dashboards. In truth, dashboards are a very basic form of visual analytics, but they leave very much to be desired. What’s needed are higher power (visual) tools that let fleet managers compare performance (benchmark) relevant measures against their historical performance, against like companies and against best-in-class in free-flowing, high-speed, and live-time visual tools to take advantage of the big data available.”

Improve Vehicle Ordering Systems Used by Drivers

“I am absolutely certain that the vast majority of my drivers can get on a computer, search for and find a retail good they need, complete the transaction, and easily follow the delivery of the retail good. I am constantly amazed that these same, well-schooled consumers fail to be able to order a vehicle on our FMC’s Web pages. The FMCs need to model their car ordering processes’ on best-in-class retail sites. This is another place where FMCs are well behind the times, but seem pretty certain they are doing fine.”

More Online Training

“Provide more online training for fleet managers to access at any time. The fleet management company that I use has great tools; I just do not always know how to use them to their best capabilities.”

Quality of Work Needs to Improve

“Attention to detail. Many fleet managers have outsourced multiple functions to FMCs, but keeping the level of quality up is the key to success. Checking outputs (reports, work orders, and billing) internally before it is sent to the client needs to improve.”

Improve Vehicle Delivery Process

“I see two areas of improvement for the FMCs: First, it is the back-to-basics issue. They need tighter control and visibility to the delivery process and quicker responses for picking up and selling cars.

“Second, supply chain is one of the most neglected areas. We need every vehicle to be followed and have information on from order to delivery. Leasing companies should demand and get accurate information from OEMs and upfitters for both factory orders, as well as out-of-stock purchases. This information must find its way to end-users. This will allow the end-user better planning and understanding of OTD cycle.”

The Left Hand Doesn’t Know What the Right Hand is Doing

“Overall communication is key, since there are so many constant changes that the left hand usually does not know what the right hand is doing. I feel like we work with so many departments within the leasing companies that we do not get a clear message and direction.”

Service Slipping Due to Use of Third-Party Vendors

“I have really noticed an increase in the use of third-party vendors. The fleet management companies are using third-party vendors more and more to handle such things as toll violations, registrations, new-vehicle titling, etc. The service seems to be slipping due to this practice, and there seem to be more administration fees piling up so they can recoup the cost of using the vendor. When an issue or problem arises it takes more time to rectify due to the third-party involvement. I would prefer to see these items handled in-house. I understand the need to grow and using a third-party vendor can stretch your resources, but having that in-house knowledge and involvement goes a long way in providing the service after the sale.”

License and Title is a Persistent Failure Point

“License and title services continue to be a persistent failure point. This is a tough job for FMCs as hundreds of government agencies are involved and drivers are often required to take action to complete the processes. Still, we see the same issues year after year with no good FMC plan to improve.”

Expand National Account Programs

“Some shops won’t work with the lease companies’ managed maintenance programs because of slow payment or not wanting to honor the discounts. Make it easier for the driver to go to whatever shop he or she chooses; have the shop call the lease company for approval of the work to be done, and give the shop a credit card number by phone to process the payment when the work is completed. Require shops to send electronic work orders so that the lease company has record of the work performed, odometer reading, and cost.

“Another area is shop fees. I consistently see a markup in service work due to the fact that the leasing company charged a percentage of the repair back to the vendor.”

Need to Expand Mobility Solutions

“Approximately 15 percent of our fleet is located in major cities. As such, I would like to see an aggregated mobility solution that enables our fleet drivers to replace their car with a range of safe and reliable solutions that improve mobility effectiveness and efficiency. In short, we are looking for an aggregator of public and private options that enable our drivers a customized best solution for him or her. I think FMCs could fill what I see as a commercial void of effectively using a fleet business model of managing driver service and associated pass-through cost for mobility.”

Better Truck Expertise

“The FMCs do a great job working with ‘easy’ fleets that only operate sedans, SUVs, and pickup trucks. They are even improving in working with light-duty (pickups and cargo vans) service fleets. However, the missed opportunity are mixed fleets with both light-duty and medium-duty vehicles.

“The FMCs struggle mightily with the basics, such as displaying medium-duty truck data (i.e., model names, upfitting types, or equipment options), and their ability to take medium-duty orders via an automated process (through their websites) is very rudimentary and limited. They have struggled with building strong relationships with medium- and heavy-duty dealers, and the OEMs have all but rejected their advances to partner in really any meaningful way."

“The FMCs are all chasing to try to build and partner with the right safety or telematics provider; however, these are add-ons to their existing clients versus breaking new ground into an untapped market."

“The first FMC to invest resources and technology into servicing medium-duty and heavy-duty fleets will take a tremendous amount of business from the Ryders and Penskes, who have no competition, high prices, poor service, and an inferior product to what FMCs can and should provide.”

Need to Improve FMC and OEM Communication

“FMCs do not always inform their customers when specific vehicles have open recalls on them. The OEMs send the info to an FMC and have for several years, but the FMCs haven’t done anything with the info. It took me several years to get an FMC to admit they even received the info from the OEMs and then stated that, because the info came to them in up to five separate files, the FMC didn’t bother doing anything to get IT to pull the info together. This is a bad situation for the fleet manager when it’s all over the news about recalls and your senior executives are asking you for detailed info about how many company cars are affected, and we have no info for them since the FMC can’t tell me. It has taken me repeatedly getting seriously angry and demanding my FMC provide me that info on each of my vehicles. It’s now something that is listed on the maintenance screen of each vehicle.

“If the FMC has access to info that directly affects the drivers, especially in cases that affect their safety, there should be no reason why every effort isn’t made to provide the info to the fleet managers.”

Lack of Innovation

“Believe it or not, the biggest area of improvement I see for FMCs is in the area of innovation. The FMCs have been good at bringing new technology to the market, such as telematics, and new ways to massage and analyze data. But, that is not innovation, it is simply developing ways to deliver products and services developed by others. The core programs FMCs deliver (maintenance and accident management, fuel card programs, and administrative services, etc.) remain largely the same today as they were decades ago. With new-vehicle and powertrain warranties far exceeding those in effect when maintenance management, for example, was first introduced, the existing template for this service needs to be updated. Per-vehicle, per-month fees for a car or truck with a five-year, 50,000-mile warranty, or a 10-year/100,000-mile powertrain warranty, are wasted, charged for automatic approval of preventive maintenance for the most part. Fleets need to recognize that the fee structures for core services are in many cases out of step with the vehicle landscape, and pressure FMCs for change. It won’t happen unless the market demands it."

Read part one of the fleet industry report card focusing on OEMs.

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