As Automotive Fleet celebrates its 60th anniversary, we look back on the major milestones that have influenced fleet management. This fifth edition of the Top Fleet milestones covers events that occurred between 1990 to 1999.
Below is a sampling of more than 60 key milestones that helped shape the fleet industry in its more than 80 years of existence.
Clean Air Act Amendments of 1990: The Clean Air Act Amendments of 1990 mandated that all commercial and government fleets that were centrally fueled and maintained with 10 or more vehicles located in EPA-designated non-attainment areas would be required to purchase a specified percentage of clean-fuel vehicles in MY-1998. This was the first-ever legislative mandate dictating the types of vehicles a fleet should acquire.
Emergence of Fleet Safety Programs: The concern about driver safety has expanded greatly, from the installation of seat belts in fleet vehicles in the 1960s to air bags in the 1980s to current policies on distracted driving. In 1991, GM launched a series of first-ever fleet safety symposia to increase fleet manager awareness.
As mobile technology usage by fleet drivers increased, companies began implementing fleet safety requirements to prevent distracted driving. This included distractions from cell phones, laptops, GPS systems, and other mobile office instruments.
Fleets began placing a larger concern on safety requirements, and actions have included updating safety policies; developing online, classroom, simulator, and behind-the-wheel training for safe driving practices; reviewing motor vehicle records (MVR); and identifying at-risk drivers.
Energy Policy Act 1992: President George H. Bush signed into law the Energy Policy Act, which was designed to reduce the nation’s dependence on foreign oil. Among its many provisions, the Act imposed alternative-fuel vehicle purchase mandates on federal, state, and alternative-fuel provider fleets.
Starting in the 1996 model-year, 10% of all new vehicle purchases by all covered fleets were required to include vehicles powered by non-petroleum-based fuels. This alternative-fuel purchase mandate increased to 75% of all new vehicles purchased annually by the 2000 model-year. The legislation did not require private and municipal fleets to purchase alternative-fueled vehicles.
Strategic Sourcing’s Influence on Fleet Management: The emergence of strategic sourcing in the 1990s rapidly changed corporate purchasing and increasingly forced change in fleet purchasing and the supplier selection process.
Strategic sourcing initiatives re-examined the way a corporation conducted its business and identified opportunities to consolidate purchasing volume to obtain reduced pricing from key supplier partners. The migration of large corporations to strategic sourcing became a powerful change agent at large fleets. Increasingly, especially at large corporations, fleet managers began reporting to sourcing and procurement groups.
Creation of IRS FAVR Reimbursement Regulation: Companies that converted from a company-provided vehicle program to driver reimbursement often opted for the fixed and variable reimbursement (FAVR) program. First established in 1992 by the IRS, a FAVR plan reimburses employees on a non-taxable basis through a combination of a monthly allowance and a per-mile reimbursement.
In IRS Revenue Procedure 2004-64, the FAVR fixed payment includes projected fixed costs, such as depreciation (or lease payments), insurance, registration, license fees, and personal property taxes. A FAVR plan also covers projected operating (or variable) costs, such as gasoline, fuel taxes, oil, tires, and routine maintenance and repair.
First Global Fleet Deal: A handful of large multinational companies began negotiating major global fleet acquisition agreements in the early 1990s. Also, pan-European fleet buys became more prevalent during this time frame.
Corporations such as Pfizer, Bristol-Myers Squibb, Honeywell, Johnson Controls, Xerox, Exxon, Federal Express, Phillip Morris, Coca-Cola, along with others, expressed interest in global fleet management in the early ’90s to present. Much of the interest in pan-European fleet deals occurred as a result of the creation of the European Union.
Computerization as a Fleet Management Tool: The fleet industry could not provide its breadth of services without computers. Wheels and PHH installed their first IBM mainframe computers in 1959. In the 1990s, fleet shifted to Web-enabled services. Computers gave lessors the capability to evolve into full-service fleet management companies.
Sedans Diminish in Fleets while SUVs and Crossovers Proliferate: The sedan was synonymous with fleets since the inception of the industry. However, with the introduction of compact SUVs and later crossovers, more drivers, if given a choice selected them instead of a sedan. Also, crossovers and SUVs generally had higher residual values causing them to have a better total cost of ownership than sedans.
Ford ended its sedan production in the U.S. when it phased out the Fusion in July 2020. Other OEMs, likewise, started to reduce the number of sedans offered in their vehicle portfolios.
Web-Enabled Fleet Management: Fleet management companies began offering computerized online services in the ’80s, including online maintenance management programs and customer online access systems.
In the 1990s, fleet management companies dramatically and quickly shifted to Web-enabled services. Ultimately, every service offered by fleet management companies was converted to Web-enabled programs. In addition, Web-enabled programs allow greater interaction between drivers and fleet management companies in terms of new-vehicle ordering, preventive maintenance, used-vehicle employee sales, etc.
On-board diagnostics (OBD) Standard: This is a vehicle’s self-diagnostic and reporting capability. OBD systems give the vehicle owner or repair technician access to the status of the various vehicle sub-systems. Modern OBD implementations use a standardized digital communications port to provide real-time data in addition to a standardized series of diagnostic trouble codes, or DTCs, which allow a person to rapidly identify and remedy malfunctions within the vehicle.
The Global Fleet Manager Position is Created: The first person to have global fleet responsibility was Theresa Ragozine, who in 1997 was named worldwide commodity manager for fleet at Johnson & Johnson, which at the time had a global fleet of 33,000 vehicles.
Also, in 1997, Beatrice Coolican was promoted to global fleet manager for AlliedSignal, which operated a fleet of 2,200 vehicles, of which, 1,600 were based in North America and 500 in Europe. Another pre-2000 pioneering manager with global fleet management responsibilities was Joe LaRosa, who in 1999 was named associate director global fleet for Bristol-Myers Squibb, managing a global fleet of approximately 14,000 vehicles with a global spend of approximately $200 million.
Green Fleet and Sustainability Initiatives: Following the signing of the Kyoto Protocol in 1997, a number of multinational corporations, especially those headquartered in the European Union and Japan, began corporate-wide sustainability programs, which invariably included corporate fleet. In July 2007, healthcare provider Abbott announced it would become the first Fortune 500 company to go “carbon neutral” with its entire U.S. fleet of company sales vehicles. Abbott’s fleet represented close to 11% of the company’s total emissions.
The announcement was emblematic of a much larger change emerging in fleet management — the proliferation of corporate green initiatives within multinational corporations and their influence on vehicle selector decisions. Green fleet initiatives include a variety of strategies ranging from right-sizing vehicles, adding hybrids to the selector, utilizing flex-fuel vehicles, downsizing engine specifications, altering employee driving habits, and acquiring greenhouse gas offsets or credits.