Automotive Fleet views itself as a facilitator to provide a platform for different voices from the industry to sound-off on today’s challenges. This regular column is designed to encourage discourse for fleet professionals to let their voices be heard to their peers and other industry professionals.
Here is what is top of mind for fleet professionals today:
No Two Fleets are Alike
I sometimes view the fleet family as a whole like looking at a large forest from a distance. Tall, majestic trees standing together. It isn’t until you get closer to the forest that you realize no two trees are exactly alike. Some are bigger than the others. Some may not be as vibrant or healthy as others, but they are still standing and with a little care they can become as healthy as the next. Knowing my fleet is not identical to any other fleet, but also realizing that the view from a little different perspective shows almost no discernible differences, I would like to share a struggle that others may relate to. Our fiscal year starts on January 1st, but my Budget for the new year needs to be handed in during October.
I not only manage our fleet, but I also manage all of Purchasing. I can polish up the old crystal ball for the anticipated spend on forms, supplies, furniture, etc. But I need to strain hard to see a clear picture for fleet that goes 15 months into the future. Like many other items on a budget, I need to use past “knowns” and attempt to come up with a reasonable projection. This becomes difficult when some years the fleet order cut-off date(s) extend to May or June, and then you find out this year it will be mid-February.
This year in particular it was a challenge to determine when my drivers would cycle out with mileage due to many travel restrictions. Add to that the early order cut-off date(s), and I expect to have some explaining to do about why the budget doesn’t match the real numbers. At the end of the year, I hope the numbers all come together, but it is the frustrating monthly/quarterly results that may not jive mid-year that put strain on my remaining hair follicles.
Tom Krause, Purchasing/Fleet Manager | Financial Services, West Bend Mutual Insurance Co., West Bend, Wis.
Managing Chaos Isn’t Easy
One of the key challenges today is keeping up without burning out. More than most years, there are ever-changing impacts to the fleet supply chain – OEMs, FMCs, driver-risk management providers, safety services, upfitters, branding providers, equipment providers, telematics providers, etc. The list has become nearly endless with traditional fleet intersecting and clashing with traditional and now new mobility. Add to this, the organizational expectations of a fleet leader to navigate, manage, and control the impacts of the changing external landscape on the internal organization. Managing success in the chaos isn’t easy – but it’s rewarding.
Author Wished to be Anonymous
WIFM’s 10-year Anniversary
On the 10th year anniversary on the founding of the Women in Fleet Management (WIFM) organization, I want to thank Automotive Fleet, AFLA, and NAFA for their continued support and recognition of the group. Ten years certainly went by quickly, and the contributions of WIFM in our personal and professional lives have been significant. I personally cherish the lifelong friendships made along the way to celebrate the good times and also lift each other when needed. Congratulations to all!
Sue Miller, Senior Fleet Account Manager,Geotab USA, Las Vegas, Nev.
(Automotive Fleet Reply) As director of fleet management services at McDonald’s, Sue Miller was one of the five founding members of WIFM.-- Editor
Sales Fleet is Eliminated
Listening to State of the Fleet Industry video report that discussed renewed discussions about driver reimbursement as an alternative to a company-provided car, I want to let you know that today, my company eliminated company cars for sales and sales support. This represents under 10% of the fleet.
The decision to eliminate sales vehicles wasn’t so much related to the pandemic, but rather that senior management doesn’t believe sales needs vehicles and the fact that some of our competitors do not provide cars. I think there is also a movement of better planning by sales and obviously, we know Zoom meetings work. We are going to mileage reimbursement (IRS rate) and if the driver believes they will exceed our cap of 15,000 business miles reimbursed per year, they have to get a waiver. However, based on past mileage reported in company cars, at least 30% don’t qualify even though they claimed they would or will drive more than 12,000 business miles.
In the end, expensing mileage is just another way for managers to audit if sales is doing their job (whereas mileage wasn’t visible to management using a company car). If nothing else, this policy change saves me from arguing with sales managers/sales because they want a different car or why can’t their spouse drive, or “what do you mean I don’t qualify?” — you know the drill.
Author Wished to be Anonymous
Flat-Rate Vs. Hourly Rate
Shops have overcharged the consumer and underphe tech for years and now its coming back to bite them in the behind.
I see dealer labor rates at $155.00 an hour, but the tech is only making $20 an hour. If the tech doesn't turn so many jobs a week he is not long before they fire him or her.
Art Meyer, Fleet Manager, VoidForm Products, Inc., Dallas, Texas
Single Task vs. Multi-Task
Thank you for your work over the years and the greatly needed information. I think you could help the designers/planners of urban cargo throughput by starting a discussion on “single-task” versus “multi-task” pickup and delivery vans for urban and high-density urban logistics.
The stepvans (including EVs), come with very high opportunity costs including cargo handling and minimize any chance at a holistic strategy. By holistic I refer to upstream unitization, massive loading bottlenecks, lack of very fast transfer systems for on-road vehicle transfers, (e.g., “feeders”) transit facilities, and endless B2B traffic. The outbound volumes, too often, lose sight of line-balancing opportunities, which, in some cases, can include recycle as well.
Sent via E-mail by Joseph Farley
Keep Your Seat Belt Buckled
Certainly, have to keep our "seat belts buckled" in these turbulent times. Many things coming at us as our orb circles the sun. Fleet and its associated supply chain are critical business resources that connect many B2B and B2C enterprises. Certainly, any fleet challenge/opportunity has to be considered in the context of the business it serves.
I say this in advance as my comments on challenges and opportunities may be applicable for one business or completely miss the mark for another. For example, while fleet drains both capital and expense budgets, Fleets can be external customer-facing for one business or a key internal company process for another. So here are my top three in no particular order of the fleet challenges and opportunities in 2021.
- Insourcing vs. Outsourcing: The pandemic has enabled working remote and accelerated the exodus of office workers. The impact on fleet is the ability of companies to preserve capital by eliminating the corporate fleet asset. and expense of maintaining a fleet department for purchase, resale, maintenance, insurance, etc. More businesses will undertake the risk, reward economic analysis with the intent of outsourcing all or some portion of their fleet departments and the fleet asset.
- Electrification: Political and public pressure will continue to drive fleet analysis for purchase and use of non-fossil fuel vehicles. Depending on business requirements and advances in electric vehicle infrastructure fleets will accelerate electrification conversion timelines.
- Safety - Safety – Safety: In-creased insurance expenses along with risk exposure promulgated by adverse events - accidents, impaired drivers, inadequate driver training, use and accessibility of vehicle tracking and operator reporting data - will force fleets to respond accordingly. Fleets will need to protect their company reputation and ensure customer/public good-will by reducing over the road fatalities and accident statistics.
Charlie Schott, Managing Director, Schott and Associates, New Canaan, Conn.
Bonus Incentive to Beat SRT
I couldn’t agree more with the great blog written by Mike Antich highlighting technician shortage across the industry as it relates to technician pay. (See blog “Unpopular Flat-Rate Compensation Contributes to Shortage of Repair Techs.”)
My techs were paid hourly with quarterly productivity bonuses to incentivize beating the SRTs (standard repair times).
Don't get me started on the tool trucks. Every training program needs to educate on finance and the dangers on debt-traps. I have seen too many techs buy tools and boxes on credit in order to keep up with their peers.
Matthew Leffler, Vice President of Trailer Solutions, vHub