Productivity.

Controlling costs.

Alternative-fuel mandates.

Safety.

Those are the issues that are uppermost in the minds of today's fleet manager.

At least that's what Automotive Fleet reporters found out when asking fleet managers, "What are the top issues facing you today?" The question was asked of fleet managers at the National Association of Fleet Administrators' Fleet Management Institute (FMI) event that took place May 3-6, 1998 in Seattle.

"The key issue is how to cut costs overall and negotiate with manufacturers. Prices of vehicles have increased the past few years, and we have to find ways to cut costs," said Rita Stokes, manager, corporate fleet services, for Fort James Corp., Olympia, WA.

Other attending fleet managers were quick to agree with Stokes. "We need to reduce expenses and still have our drivers be more productive," said Bob Brown, manager, vehicle fleet operations, for Xerox Corp., in Rochester, NY. "We also need to buy and sell right and manage maintenance expenses."

Those concerns and many others were addressed at the NAFA conference in Seattle, which featured a record number of educational sessions, said NAFA Executive Director Dave Lefever.

Lefever said more than 2,300 people registered for the conference, which was close to a record. The Fleet Institute Exposition featured exhibits from 139 companies, which was a record, and had the most new model vehicles ever on display, about 30. A record was also set for the most auto manufacturers with displays.

"In terms of educational content and attitude of the group and level of satisfaction, it might be our most successful conference ever, which is great, since exceeding expectations was our theme," Lefever said.

Seminars Focus on Fleet Productivity

In keeping with the conference theme, "Productivity: Exceeding the Challenge," Automotive Fleet Executive Editor Mike Antich gave a presentation titled, "Productivity Tips: Learning from the Pros." Antich highlighted 12 case studies of companies that have increased fleet department and driver productivity.

Examples of companies and policies Antich highlighted that increased productivity were Picker International, which extended its oil change intervals; Simplex Time Recorder, which adopted a single fleet telephone number; AMP Incorporated, which put its fleet policy manual on its Intranet website; and Hallmark Cards, which reduced its vehicle selector to a single driver level with a choice of two models.

Other fleet managers attending the FMI conference agreed that cost savings and driver productivity were key issues in their specific fleet operations.

"The key is getting communication down to drivers, such as programs and national accounts, what drivers can do to save money," said Cathy Crewson, fleet manager, ADT, Boca Raton, FL.

Tina Kourakos, assistant director, fleet and contract services, CIGNA Corp., Philadelphia, said cost control was the top fleet management issue at her company and the industry in general.

"I'm even seeing pharmaceutical companies going to the Chevy Malibu," Kourakos said. "Also, manufacturers' packaging of options. Sometimes to get some options, you almost have to go up to another class of vehicle."

State-operated fleets are likewise feeling pressure to control costs. "The legislature doesn't want to fund vehicle purchases. However, trying to limit what we buy doesn't save taxpayers' money. Renting or leasing outside of the state fleet costs more money," said Dennis Johnk, administrator, Transportation Services Bureau, State of Nebraska, Lincoln, NE. "The foremost issue is staying within budget restraints by purchasing essentially needed units instead of the desired ones. It's important to use what we currently have efficiently," said Jim Faircloth, assistant fleet manager, Department of Natural Resources, State of Washington.

Fleet Managers Forced to Consider Fuel Alternatives

The Clean Fuel Fleet Program was one of several topics covered in one of the more popular sessions at the FMI, the U.S. Legislative and Regulatory Update presented by Pat O'Connor, NAFA's legislative counsel.

In his presentation, O'Connor covered a variety of legislative issues affecting fleet operations. The most pressing is the Clean Fuel Fleet Program which becomes effective Sept. 1, 1998 for six designated metropolitan areas: Atlanta, Baton Rouge, Chicago-Gary, Denver-Boulder, Milwaukee-Racine, and Washington, DC.

Covered fleets (those that are centrally-fueled or capable of being centrally fueled) are required to have 30 percent of their 1999-model year light-duty vehicle purchases be clean-fueled vehicles. In addition, 50 percent of the 1999-model medium-duty vehicles they purchase under 26,001 lbs. GVW must be clean-fuel vehicles.

Another significant recent development was the National Low Emission Vehicle Program (NLEV).

Although NLEV is not a fleet-specific program, it does cover all light-duty vehicles less than 6,000 lbs. GVW. To date, 23 automakers have agreed to comply with the NLEV standards, starting in the Northeast states in model-year 1999 and nationally in model-year 2001. According to NLEV requirements, all new cars and light trucks will meet tailpipe standards that are more stringent than current EPA requirements. "This is a voluntary program; however, with almost all the manufacturers voluntarily accepting it, it has in essence become mandatory," said O'Connor.

However, two Northeast states - New York and Massaschusetts - have rejected NLEV and decided instead to employ the California emission standards, which mandate zero-emission vehicle sales. Auto manufacturers are currently challenging New York's and Massachusetts' decision in court.

Another issue that NAFA is currently seeking clarification from the federal government is on airbag deactivation. NAFA has asked the National Highway Traffic Safety Administration (NHTSA) whether fleets under certain circumstances could deny drivers the right to install an on/off airbag activation switch. As of press time, NAFA had not received a reply from NHTSA on this query. One concern is that drivers can download (via the Internet) an airbag deactivation request form from the NHTSA website.

"The reason airbag deactivation is critical to fleets is because there are liability issues," said O'Connor. He advised that fleet managers should develop a written policy as to when a driver can deactivate an airbag switch.

Uncertainty About Clean-Fuel Legislation Troubles Managers

Many fleet managers attending FMI said clean-fuel vehicle purchasing mandates, particularly the uncertainty regarding their requirements, as being among their major concerns.

"The regulatory climate has been an on-going issue the last 10 years. I'd like to know, with some reasonable lead time, if we're going to be faced with regulations that impact our fleet, such as being forced to use certain types of vehicles for clean air purposes," said Tom Sours, superintendent, company fleet, for State Farm Mutual Auto Insurance, Bloomington, IL.

"Any time you're required to use certain vehicles, it impacts your operation," Sours said. "Costs are always an issue, but those are decisions that individual companies get to make. Companies don't get to make regulations. They're often made without significant input from us."

Nor is there an adequate number of fueling sites, said Donna McDonough, fleet administrator for Mellon Bank in Pittsburgh. "Manufacturers have to build alternative-fuel vehicles, but there are infrastructure issues. The fuel providers just aren't there. So it's the chicken-and-egg theory - which comes first?"

The cost of converting a fleet to alternative fuels is an issue for Windell Mitchell, fleet manager for King County Transportation in Washington. "The key challenge is converting to alternative-fuel vehicles but keeping the costs down, because the cost of conversion is high," Mitchell said. "In 1991, a King County ordinance required a certain percentage of our vehicles converted to alternative fuels. Currently, 50 percent of the county-run vehicles are alternative-fuel vehicles."

Even the manager of an exempt fleet voiced concern about the Clean Fuel Fleet Program.

"Even though we're exempt, we want to be responsible because of corporate image and we want to do the right thing," said Sue Miller, domestic fleet manager for McDonald's Corp., in Oak Brook, IL. "We're partnered with Ford and, fortunately, they have a lot of vehicles in compliance."

Managers of state-run fleets are also affected by alternative-fuel regulations. David Can; manager of motor pool operations, University of Washington, Seattle, said: "I run a university fleet, so we have to comply to federal regulations, such as the 1992 Energy Policy Act, which applies to state fleets that are capable of being centrally fueled. For instance, by 1998 15 percent of vehicle purchases by state fleets must run on alternative fuel. Electric vehicles are expensive. We must have a balance between following regulations and controlling the costs."

Safety Issues Also Weigh Heavily in the Minds of Fleet Managers

Although no seminars at the FMI were dedicated solely to safety, several fleet managers listed safety as among the top issues they face. McDonough of Mellon Bank said safety was second among the top issues she has to face.

"With side airbags coming, there are liability issues - we could be sued," McDonough said. "When I inspect a vehicle, I'm looking for safety first. I would like to see daytime running lights as a standard feature because I think it increases a vehicle's visibility tenfold."

Other fleet managers also cited safety as their key fleet management concern.

"It's important to make sure you have drivers who are safe and that the 'crash ability' of cars are good," said Debbie Mize, fleet manager, Hallmark Cards Inc., Kansas City, MO.

"We're a safety-oriented company. You need to be when you're in the construction field. I keep a file and spreadsheet on each accident," adds Tom Patrick, fleet manager, McDonald-Miller Industries, Seattle.

Emerging Technology Promises to Impact Fleet Productivity

Issues such as technology's role in the fleet industry were addressed in the many educational presentations made at the NAFA event.

In the seminar, "Productive Fleet Management Via the Internet," three fleet managers shared with attendees how their fleet operations are employing Internet and Intranet systems to increase productivity.

The first speaker was Jack Harris, fleet manager for UC Davis. The university is currently building a campus-wide Intranet site, which will include information on the fleet department.

One feature on the Intranet is a serviceability standard for fleet mechanics, which provides guidelines as to when a part shouldn't be replaced. The next speaker was Joe Poznick, director of Car Fleet Services for Digital Equipment Corp., who discussed how the Intranet site is used to support the corporation's 3,800 vehicles. The site has been operational for two years and includes the company's fleet policies and procedures, forms which can be downloaded by drivers, vehicle information and specifications, a quick reference "program guide" that provides key driver program information, management reporting, and the company-related news.

The third case study was the State of Minnesota's Travel Management Division. It maintains a fleet of approximately 1,700 vehicles for rent or lease by state agencies, counties, municipalities, school districts, and other political subdivisions.

Its website includes a listing of all staff members and their phone numbers, a listing of authorized travel agents, the state's travel policy, and state statutes relating to the state fleet.

Also, state employees can reserve pool cars using the division's Intranet system or sign up for the commuter van program pool.

Other features to the system include the ability to track pertinent data on specific vehicles such as odometer readings, license number, performed maintenance, and upcoming maintenance requirements.

In another seminar, "Select the Right Fleet Management System," Christopher Amos, commissioner of equipment services for the City of St. Louis, said the most important asset with your current fleet management system is the data. He said the only way to evaluate software is to "test drive it" and said this is what you should look for:

Asset Tracking Capability. This includes tracking vehicle assignments, different maintenance schedules for different types of vehicles, depreciation rate, and replacement cycles.

Labor Collection. This includes performance measurements of employees, the capability of real-time monitoring, the ability to read and store bar code data, and the capability to interface with your payroll department computer system.

Outsource Tracking. This includes tracking cost from an outsourcer and the ability to assign this cost to a specific vehicle in your fleet. The software should be able to track repair requirements while the vehicle is under warranty.

Parts Management. This is the most difficult aspect to running a fleet maintenance program, Amos said. The sole purpose of the parts department is to have parts on hand so the mechanics can get their job done on time. In terms of parts management, software should be able to track stock levels such as maximum and minimum stock levels.

 

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