ARI is looking to cement itself as a major player in the fleet management industry in the United Kingdom, and a recent strategic alliance it formed with Royal Mail lays the groundwork to accelerate its growth plans. This would be by way of targeting critical commercial vehicles fleets with a full range of fleet management services and vehicle funding solutions.
The postal service company and fleet management company formed a strategic cooperation agreement in April with the primary goal of providing around the clock maintenance management services for cars, vans and trucks, combining ARI’s technology and fleet management services and Royal Mail’s extensive in-house garage network with over 100 sites nationwide.
Royal Mail commenced its journey to commercialize its in-house garage network some two years ago, and having built a relationship with ARI, both companies saw the opportunity of working together to accelerate their ambitions for growth targeting commercial-critical fleets in the U.K.
“We signed a strategic cooperation agreement in April this year. The real purpose of that was to put in place a formal five-year agreement where we direct 25% of our existing business to Royal Mail garages and we jointly bid on new business opportunities providing a compelling solution for commercial fleet operators,” said Keith Allen, managing director at ARI.
The result: something unseen in the fleet industry in the U.K., according to Allen.
“Its game changing for our U.K. business, and future growth prospects,” he said.
Benefits of the Alliance
Through the alliance, ARI offers fleets service via its Masterserve network of over 500 garages, and Royal Mail, which is the largest fleet in the U.K., with a 110-strong workshop network that manages and maintains Europe’s largest vehicle fleet.
“We have 500 garages in the network but some might only get one or two jobs a year because they’re very remote, however, we need to provide nationwide coverage for our customers. The alliance with Royal Mail gives us additional coverage and the ability to provide off-hours service. This gives us more flexibility, as does working with a company that is continually investing in its garage network,” said Allen.
He also observed that the company’s share a similar market focus, further reinforcing their alliance.
“Bearing in mind Royal Mail is a critical mission fleet in terms of its need to be on the road to deliver parcels and letters. Their skill set is managing commercial fleets. That totally runs in parallel with our mission, which is to replicate the strategy of what ARI did in the U.S. from 2008 onward, which is focusing on critical commercial vehicles and fleets. And really with a focus on vans,” said Allen.
Allen noted that the key sectors focused on as a business in terms of critical fleets for the alliance are utility fleets, logistic fleets, security fleets, facility management fleets, construction fleets, and infrastructure fleets.
“Royal Mail Group is a well-respected brand in the U.K., with a 500-year history, and will enhance ARI’s profile in the U.K. fleet market with the cooperation agreement increasing the opportunities to win business. The cooperation agreement is all about exclusivity around us giving some of our existing business to Royal Mail but also ARI and Royal Mail working together exclusively on new business in terms of fleets with more than 500 vehicles,” said Allen.
Formation of the Alliance
The initial desire for Royal Mail to grow its business with ARI began about two years ago with it addressing its own logistics challenges resulting from its fleet of 47,000 vehicles, and, as mentioned, it was looking to commercialize its own garage network. Royal Mail began working with the fleet management company on overflow work for its garage network. ARI was able to supplement Royal Mail’s garage network with its own Masterserve garage network of over 500 garages.
“There was obviously a real synergy with us working together, they’ve got the largest independent garage network in the U.K., so it was clearly beneficial to have them as our primary network moving forward which drives significant productivity savings as well as guaranteeing a consistent high level of service across the network,” said Allen. “We continue to have the Masterserve garage network, which is a network of independents. However, this gave us more capacity to deal with heavy commercial vehicles and out of hours. And a lot of the fleets we’re talking to and dealing with really like the idea of getting their service maintenance work done out of hours, or at least twilight hours. This gave us two things: more capacity but also more capability, especially in terms of the investment. They are continually making significant investment in their garage network.”
With this strategic alliance, the outlook is that ARI may also provide its additional services to Royal Mail.
During the early stages of the partnership, Royal Mail was drawn to ARI’s technology. The postal service company was impressed with how ARI could take Big Data and turn it into meaningful and actionable information, KPIs, and dashboards. This is what led to the organization disclosing the commercialization of their garage network, and eventually to the alliance that exists today, which may lead to a fuller utilization of ARI’s services.
“ARI is continually investing in technology because we really are focused on fleet management in North America as well as U.K. and Germany. We really can get a lot of synergy, especially on the development side of what we do with technology. We are confident that the alliance will lead to further cooperation with Royal Mail taking a number of our services,” said Allen.
“They’ve got 47,000 vehicles, so clearly we want to be in a position to put some of our services into them. We are working closely with them to build reciprocal opportunities that will ultimately enable a win-win for both parties. However, winning third-party commercial vehicle business remains the primary goal for both ARI and Royal Mail."