About 100 senior executives and fleet managers attended the second annual Advanced Vehicle Asset Management Conference, held in Atlanta on Nov. 11-13, 1998, as industry experts presented new insights and trends on various areas of fleet asset management. Wide-ranging topics included globalization in fleet management, the increasing impact of technology, outsourcing alternatives, fuel management, and federal regulations. The conference was sponsored by Fleet Financials magazine, sister publication of Automotive Fleet magazine.
Global Fleet Explosion
Richard Netherclift, PHH's senior vice president, continental Europe, dealt with the globalization in fleet management. "It's not that markets are becoming global; they are global," Netherclift said. Today's markets are global through business consolidation, and getting leaner by reducing the number of suppliers. The emphasis of this global focus is to reduce cost, Netherclift said. An example is the recent global consolidation of Daimler and Chrysler in November 1998. "You need senior management support to make globalization happen," Netherclift said.
Benchmarking Performance
Scott Pattullo, vice president of marketing and general manager for Four Wheels Division, Wheels Inc., offered advice on key aspects of benchmarking performance measurements:
Know what your objectives are. Benchmark against yourself.
Evaluate different fleets, not just those that are perfect mirrors.
Hold your leasing company and manufacturer accountable because they have the data.
Patullo said that some companies have started to market their vehicles to employees, which has led to increased employee sales and decreased depreciation by $250 per year. Major cost savings have also resulted via lengthier replacement cycles.
Electronic Commerce
Les Rucker, manager for DMG-Maximus Inc., stressed that, as the new millennium approaches, it is necessary to develop preventive maintenance systems that help build interfaces to integrate their different data needs. "Solutions are available, but sometimes you have to go outside the box," Rucker said. Rucker also outlined the benefits of using a chargeback system and identified the essential elements of a successful fleet program.
Outsourcing Alternatives
A panel discussion explored outsourcing alternatives and accountability. Panelists included moderator Jim Anselmi, director of fleet operations and travel for Lorillard Tobacco Co.; Patsy Brownson, fleet manager for Cox Enterprises Inc.; Bob Cavalli, regional sales manager for Consolidated Service Corp.; and Charles Bowen, fleet director for Rollins Inc. Brownson said two ways to outsource are: 1) single-source (to negotiate one contract for equipment and supporting services), and 2) multi-source (to negotiate separate contracts for equipment and supporting services). Cavalli said management activity should never be completely outsourced; however, administrative/clerical activity should always be outsourced. Cavalli advised attendees to always retain the repair/replace decision. Bowen said strategic outsourcing has a place, but only if all the costs combined say it does.
Internet Technology
Technology continues to have an increasing role in fleet management. Chuck Parker, president of Automotive Information Network, explained how technology is creating new strategies and opportunities for fleet management today. "The Internet is about to change the industry in ways we have never seen," Parker said. Parker also said that remarketing and depreciation expense are the most important management functions. Gordon Warren, vice president of sales for Manheim Auctions, talked about AutoConnect.com, which was officially launched in May 1998. AutoConnect's features include: Internet listings of vehicles for sale; color digital photos of vehicles; listing of more than 60,000 units; and more than 1 million hits daily.The entire AutoConnect is updated every 21 days. The cyberlot was initially launched to sell vehicles to dealers in closed sale. Now it has migrated to other companies, such as lessors, to sell vehicles in open sale, Warren said.
Fuel Management
Two years ago, only 70-75 percent of companies provided credit cards for fuel purposes, according to Bob Lesch, director of fleet card program for GE Capital Corporate Expense Management Services. But since then, companies providing credit cards for fuel have increased to 94 percent, Lesch said. Here are some key trends in fuelcard use:
Commercial card spending will make up a larger portion of overall consumer and commercial credit card spending in the future. Commercial card spending in 1996 was 19.5 percent, and it will increase to 25 percent in the year 2000.
Bank credit cards will provide one-card options, multiple options, and one-reporting platform.
Smart cards are six to 10 years away.
Fleet Productivity
To increase fleet productivity, Mike Headley, vice president of strategic consulting for GE Capital Fleet Services, outlined two options for fleets: 1) decrease costs, or 2) increase revenue. The challenge lies in how to tie fleet productivity to relevant business outputs, Headley said.
Federal and State Regulations
Mary Tavenner, executive director for American Automotive Leasing Association, addressed what lies ahead for fleets concerning federal and state regulations:
