How to put together your North America fleet policy

By Daniel Bland - March 1, 2023

Twitter?@DanielBlandBiz?GlobalFleet.com?-?FleetLatAm.com

Developing an efficient fleet policy can be quite a challenge across large regions, especially in the competitive market of North America where total cost of ownership (TCO) is of utmost importance.

To get a better idea on how to do this, Global Fleet acquired insight from executives representing the largest vehicle leasing and fleet management companies in the United States and Canada.

Although some differences exist between the two countries such as climate associated issues, your overall approach should remain the same.?

“Focus should start by initiating and enforcing policy across all levels, and then carry out ongoing periodic reviews to ensure regional changes or regulations are captured and implemented in a timely manner,” says?Bradford Burgess who is VP of Commercial Operations, Marketing, and Global Partnerships at Element Fleet Management.

And, according to Wheels Donlen LeasePlan CEO?Shlomo Crandus, “A successful fleet policy should reinforce the core values of your company, otherwise it won’t be embraced and followed by the people who “live” it.”

Finally, do not forget to balance offering management autonomy with hands on support.?

“Although we are constantly evolving our customer website by adding more content for our fleet operators who want to be more self-reliant, the important fleet decisions on lifecycle considerations, such as when to buy or sell vehicles, will always require a very strong relationship with our account managers,” says Enterprise Fleet Management president?Brice Adamson.

Optimizing TCO

The key to monitoring and optimizing costs is ensuring that your efforts align with your company’s strategic business vision and budgetary goals. Everyone agrees that they want to control costs, but the strategies will vary by fleet.?

For some, optimizing cost means reducing maintenance costs, while for others it could mean lowering downtime. One factor to be observed in the North America market recently is the availability of vehicles and its impact on the “aging fleet”.?

“According to AAA, the average age of a vehicle in the U.S. was 10.6 years in 2010 and it is 12.1 years in 2023. We foresee this trend continuing for the near future and anticipate higher downtime, resulting in higher TCO,” Mr. Crandus told Global Fleet. With that said, given the “fleet aging” trend and other volatility in the market – higher interest rates, cost of electric vehicles, and parts – it is more important than ever to monitor your replacement cycles.?

The North American model allows for the flexibility to match market timing, take advantage of spot opportunities, and/or set a varied depreciation rate. Don’t just “set and forget” – a strong fleet management partner will identify cost trends and partner with their clients to actively manage and advise.

“Also remember that maintenance management efficiency is key. Our Auto Integrate system is a great tool for this as we can reduce driver downtime. By setting pre-approved limits, we can liaise back and forth in real-time with our repair shops in a more efficient way,” says Mr. Adamson.

Moreover, keep in mind that actively managing replacement projections allows fleet operators to take advantage of the resale market and improve order budgeting.

“Our Strategic Consultants proactively employ advanced analytics, various data models, and other tools to analyze TCO; helping clients strategically identify and implement initiatives to drive cost savings.?

Continuous monitoring and benchmarking are key to ensuring TCO visibility and driving accountability for expected cost savings trends,” Mr. Burgess told Global Fleet.?Read more here...