Automotive Fleet

JAN 2014

Magazine for the car and truck fleet and leasing industry

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2014 FLEET TRENDS Te key issue is the unpredictability of fuel costs and how long they will remain stable. "Te ever-changing fuel situation is a major challenge. How do you budget sales rep expenses if you have no idea what the cost of fuel will be?" asked Woloszynek of National Gypsum. For businesses that rely on their feets to move products to market, higher fuel prices not only impact feet operations, but also business in general. Margins are further squeezed by the additional cost of mandated diesel emissions technology, which has increased truck acquisition prices. At companies relying on truck feets to move products, higher fuel prices are a concern because the price margins are already tight, forcing companies to explore less costly ways to distribute products. One silver lining to high fuel prices is that it has prompted many companies to reinvigorate fuel-efciency initiatives. All aspects of fuel management are being examined, including route efciency, vehicle payload, territory coverage to reduce miles driven, and fraud management processes. Another way to mitigate fuel costs is to revise vehicle specifcations. "To decrease fuel usage, we are evaluating new vans with increased mpg and cargo capacity," said Morris of DirecTV. Another strategy is idle reduction initiatives as being pursued by David Hayward, feet operations manager for AmeriGas Propane in Valley Forge, Pa. Safety Gains Increase Urgency Driver safety and reducing liability exposure is a major challenge cited by commercial j g y feet managers. In particular, the challenge is to reduce preventable accident rates and associated repair costs, downtime, and lia- bility risk. Some feets are focusing on driver training to reduce the incident of preventable accidents. In an era of higher expenses, the cost to repair accident damages is ofen SWITZKY an eye-opener for many feet managers. Ofen, what appears to be minor to moderate damage can turn into a substantial expense. In addition, feets are also focusing on ways to minimize driver distraction. Fleets view driver distraction as a major challenge afecting their operations. One challenge is ensuring drivers comply with company distracted driving policies. Although having high visibility on the feet manager's radar screen, driver distraction promises to take center stage as senior management becomes increasingly concerned about the consequences of potential liability exposure. Universally, senior management views driver distraction as a signifcant liability risk, especially as drivers ignore corporate restrictions and surreptitiously use their own mobile devices in company-provided vehicles. As more drivers use their personal handheld wireless devices, it is becoming a greater feet issue. "How do you efectively control the use of all the technical equipment, such as laptop, cell phone, GPS, and iPads, and still feel like your drivers are safe in their vehicles?" asked Woloszynek of National Gypsum. Most feets have a documented feet safety policy that is distributed to all drivers who are required to acknowledge req g ceipt and sign that they have read the docdo ument. "Te challenge with driver safety is b not only putting items in a feet policy, but A common strategy to reduce feet cost is to downsize to smaller vehicles, but the line between downsizing and driver disatisfaction is a fne one. Other cost-control strategies include a shift to different vehicle classes. making sure the drivers are adhering to the policies," said Switzky of American Family Mutual Insurance Company. Te bigger issue is how to create a corporatewide safety culture. A key issue is getting buy-in from senior management, as well as drivers, on the importance of a robust safety program. "You need to get the right people involved in making hard decisions," said Tur of American Greetings. Sometimes this is difcult to do. "Conveying the importance of safety and driver distraction to executive management at a time when productivity seems to be the primary success lever in most business units can be a tough sell," said one feet manager who wished to be anonymous. Some companies are adopting technology as a way to reduce accident expenses. "We are looking to reduce physical damage through the use of new in-vehicle technology, such as sensors, alarms, etc.," said Morris of DirecTV. However, some feet managers remain wary about technological solutions. "Tere is too much smoke and mirrors in this area. It would be great if there could be a Consumers Report for feet that would test a product versus its competitors and then report the results," said Meisel of PG&E. Other feet managers say their primary safety challenge is identifying the problem drivers. "Risk assessment of my drivers and procedures for dealing with problem drivers STRUNA is a challenge," said Debbie Struna, feet manager for Rite-Aid in Camp Hill, Pa., adding that personal use is compounding this issue. "How can I promote safety and vehicle policies with drivers who are using their personal vehicles for company business?" More companies are now adopting driver scorecards to identify high-risk drivers and taking the appropriate action, getting support from management to terminate if necessary. Productivity Strategies Implementing productivity strategies in large corporations is very difcult, since feet touches many stakeholders within an organization, ranging from fnance to hu- 24 4 AUTOMOTIVE FLEET AUTOMOTIVE FLEET I JANUARY 2014 UT MOTIVE LEET MOTI TIVE JANUARY 2014 AN A 01

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