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The start point for the best source of fleet information |
Fluctuating costs and the unpredictability of Brexit mean fleet managers are constantly under pressure to take control of their budgets.
Fuel contributes 25-30% of a vehicle's whole-life costs and this figure is only rising. What most fleets don't realise is that fuel is not a fixed overhead that has to be accepted.
Instead, fuel is a controllable cost, and there are three key aspects to controlling it: vehicle choice, mileage management, and efficient driving. "Or to put it another way: choose efficient vehicles; drive them less, or when you do drive them, drive them efficiently," Matthew Eastwood, head of transport at Energy Saving Trust (EST) tells BusinessCar.
A recent Autoglass survey of 250 UK fleet managers revealed that 66% identify the price of fuel as their biggest worry, with 64% putting servicing and maintenance at the top of their concerns.
"Such data is far from new," says John Pryor, fleet and travel manager at Arcadia group and chairman of fleet operator association ACFO. "It has been acknowledged for many years that fuel is typically the second-biggest vehicle expense facing all businesses, potentially accounting for at least 25% of fleet expenditure. Clearly, fuel pricing and pump price volatility is not a cost that is controllable by fleets; however, there are steps that fleet managers can take to limit expenditure," he says.
As greener motoring and a focus on Ultra-Low Emission Zones in cities like London present additional challenges for businesses, the dilemma for fleet managers is to find a way to balance the financial pressures of their business with enabling employee mobility, in an environmentally sustainable way.
Vehicle choice is about getting the right vehicle for the job.
"It must be recognised that fuel management starts with fleets choosing the most fuel-efficient vehicles to use on business. It then continues with journey planning and travel management and the way in which employees drive when behind the wheel," explains Pryor.
Eastwood agrees. "This includes selecting the right size of vehicle and when necessary downsizing to avoid using a larger vehicle than necessary, which is relevant to both vans and cars," he says.
Choosing between different models within the same class is also something to consider, as there is often surprising variation in efficiency between models within the same class. "Then there's choosing the right engine variants; and choosing the right fuel. On the last point, the surest way for a fleet to reduce fuel costs is to choose electric vehicles (EVs) where they're suitable," Eastwood explains. "And with ranges increasing all the time - witness the Hyundai Kona car costing approximately £30,000 with a 292-mile WLTP range - EVs are fast becoming a practical proposition for more and more drivers.
Even after these considerations, when fleet managers have purchased fuel-efficient vehicles for the fleet, how do they then ensure that fleet drivers who don't own their cars or pay for their fuel will take care of how they drive? Usually, fleets are pointed in the direction of driver training, which IAM Roadsmart in our interview in this issue (on page 22) believes is vital for fuel savings.
Fleets can also instil disciplines such as not buying super unleaded and only using 'low-price' outlets, says Pryor. "Fuel cards are also recognised as a major asset in managing fuel expenditure. There are many types available from single oil-company-branded cards to those that can be used at a wide cross-section of sites, including supermarket-operated forecourts.
"The benefits include the ability to programme individual cards with preset spending and usage limits, which gives immediate control and removes the potential for fraud, and single consolidated invoicing."
Secondly, consolidated online management reports, typically issued monthly, detail fuel purchasing and usage, which then enable employers to calculate average fuel consumption for each driver. "Poor consumption figures will identify costly driving habits that can be remedied through management action ranging from highlighting the problem with the employees concerned to a comprehensive driver training programme," explains Pryor. "Similarly, an underperforming vehicle will highlight that action could be needed to remedy a specific mechanical fault."
The fleet decision-makers' 'holy trinity' of issues around cost, environment and duty of care should be viewed collectively and not in isolation, Pryor says. One of the keys to cutting costs is to encourage employees to drive 'smarter'. "It means drivers anticipating what is ahead of them on the road and driving as smoothly as possible, avoiding harsh and aggressive acceleration and braking," he adds.
Experts view 'smarter' driving as a solution to improving road safety, sreducing the environmental impact of driving and, ultimately, saving money - perhaps as much as 10% if some claims are to be believed, says Pryor. "However, any training introduced should not be seen as a one-off. It is too easy for drivers to revert to old habits. Therefore, it is imperative that 'smart driving' messages are continually communicated.
"Furthermore, it is business-critical that fleet managers have an exact idea of fuel expenditure on an individual driver-vehicle basis before any driver training is undertaken. It is impossible to manage and monitor future costs/savings if a fleet manager has no idea what the financial starting point is."
Eco-driving or fuel-efficient driver training has multiple benefits and shows an excellent rate of return on investment. Eco-driving reduces fuel bills, collision rates, and wear and tear on vehicles, believes Eastwood.
In fact, the trust has subsidised on-road eco-driving training for nearly 70,000 business drivers in England and Scotland, and on the day of training, it sees an average 13.5% reduction in fuel consumption. Studies of the long-term savings show 3.0-6.2% fuel consumption reduction in the 12 months after training. "Of course, whether a fleet sees savings nearer the top end or the bottom of that range will depend very much on the ongoing management after training, so we always encourage fleets to monitor and manage drivers as much as is practical," says Eastwood.
Most of the UK's large fleet training companies are involved with the EST's subsidised schemes, offering a range of training courses, all of which include EST-approved eco-driving delivered by experienced fleet trainers. "Courses vary from short-duration training focussing entirely on efficiency, to longer duration half-day or full-day courses predominantly about safety but including efficiency," says Eastwood. "Prices are set by suppliers but vary from around £40 per driver for short duration eco-driving course, to closer to commercial rates for the half-day and full-day courses."
Several training suppliers also offer dedicated EV and plug-in hybrid training courses that not only help drivers become familiar and confident with specific features in EVs such as regenerative braking, but also provide them with tools and techniques to increase the range of their vehicles, Eastwood explains. "On the day of training, we see an average of 18% increase in battery range, which really helps drivers get the most out of these newer vehicle types and reduce range anxiety."
While driver training is essential, it's not a cure-all, says Kevin Hennelly, head of sales at Lightfoot. "Unless drivers know the best way to handle their vehicles and approach certain situations, how can they ever be expected to make those changes?" Training only goes so far, he says. "Think back to a training course you may have taken a year or two ago. Do you remember the basics of it? Probably. Do you remember to put it into practice every day? Probably not. A few months after completing any training, regardless of who you are or what you do, there is a big drop-off in practicing the skills and lessons learned."
Consistent, real-time feedback is, in Lightfoot's experience, the most effective method of implementing genuine, lasting behavioural change. But this can't be achieved through driver training alone, although it does help drivers understand where they might be going wrong. "We suggest a combination of in-cab technology, a rewards system and driver training for those who don't respond as a good way to reduce costs and improve safety," says Hennelly.
Lightfoot claims to offer a long-term antidote to inefficient driving and fuel waste. By providing drivers with responsive, real-time feedback, Lightfoot delivers guidance in the moment it is needed rather than at intervals dictated by management or training companies.
Lightfoot tries to come up with ways of limiting fuel costs by helping fleet drivers adopt a smoother driving style. "In fact, in our previous life, we manufactured hybrid systems, which were retrofitted into vans and yielded a 20% increase in efficiency in the lab," says Hennelly. "Yet, when the vehicles hit the road, our customers saw little to no reduction in fuel expenditure. Why? Because they were driven inefficiently." Hennelly tells us, "It doesn't matter how much you invest in new, clever engine technology. If your drivers have their feet to the floor most of the time, you won't see much benefit."
While driver education is key, beyond that, Hennelly says Lightfoot has learned that incentivisation goes a long way to making these changes permanent. "Giving drivers something back for doing good is what we do, and it works," he explains.
"Through our dedicated rewards platform, drivers are given the incentives needed to ensure lasting behavioural change. If you can win the latest tech, holidays, meals out, and more for being a better driver. Why wouldn't you keep it up?" asks Hennelly.
"Our advice to fleets wanting to lower their fuel costs would be that until you focus on your drivers, you will not get consistent results. Whatever route you take, if the driver is not at the heart of your plan, you're not going to get the results you want."
Lightfoot's approach is centred on rewarding positive behaviours rather than punishing negative ones. "Identify the causes of fuel waste and work with your drivers to address them," Hennelly says. "If you can establish incentives to encourage the adoption of smoother driving habits, excellent, or you can always talk to us about how our pioneering technology can help deliver consistent fuel savings. Otherwise, do what you can to establish best practice for drivers - not accelerating towards red lights, steady acceleration away from junctions and roundabouts, and a calmer mindset when driving can all help to establish a smoother driving style."
The best management usually involves a mixture of carrots and sticks, Eastwood explains. "For example, eligibility for bonuses for the most efficient drivers, and conversations, cautions, extra training or whatever is deemed most appropriate for the least efficient."
Telematics can also have a great role to play in encouraging safer and more efficient driving, notes Eastwood. "And because anticipation is really the key to safety and efficiency, if you achieve improvements in one you'll almost certainly also see improvements in the other," he says.
Overall, for effective business fleet management with reduced fuel spending, Eastwood says a holistic travel policy is recommended. "Ways of improving mileage management include optimised delivery schedules, better route planning, and use of remote working and
tele-conferencing."
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