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In Focus: Fleet Operations

Date: 15 December 2022   |   Author: Martyn Collins

As Fleet Operations' 20th anniversary year draws to a close, Martyn Collins speaks to Richard Hipkiss, managing director for the company, about the past, its successes and the future.

With Fleet Operations celebrating a big birthday, I first ask Hipkiss how has the market changed over the years? 

"Well for our specific sector, in terms of fleet management and in terms of impact and change for our business first off, we started out as a consultancy organisation," he starts. "We really started to see a shift towards outsourcing from 2006 onwards. As part of that, we've seen in-plant models where we put people in businesses to replicate (almost), the old-school fleet management way of having a presence on site, all the way through to full outsourcing.

"People say that the role of the fleet manager is dying. I don't believe that, I just think it's changing. Over the last 10 years, we've seen a lot of fleet managers that are called something else, like Category Management in Procurement, but they are generally doing the role of a fleet manger, albeit with little bit more focus on cost and less administration. 

"If we talk about the recent past, we've seen a bigger need for fleet expertise within organisations, because of the amount of change that has been seen in the industry - including the focus on electrification and decarbonisation. I think it's interesting that 20 years on, we are seeing a bit of a resurgence in the need for fleet managers.

"Outside, the industry has changed significantly. The number of company cars on the road and the number of roles that make company cars accessible, has seen a significant reduction - although we've seen a massive growth in LCV over the last five or six years. 

"It still very much resembles 2002, albeit with different ways of working, new technology, and less appealing company car tax - unless you're driving an EV!"

Hipkiss tells me the pandemic has brought significant growth for the business, with the driving force behind that being the amount of change that's happened in the market. "Some of it was driven by Covid-19, some was driven by all the other external global factors. There's - probably in the last couple of years - been as many events and change as there has been in the previous eight or 10. 

"It has all come at once and customers need guidance, they need advice, and they need support. That's what our business is about, so we've had a lot of approaches from organisations, and we've had some significant new business wins for this reason. 

"We can guide the customer, we can advise, we can support, but also, I think that because we're still a smaller business with large customers, we're more agile, so we can adapt to the changes in processes needed because of what's happened in the industry. We can quickly facilitate changes to enable us to support customers much quicker than larger organisations. I think within larger organisations there is a bigger impact on their people in terms of retaining and growing the teams, and that directly links to service. Now, we're seeing customers move to us, because the service they were getting just isn't good enough, we've seen that a lot."

According to Hipkiss, Fleet Operations is seeing significant growth in fleet management and consultancy, alongside their pay-as-you-go maintenance product, and a burgeoning requirement for technology. 

"This is because of changing working patterns, workforce mobility and heightened levels of connectivity, especially around LCV fleet," he reasons. "A lot of our LCV customers have seen a considerable increase in the number of vehicles in their fleet. As a result, we've seen a significant uptake and rising demand around technology and apps. 

"It is about making things easy, using technology to automate processes and enhance the customer journey."

Fleet Operations has growth objectives; Hipkiss is quick to point out that they started in 2002 with just two people and they currently employ more than 80. 

He says: "We'll see that number grow - not at the same rate as previously, because of the automation and the technology that we've got. We've built a lot of in-house technology, but we will probably see at least 10% growth year-on-year, certainly inside the five-year forecast that we've got. That growth will come from several of our existing products and some exciting new ones that we'll be launching over the next 18 months. 

"We've got a very broad range of services, because the profile of our clients can often be very different - even though fleets and vehicles can be similar. 

"Depending on the type of organisation, their size, what they do and how they operate, we must be quite bespoke in terms of what we do. We also need customers to have access to a broad range of services to build up a service provision that works for them. So, because of the broad range of products that we've got, we can adapt to the market quicker, and we also see significant growth because of product penetration."

Fleet Operation's customers generally save 5% TCO year-on-year, with some services delivering up to 40% savings, although Hipkiss admits that's becoming more of a challenge now. 

"The opportunities for cost reduction are limited, so controlling every single element of vehicle TCO is an ongoing challenge for us and our customers," he said.

"We look across all the different cost areas and procurement categories, when we implement for a customer and look at the most cost-efficient way of doing things. It may be fleet resizing, funding method, unbundling, multi-supply or moving maintenance from budgeted to pay-as-you-go.

"A recent example of that was an 18% net maintenance saving over the duration of a contract. We do a lot of tactical buying for customers, too. On a recent batch of 300 vehicles, we managed to save and inject cash into that business to the tune of around £400,000. 

"So, there's a lot that we do, but we don't necessary shout about our different approaches. We've got some very strong partners in place, including leasing companies, rental, accident management, telematics and so on. These collaborations strengthen our model, allows us to be close to the market, and see what opportunities are available, which often result in savings and more cash for the customer."

Future product innovations centre around the release of a stand-alone fleet management system, that has extensive automation, Hipkiss is keen to tell me. 

He says: "We as a business have been managing fleets for 20 years and we know how the entire landscape fits together. We know what's possible with automation, we know how to plug and play suppliers. So, we're translating that into a platform that enables fleets, both large and small, to manage their own fleet, mobility, bring in suppliers and services as appropriate, and get to a level of automation that doesn't exist in the market. That's our objective over the next 18-months."

"These are exciting times and our 20th anniversary year has been a cause for real celebration.

"Fleet Operations has been on an exciting journey over the past two decades and has played an integral role in the evolution of the UK fleet industry. We have our staff, customers and partners to thank for our success.

"We recognise, however, that making a difference means not only driving change within our industry, but also creating social value and so we've been determined to give back. To mark our anniversary, we've set about raising £20,000 for 20 local and national charitable causes and we're proud to be changing lives for the better.

"We now set our sights on the next 20 years. We're on a trajectory of accelerated growth and innovation. What does the future hold in store? Watch this space!"