Johan Van Niekerk Fleet Consultant, Fleet Domain, part of the ATG group, discusses Fleet Management during Covid19 and going forward.
As with so many industry sectors, the Covid19 pandemic has massively disrupted the Fleet Management arena to an extent never previously experienced.
Disruptions of deliveries, order cancellations, non-payment of accounts and many other influences are forcing company executives and fleet managers to re-evaluate all factors that influence fleet operating expenses.
Looking at the Life Cycle of a fleet vehicle, management must focus on areas where costs can be reduced, risks mitigated and safety improved.
Fleet policies governing all the components of the Fleet Life Cycle.
Fleet policies governing all the Fleet Life Cycle points should be in place. These policies should be agreed upon by management and the fleet department and then circulated to all company car drivers and allowance users.
Selection criteria for acquiring a vehicle should be based on usage requirement, correct vehicle for job application and actual lifelong cost to the company. The only way to determine this is by applying the Total Cost of Ownership (TCO) evaluation process.
Procurement principles in the selection of specific vehicles from designated manufacturers/group dealerships or individual dealers should be agreed upon at the outset. All pricing influencers such as discount, on-road costs, workshop labour and spare parts rates, downtime assistance and delivery costs should also be agreed. This can be done by having a Service Level Agreement (SLA) in place.
Vehicle Financing can be done via various options. The best financing option should be investigated by comparing Lifetime Costs and Discounted Cash Flow (DCF) options. All factors from procurement to disposal must be taken into consideration. Improving cash flow and mitigating risk should be noted as key objectives.
Operations: Maintenance, Tyre and Fuel expenses can be managed by engaging various types of service providers. There are Fuel, Maintenance and eToll cards available from all major banking institutions.
Financial institutions and specialist fleet management companies also generally provide managed maintenance product offerings – you can then select the one most suited to your needs.
GPS/Tracking service providers can supply information that enables the company to change and improve driver behaviour. The result is less accidents, fines and HR cases resulting in a better safety and risk profile for the company.
Accidents can be managed by the companies Insurer or the services of an accident management service provider. Both should be able to supply comprehensive reports which in turn should translate into the creation of actions that will influence driver behaviour and highlight areas of improvement.
Fines Management, in terms of the new suggested AARTO regulations, will become a very important factor in risk mitigation. Company driver, fines as well as their private fines, will have an influence on Insurance, HR interventions and driver training.
Replacement policies govern timeous replacement of older fleet vehicles. Ageing fleets lead to increased down time, a decline in driver morale, lower resale values and incremental escalations in replacement costs.
Vehicle Disposal of terminated vehicles should be planned to coincide with delivery of replacement vehicles. The possible resale value and benchmark price reserves should be determined prior to the method of sale. Sale of vehicles can be direct to staff members, on auction managed by experts in the field or as trade-in with the new vehicle supplier. All of this should be aligned with the agreed principles as set out in the SLA.
FleetDomain has developed a fully integrated Fleet Management Information System (FMIS) that can assist companies to reduce fleet operating costs and achieve valuable savings during and after COVID-19.
By centralising all cost influencers on one platform, from procurement to disposal, the actual TCO and Cost per Kilometre can be determined, per vehicle, in the fleet. This enables accurate budgeting, future financial forecast requirements, what areas to improve on and develops a fleet department that adds value by improving the Return on Investment (ROI).
Brief Bio: Johan van Niekerk, Consultant, Fleet Domain – a member of the Argility Technology Group.
Johan van Niekerk boasts 34 years’ experience in fleet management, sales training, and consulting. His skills include fleet data analytics, reporting, and financial expertise. He has a profound understanding of the fleet industry including funding options, safety, and risk assessment plus the development of safety, driver, and vehicle policies.
Over the years he has gained experience conducting fleet evaluations and audits plus providing fleet management training to executive and various levels of management personnel. He has also conducted fleet sales training courses for manufacturers, automotive groups, and dealerships.
Johan places improvement of ROI in corporate enterprises and parastatal organisations through fleet optimisation – as his main business objective. He also assists businesses with budget development, scenario analysis, forecasting and ultimately the entire management spectrum of corporate fleets from procurement through to disposal.