Managing a fleet of cars goes beyond just the car itself. We sift through some of the fleet management tools needed to efficiently manage your fleet, and help you save on running costs.
Fleet management is not easy for small and medium businesses, especially when competing with the big end of town. But tools such as electronic logbooks, driver training, and novated leases make the process easier, and more cost efficient. So rummage through this toolbox to keep yourself in the super lean game.
Logbooks
Whether recording business kilometres, the actual driver, or vehicle activities, logbooks are a must for fleets. The downside? They can be a hassle, especially when paper-based.
“It’s inefficient,” says Nigel Malcolm, Fleetcare general manager. “Quite often mistakes are made, and the legislation isn’t understood.” Malcolm instead recommends electronic logbooks. “I think we’ll see an increase in that type of activity over the years,” he says, explaining it is easier to reconcile an electronic log.
The two electronic logbook options are handheld by PDAs and in-car devices. One such product is Fleetcare’s logit, a program that can be uploaded to either type for recording business travel percentages. “It does real-time communication and the driver just selects the parameters for the trip,” says Malcolm. “Based on those parameters, the software works out if the travel is business or private, and that gets stored in real time on an activity-by-activity basis.
“Logbooks are the best way of reducing your FBT cost,” Malcolm adds. Without the risk of human error, the Fringe Benefits Tax paid for personal use of the vehicle becomes easier to calculate–logit meets ATO requirements, and also allows data to be printed for more traditional storage.
GPS Services
There are other ways to monitor vehicle activity besides logbooks. An inexpensive option is to use electronic toll pass. By monitoring how often tollways are used, and if there is any backtracking, a fleet manager can decide whether it’s necessary to devise a new route.
“A lot of business is about doing some really good work with that kind of information,” says Malcolm. “Not quite as good as GPS and knowing exactly what the car is doing every second, but it does help.”
The added benefits of both portable and built-in GPS are obvious. They can track a fleet, pick up bad traffic, and even create a safer working environment. “The GPS, provided it’s been programmed before they start driving, can actually be a great driving aid and assist the driver to be a little more stress free, and a little more efficient,” explains Malcolm.
The uptake of the devices is still slow, but it’s picking up. “As navigation devices become more affordable and perhaps more mainstream, we’re noticing more clients are looking at this,” says Malcolm, though he adds it can be costly. “Even though you can buy units under $1,000 now, that’s $30,000 in a 30-car fleet. But as we see more and more vehicles coming out with it as an option, buyers might start leaning towards buying it as part of the vehicle.”
Bluetooth, both a portable and built-in option, also has numerous advantages in comparison to older in-car phone kits. “We’re finding many more fleets are demanding Bluetooth inside their vehicles,” says Malcolm. Bluetooth capability is not tied to a specific mobile phone model, so it will continue working even if you upgrade your phone. The cheaper fit-out cost will also help your budget.
On the list of the latest Bluetooth technology is the BlueAnt Supertooth Light Speakerphone. It can easily be attached to car visors, so you don’t need the traditional Bluetooth headset. And with duplex speakers and echo-cancellation technologies, it claims to allow better caller hearing. Plus, as it only weighs 115 grams, throw it into your bag to prevent theft.
If you find in-built Bluetooth more attractive, Toyota’s Prius is one of the options available. The Bluetooth system, available with the voice-activated DVD navigation technology, can pick up signals from handsets nearing a distance of 10 metres. The range does vary slightly, though, depending on the phone’s model and the level of battery power. Four different phones can be paired with each navigation system, and answering calls only takes the touch of the steering-wheel control or the navigation screen. Also, numbers can easily be transferred from Bluetooth phones to the vehicle.
What’s more, the Prius has a smart key system, and is equipped with Hybrid Synergy Drive. So with greater power, fuel-efficiency, and lower emissions, it’s also better for the environment.
Environmentally-Friendly Fleets
If a hybrid car doesn’t suit, there are cheaper ways to make your fleet green. “We don’t need to go to the extreme of buying a highly environmental vehicle, but maybe one with low fuel consumption,” says Malcolm.
Diesel vehicles are becoming popular because they use less fuel and have a lower operating cost, which saves your fleet money and produces a smaller environmental footprint. But Malcolm says even that’s one of the last options to be looked at when it comes time to replace the vehicles. “The first product we should all be looking at is the way we drive,” he says, explaining that backing off the accelerator and breaking softly reduces fuel consumption. “The benefit we’re going to get from less fuel consumption is going to save the business money, create less wear and tear on the vehicle, and it will potentially reduce the number of crashes we have because we’re not hooning around so much, and the environment wins.”
Some bad driving habits are deeply embedded, so driver training can be a good option to make a change. “It’s not about rushing in and training all of your drivers, it’s about identifying when there is a need to do training,” Malcolm explains. This could be because a specific driver is consuming excess fuel, or racking up an accident history, or just to make sure your drivers have the tips needed to make the most out of new technology in vehicles.
Driver training can be given in a class format or out at driver training locations. And it is also an effective way to ensure your fleet is safer. “They train people so they don’t get into a situation,” says Malcolm. “The workforce is extended into the vehicle, so they need to cover that as well.”
Checking tyre pressure also makes a big difference but it is often ignored. An incorrectly filled tyre can cause handling problems, premature wear on the tyre, and increased fuel consumption. Issuing tyre pressure gauges is one solution, but an inexpensive approach is getting drivers into the habit of checking the tyres and water once a week, when they fill up at the service station.
The very last option is carbon offsetting, but it should only be looked at once all other prevention and reduction methods are exhausted.
Fuel Cards
More and more fleet managers are issuing fuel cards to their fleets. “It is a device to make sure you control the cost of your fleet,” says Carl Clump, CEO of Retail Decisions (ReD). Clump believes the cards are more reliable than cash or a general-purpose credit card because product purchases can be limited to just fuel, or can be extended to oil, vehicle service, even accommodation and taxi fares.
Fuel card statements are ATO approved and can be used for reclaiming GST, ultimately saving you time and money.
The handy little cards also help fleet managers keep an eye on their fleet. “They will have a consolidated statement sent to the fleet manager of the company by us, which accounts for the products they’ve purchased,” says Clump. “From that information you can see how efficiently your fleet is operating, so you can isolate the vehicle or a driver who may be more costly than the other vehicles or drivers in your fleet.” The single statement also reduces administration costs.
ReD offers two fuel card options: Motorpass and Motorcharge. Both are multi-branded cards, and can be used at most service stations. The benefit of a multi-branded card is you don’t have to waste more fuel driving around to find a specific service station. Most fuel cards don’t charge interest on purchases either.
Leasing Options
These days more and more companies look to novated leasing, an alternative method of providing an employee vehicle. Aimed at employees who wouldn’t normally purchase a vehicle, it offers them tax benefits. “It is a really great staff retention tool,” says Malcolm. “Financially it can benefit them in so many different ways, and there’s no additional cost to the employer.”
The lease is an agreement between the fleet manager, employee, and financier, where the employee leases the vehicle from the financier. The payments are paid by the fleet manager, who retains the amount from the employee’s pre-tax salary to cover the cost. The employee then has unlimited private use of the vehicle.
“The big end of town has been offering this for years,” says Malcolm. “SMEs have realised they need to offer the same thing.”
Insurance Deals for Your Fleet
Keep in mind, none of these tools will mean much if your fleet isn’t insured, and choosing the right insurance can be a dilemma in itself. “Not all drivers are the same and no single insurance policy will be the same for everyone,” says Lauren Newlands, Cannex financial analyst. “Hundreds and sometimes thousands of dollars differentiate the lowest and highest premiums in all states, so the potential to save is enormous.”
Budget Direct, Cashback, and Allianz were awarded National Five Stars by Cannex, following their Car Insurance Star Ratings report. While these three companies stood out for their overall value, they were closely followed by Ozicare, NRMA Insurance, and AAMI.
Another option, especially if you want to cut out legwork, is to have a fleet management company find the best insurance policy for you. Fleetcare provides a one-stop-shop for insurance, and has the benefits of monthly billings and an accident management service.
Whatever your final decision, make sure you choose a policy with vehicle replacement, because you’ll want your employee back on the road, doing their job, as soon as possible.
No matter what the tool, make sure you shop around first to get the best deal for your fleet because one size does not fit all.
Best Value Insurers
Cannex has released its Car Insurance Star Ratings report, reviewing state and nationwide insurance policies.
The National Five Star Awards for superior value were awarded to:
Budget Direct
Cashback
Allianz
State winning insurers were:
New South Wales: NRMA Insurance
Queensland: Cashback
South Australia: ING
Tasmania: Cashback
Victoria: Allianz
Western Australia: Allianz
To download the full report, visit www.cannex.com.au
