Firms turn to procurement to manage fleets

16 May 2013

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18 May 2013 | Andy Allen

The number of dedicated in-house UK fleet managers is shrinking and those that remain are becoming increasingly focused on controlling costs, even as the number of fleet vehicles in the UK continues to grow.

The Alphabet Fleet Management Report for 2012 said one of the most striking changes over the last 12 months is the rapidly shrinking number of dedicated in-house fleet managers in the private sector.

“As fleet responsibility migrates to procurement, finance and particularly, operations departments, more fleet operators are turning to outside specialists to manage their vehicles,” the report said.

More than twice as many organisations in 2012 as in 2011 outsourced their entire fleet management: 18 per cent of respondents to the 2012 survey, compared to 8 per cent in 2011. Some 57 per cent of private sector operators had outsourced fleet maintenance, compared to 43 per cent of public sector operators. Almost 40 per cent of those who fully or partially outsource their fleet had done so during the past year to save costs.

According to the report, understanding and controlling costs and reducing fuel consumption are now seen as the top priorities for fleet managers.

Around 62 per cent of fleet managers had negotiated with suppliers, making it the single most popular way to achieve cost reductions.

The report added that improved procurement strategies have already saved fleets hundreds of millions of pounds in recent years. “The number of fleets using, or planning to base choice lists on, whole-life cost calculations rather than list prices or lease rentals continues to rise,” it said. Public sector operators lead strongly in this area with 83 per cent of them using whole-life costs compared to 56 per cent of private sector fleets.

Insurance has overtaken repair and maintenance as the area where the greatest number of fleets have seen cost increases, with 40 per cent paying higher premiums.

Three-quarters of managers in the public sector listed the environment as a priority, compared with only 40 per cent of private sector operators.

“Public fleets’ heightened level of concern about issues that are not overtly cost related suggests they feel their performance is subject to more scrutiny, and from a wider constituency of stakeholders, than their private sector counterparts,” the report added.

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