Share with us some background into how FleetVision has been working with NAFA to develop the International Fleet Academy.
The 2013 International Fleet Academy (IFA) was the fourth in a row since we started with a pilot project in the NAFA offices. Since then, we have been growing and growing and developing more content. For NAFA, we are what you can call a content partner. We don’t drive the bus – we are in the bus – and we help find the right people to bring the right content and to serve the need for providing information to NAFA members about the international landscape.
We are very happy with the mix of industry representation that importantly provides necessary input and the number of fleet managers that attend. We planned for about 40 people in a room because that leaves a certain level of interactivity and comfort with people to exchange knowledge among each other. We see that a lot, even during coffee breaks; we finish the presentation and people gather together and exchange information, anecdotes and war stories.
The attendees appreciate hearing the stories among themselves, not just from the suppliers that are also in the business to sell services, which of course we understand they need to do, and we are happy they are here because of their support for the event. But it is important that NAFA members have this level of comfort to exchange ideas among themselves.
The level of education has increased too. The guest speakers have become more comfortable with the topics. The members get more demanding, which is great because they push us to the next level and we like to see that. It is a good mix of having an excellent venue and social activity in the evenings as people build relationships.
I am very pleased with the feedback. People are really ecstatic about the amount of information that they get. I must say, we are sometimes a bit concerned that there is too much and that people are able to continue to absorb information at 4:00 in the afternoon. We also have attendees from different time zones, which is not always evident and we have to bear that in mind when we develop the program.
What is your current focus at FleetVision?
First of all, we are very pleased to have added Tobias Kern to our team. He previously headed up the consulting business of a renowned fleet management company in Europe. Not only does he represent all of our businesses in the German speaking areas, but already manages some very successful projects where he supports the international approach and helps us develop good relationships with multinationals that seek help on how to develop strategic fleet programs. That is a very important addition for us in Europe.
The other area that we have started to explore more is South America. We have rejuvenated our contacts there and are doing projects for our clients. We are supporting them in understanding the marketplace, the user profiles and economic climate. We help them make strategic decisions, such as which suppliers to talk to for the proper line-up and how to structure their fleet programs.
What are your clients telling you about their greatest concerns?
They are concerned that while thinking through their fleet programs and the budget constraints that they have, they lack resources and funds to help make the decisions that will benefit their company most in the long run. So, you see a tension building up between available resources and providing the right level of attention to a global fleet to provide long term sustainable efficiency improvements vs. short term gains.
That also means that there is demand for people who are very experienced in the marketplace who can help our clients make those decisions more efficiently and demonstrate a solid, financially sound business case.
We also see that people now are better able to collect data on their fleet that they can upload into existing global reporting tools such as FleetCube, and that will give them the insights to improve their decision making process.
For us, it means that our clients become more challenging, which is exciting. It also allows us to develop the relationships that they have with their suppliers to an even higher standard, which is a benefit for the whole marketplace. I am happy to confirm that many suppliers are doing a really good job of working to a higher standard and improving their communication with their clients and their account management programs. Certainly supported with solid service level agreements, KPI’s and a transparent exchange on understanding profit models and the cost related to the services provided. In the end we all need to make money.
Let’s talk about the financial challenges that fleets have been facing.
There are a couple of challenges. It really started in 2008-2009 where the financial shortfall, the cash shortage, hit leasing companies. As a result, we did see that companies were denied the ability to fund their fleets, which is quite a challenge if you have a business partner that you rely on to help you fund your transportation – your mobility requirements. They had to politely say no because they had no funding to back them up themselves. That was a big challenge for some of our clients. It also meant that there was an increase in the cost of money, which was not foreseen. So, their cost for per mile – per kilometer has gone up.
And you saw some leasing companies also increase their margins on the interest rates to capture the risk that they additionally had to charge to be able to pull the money from the marketplace. As a result, some of those relationships had to be reestablished because, as you can imagine, clients were upset when they were denied access to those funds. It also made them rethink their dependence on those suppliers. For some clients it meant that they were reconsidering multi-vendor vs. single vendor relationships and perhaps not putting all their eggs in one basket. Some chose to spread them a bit so if anything like that would happen again, or there might be a change of ownership with the leasing company that might not be to their liking, there was less risk on their overall performance and continuity as a company and their value added to the marketplace.
So, after that money shortage, one of the interesting elements then, of course, was the clear pressure on cost reductions. Now, a benefit of such a struggling economy is that drivers became slightly less mobile. As a result, there is more ability to put pressure on the car policy. Human Resources may be slightly more willing to give in on the extras that are provided on the company car and as a result, we could help clients to be a little bit more stringent or more restrictive on their car policy and be able to create cost improvements and increased driver accountability.
That mobility has not changed a lot. People are still very happy to keep their job where in the past they may have gone to another one for a better company car. The mobility at that level is no longer there. It doesn’t mean they can go overboard with that, but what you see a lot is most of the companies are still maintaining the car level and equipment level, but making a better engine choice with a lower CO2 emission levels, which is extremely important in Europe.
It has brought them significant benefits and especially for those companies that were early adopters; they have been able to bank significant cost savings because they took the biggest benefit from, let’s say, the support that came from the government to reduce the CO2 footprint of the company cars.
What global trends are you noting?
We recently did a study with NAFA on where fleets were putting their priorities at the moment. We see a significant trend where companies started to develop regional coverage in 2005-2006 and bring some of the regional coverage to a global decision-making process on policy, health and safety standards and so on. What we see now is those companies that built regional structures to make decisions on suppliers, supply chains and sourcing programs are now bringing the regional coverage into a global coverage.
In the past a lot of country managers still had to be involved. You see now an increasing number of board members or headquarters sponsor the fleet program and through that sponsorship the implementation of whatever the decision is that the group made is facilitated. Where there might be resistance in a country, it can be overcome by the board sponsorship. That is very important also for the supply chain.
One of the key frustrations still is with OEMs and leasing companies. You work hard with your prospects to do a deal and when the deal is done the implementation doesn’t reach the level of where the expectation was because of local resistance, local relationships, politics within a team, and so on. Increased compliance to the central decision making processes is an improvement because that frustration within the industry has not helped the commitment from suppliers to those clients.
So, now I think we are breaking that negative spiral more and more and we are making this a very positive process where the supply chain sees that the opportunity is truly delivered and our clients, the multinationals, see that the account management programs are improving and that making global deals truly make sense.
Clearly, saving money is vastly important; what other values does FleetVision offer?
Our key value is providing access to our partners and our very rich experience in the industry for decades. Fully understanding where the key topics, the key complications and the key challenges are within this industry. And bringing that overview to a client does not give them the answer because we have to listen to them first.
But after capturing their situation, their priorities, we can translate our experience into a very strong value proposition where we can help them and coach them to achieve their objectives with the opportunities that are available in the marketplace.
Also, we always emphasize the importance of building relationships with their supply chain. So, if we see ourselves in a relationship shape, it is always a triangle. We are there next to the client to support and develop a relationship with the supply chain. We are never in between. Also, we keep our services truly on a strategic level. We are happy to support and help our clients with their supplier relationship management, but we would never go into the transaction part of the business.
Since 2008, Hans Damen has served as Managing Partner of FleetVision. Hans is also Managing Partner for TCOPlus. He started his international career within Fleet Synergy International (FSI) in 1997 as the Regional Sales Director. In 2003, Hans was named CEO of FSI, working to develop the relationships with the multinational clients and prospects whose vehicle needs they served in 31 countries. Hans plays a key role in helping clients understand the various fleet markets around the world, in particular Europe, and in enabling clients to meet their goals for fleet economy and effectiveness.