By Janice Sutton
In this wide-ranging interview, we asked Stuart Donnelly, International Sales Director at Fleet Logistics International, to bring us up to date on the company and tell us what he is seeing in today’s global fleet arena.
Independent of banks, leasing companies or manufacturers, and operating in 47 countries and managing nearly 200,000 vehicles, Fleet Logistics is Europe’s largest fleet management company.
The company has experienced significant growth in the past five years, partly because of some strategic acquisitions. And they are on the move; last year, Fleet Logistics opened an Asia-Pacific hub in Singapore, and has most recently begun operations in Sao Paolo.
When we interviewed Stuart in Birmingham, England, the UK Brexit vote was a just few weeks away. Since this historic vote we followed up with him to get his thoughts on the impact of the UK’s vote to leave the European Union. Hint: he is very optimistic!
Stuart, first, please give us some background on Fleet Logistics.
Fleet Logistics was established back in 1996, but in the last five years, especially since the acquisition by TÜV SÜD, the business really has changed significantly. It has doubled in size. The product, the portfolio, the footprint has dramatically changed, improved, and as a result that has supported the growth of the business.
One of the key advantages that TÜV SÜD has brought in the last twelve months was the acquisition of TCO Plus and Fleet Vision to complement the business unit where Fleet Logistics sits in the TUV Group, which is called the Business Unit Fleet. We call it the trinity — the three businesses specializing in the consulting, reporting and execution of fleet management.
Fleet Logistics now is a company which operates in more than 47 countries worldwide; managing close to 200,000 vehicles on behalf of its customers and effectively providing global coverage for those countries.
Give us a sense of your global footprint.
Historically, Fleet Logistics was dominant in Europe, but we now are physically present across all of Western and Eastern Europe, primarily from our own offices. Fleet Logistics would not operate a policy of partners and even the partners that we do have are effectively franchise partners operating with the same IT tools as our core company.
In the last twelve months we have effectively expanded that boundary and we started up in the Asia-Pacific region. We have a hub in Singapore where we are managing approximately eleven countries on behalf of our first customer there, covering around 2,000 vehicles.
We are now investigating with a number of our international customers about how we can support them in other markets and are looking at how we could potentially expand their business into the local markets of Japan and Indonesia where there are some significantly large fleets.
Outside of Asia-Pacific, we just started up a hub from Sao Paulo in order to serve the Latin American fleet market. There are different levels of maturity there as well as in Asia-Pacific and really a lot of what we learned from establishing the business in Asia-Pacific we will effectively incorporate into Latin America.
The other piece of the jigsaw, if you like, in order to create the four corners of the globe, is North America. North America is a very mature market. Our intention is not to step into the North American market operationally, but effectively having representation there enables us to support our international customers with their fleets in North America as part of a global fleet strategy.
But I repeat, our intention is not to establish an operational presence in North America — it doesn’t make sense.
What is the unique value proposition that Fleet Logistics offers its global clients?
Fleet Logistics is an entirely independent company. It is not linked or connected to any banks or leasing companies, the car manufacturers or any of the supply chain. So, effectively, Fleet Logistics is representing its clients and acting as an extension of their organization to professionalize the function of fleet management, both internally within their organization and externally with the supply chain.
First, we support them in evaluating their “as is” position, then create a set of recommendations for how they can optimize that to get the execution piece that will help them to manage their fleet program. And then completing the circle, coming back to the strategic piece, it is about continual re-evaluation and optimization and improvement of the program.
Our goal is to try and assist our clients in achieving that target of having a global partner to help them to get their hands around the entire fleet value chain. So, the car manufacturers, the leasing companies, the fuel providers, are just three components which you can globalize or regionalize on a global level.
As most of us are witnessing, companies are centralizing more of the decisions but then making a requisite on a small number of people to be able to manage the program globally. In order to do that you need two things: you need transparency and the data – where to get the data and how to consolidate it into one place.
So, we have with TCOPlus, our independent sister company in our group, the Fleetcube global reporting tool.
How does Fleet Logistics set itself apart from its competitors?
We give our global clients the capabilities to get their arms around their fleet, to give them transparency and to serve them around the globe. The advantage that we bring to our customers is that there is nobody else in the market that is able to deliver that solution to their customers.
There are local companies in the European market which offer similar propositions to Fleet Logistics, but no one that is able to do that on a truly global basis. So, we really believe we are number one in the market and we intend, through continuing to develop new and innovative ideas, to remain the number one.
The market maturity piece of our service proposition is a critical point. I talked earlier about how we help clients to evaluate their “as is” scenario to develop opportunities to help optimize their fleet. In most cases we are supporting the clients in an outsourced environment so we are effectively building the future scenario, the future state, the ”to be”. We, together with the fleet supply chain, are supporting the overall process. The key is to respect the maturity of the different markets.
When I was in Asia-Pacific last year it was quite interesting because having spent 20 years in this market I wasn’t going to Asia-Pacific with the idea that I had a magic wand and I could magically optimize and change the client’s fleet. But simply by using my 20 years’ experience in this industry I was able to go there and analyze the client’s data, the supply chain, the car policies, and with that come up with a set of recommendations.
It is the same philosophy that we are now embarking on in Latin America where we are taking our knowledge of those mature fleet markets and utilizing that knowledge and experience in order to benefit our customers.
Let’s take a look ahead; what do you see trending in the global marketplace?
In Europe, mobility management is growing at a great pace. The Netherlands is really the most advanced area of the market. We have customers where they have a mobility budget of say €1000. They then have the ability to choose a car, a motorbike, a bicycle or even a rail ticket. So, I may decide that normally I spend €750 on my Passat, €250 on my fuel, but in the future I am actually going to take €400 and have a Golf and then I am going to have a bike as well. Then I am going to use a rail ticket and then my partner could use the Golf while I use the rail ticket.
In my personal opinion, it is still in its infancy because the infrastructure in a country needs to be sufficient to support that, but there are various advantages with an integrated mobility scheme. It provides more flexibility for the user to be able to make their own decisions about how they spend their money. But it’s an interesting development.
But there are many other areas of development if you look around the globe. There is the whole autonomous car topic which I think will take more than my lifetime to become mainstream.
I think the area where I see the biggest element of development in the industry, which I am quite excited about, is the whole driver behavioral topic — helping people to better understand how they are driving. That means their fuel consumption, their steering, braking, cornering, so that rather than hitting people with a stick and trying to optimize those topics, you can have a personal dashboard which then eliminates the issue of data privacy where you are able to see how you are performing.
There are a lot of people who would then be conscientious and think, how can I improve my performance? Maybe create some form of incentive scheme where if you improve your overall performance which reduces your spend level on accidents, on fuel, then you might get some money back, for example.
How do you think Brexit will impact your business?
While it is still very early to contemplate the real impact on the UK economy and then the consequent effect within the fleet industry and what that then means to Fleet Logistics, if people defer hiring and investments we will talk ourselves into a downturn. And while that will be alarming, I must say that the effect on our business from 2008/09 following the financial crisis and the recession that followed was the springboard for our tremendous growth. In the years between 2008/9, we grew by 400 percent.
So while there will be threats and opportunities, we will have to assess and navigate along the way.
If corporations act in the same way they did during the recession and push ahead with many of the optimization programs in consideration; i.e., mobility, EVs/hybrids, globalization, etc., I believe Brexit can be a good thing for Fleet Logistics International.