The best-managed fleets are typically operated by companies whose drivers adhere to a documented fleet policy. Invariably, these organizations are also best-in-class in operating the most cost-effective fleets. Why? Because a fleet policy institutionalizes the mechanism to curb money-wasting behaviors. But in order for fleet policy to be successful, it requires driver compliance. This is reinforced in my discussions with fleet management companies who tell me that the best managed fleets among their clients are those that adhere to a documented fleet policy. Their corporate culture encourages compliance with fleet policy as a crucial component of their overall cost-control strategy.
It is very expensive to operate a company-provided fleet. Typically, fleet is one of the top five categories of non-product-related spending at most corporations. All too often, however, managers attempt to control fleet costs on the backend when the best time to control cost is before it occurs by establishing policies and procedures that inhibit unnecessary spending and protect corporate assets. By establishing fleet policies up front for expense control—and by making a concerted effort to ensure these policies are uppermost in the minds of your drivers—you will reap substantial cost savings.
A fleet policy must not “sit on a shelf.” It is your responsibility to communicate policy to your drivers and, just as importantly, to their managers. Each driver should know the rules governing the use of a company vehicle and what actions will be taken for non-compliance. To avoid this problem, many companies teach policies and procedures regarding the use of company vehicles as part of the new-employee orientation or at annual sales meetings if the vehicle is assigned to a sales associate. The first thing fleet professionals must do when introducing new employees to the fleet policy is set their expectations by defining the purpose of the fleet policy. The purpose of a fleet policy is to provide guidance to drivers regarding the proper use of the company vehicle, outlining what is expected of them, outlining policies and procedures, and defining consequences for not adhering to policies
Control Cost Before It Occurs
By establishing fleet policies up front for expense control and by making a concerted effort to ensure they are uppermost in the minds of your drivers, you will reap substantial cost savings. It is the fleet manager’s responsibility to communicate fleet policy to drivers. Again, common sense tells us that the best time to control cost is before it occurs, and the best way to do this is by establishing policies and procedures that inhibit unnecessary spending. The overwhelming majority of drivers want to do what’s right for the company. Help drivers by communicating information about cost-saving techniques, such as maintenance and fuel savings practices. Just because your company implements a documented fleet policy, however, it doesn't mean it is followed. A common problem is that the fleet manager communicates policy to the drivers’ managers, but the word doesn’t get down to the individual drivers.
The Danger of Policy Exceptions
The procedures and regulations of fleet policy determine the type of fleet each of us operates and its characteristics. For instance, by creating a policy such as who is eligible for a company vehicle, you are, in effect, determining the size of your fleet.
A fleet manager must have the authority and backing of senior management to address a driver’s inability to properly operate and maintain an assigned vehicle. When dealing with driver-related problems, you shouldn’t create a new problem in the course of resolving one. The surest way to do so is to make an exception to your vehicle usage policy. Do not set a precedent by allowing exceptions. It is critical that you make sure all drivers uniformly adhere to company fleet policy. There should be no exceptions to your company vehicle policies; otherwise, you run the risk the liability of negligent entrustment or negligent retention.
Your fleet policy should be a living document updated annually. As changes occur within your company, revise your procedures to reflect these changes. Likewise, eliminate outdated policies. What was right yesterday may not be right today. Also, as part of your annual fleet policy review, survey your drivers to give them an opportunity to express their opinions. Every affected department should be involved in the process of creating fleet policy. When developing or re-evaluating fleet policy, solicit the participation of all affected departments, such as sales, operations, procurement, human resources, and risk management, along with all vehicle user groups. By involving them in the decision-making process, you will increase the likelihood of their buy-in and support of fleet policies. It is important to stress that the fleet manager should manage the policy creation process.
No policy can anticipate all possibilities, but consistency in dealing with all the drivers assigned company vehicles at different locations is essential. To accomplish this, it is crucial for senior management to give the fleet manager the appropriate authority to address noncompliance by drivers and those departments’ assigned vehicles. It is a fleet manager’s job to avoid exceptions.
Let me know what you think.
Originally posted on Automotive Fleet
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