Lex, Arval and BT Fleet among
the lessors focused on keeping vehicles on the road.
Go deeper with GlobalData
Increasing numbers of lessors and fleet
management companies are offering ways of minimising vehicle
downtime, Motor Finance research has revealed.
Most are doing so as it improves their chances of
being selected as a fleet leasing provider.
When a vehicle is off-road – either for routine
servicing or for unscheduled repairs – it will cost companies
hundreds of pounds as a result of lost revenues, failure to meet
delivery objectives and contract penalties.
According to Tony Grove, LCV manager at leasing and
fleet management company Arval, having a van sitting in a
dealership having its service done can cost anything between
£300-£500 (€354-€591) a day.
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By GlobalDataBut there are also more extreme cases, where one
vehicle off the road is costing a customer £1,000 a day, according
to fleet management specialist BT Fleet.
Because of such differences, there is not a
one-size-fits-all approach. For example, downtime is hardly
relevant for cars, but it is hugely relevant for some types of
commercial vehicle fleets.
Grove says: “With a car, you can go and hire
another one. With vans, they often do particular jobs, they have
got all the equipment, and getting an identical van is very
difficult.”
Arval has a fleet of 20,000 vans, 9,000 of which
are currently on contracts that include downtime.
The company has a specialist ‘downtime team’ at
Arval’s technical centre in Birmingham, whose sole job is to manage
vehicles during downtime.
Like Arval, Lex has created a dedicated team of
technical support coordinators to reduce commercial vehicle
downtime.
As soon as Lex is advised that a vehicle is off the
road, a technical support coordinator will manage the downtime and
keep the customer updated – in order to get the vehicle back on the
road as soon as possible.
Grove believes that, in general, leasing companies
can do a lot to minimise downtime.
Planning crucial
One thing that Arval does well, according to Grove,
is to help customers plan the routine servicing activity.
“This means planning the servicing when the
drivers are having training days, team meetings, are on holiday or,
in general, during out of hours,” he says.
To ensure that the work is done properly and as
quickly as possible, Arval has agreements with maintenance and
repair companies.
Grove says: “We measure the quality work those
people do and make sure they are keeping up to the right standards.
We do follow it through to make sure it is all working, because
ultimately we own the vehicle, and want it to be serviced
correctly.”
However, there are also more complex situations,
where it is not just a matter of reducing costs, but where having
the vehicle available all the time is crucial.
In that case, says Paul Browne, head of sales
at BT Fleet, the skills and expertise of a fleet management company
are essential.
BT Fleet is primarily involved in the fleet
management of commercial vehicles. The company does not offer
funding as it specifically focuses on the in-life management of
fleets.
Browne explains: “We often look after fleets that
are mission-critical, because that is in line with our core
capability. If you are operating a vehicle that is so specialist
and that vehicle goes down, you can’t simply phone up a hire
company asking for a replacement.”
For instance, BT Fleet looks after the vehicles for
the British Transport Police (BTP) – and Browne says that in a
number of emergencies, where BTP needed all their frontline
vehicles available to respond, BT Fleet was able to prioritise the
downtime management, so that BTP could respond to those emergencies
quickly.
The target market for BT Fleet is the utility
sector – with a customer base that includes the likes of National
Grid, E.ON, EDF Energy, Scottish Water, Thames Water, and South
West Water.
“The more non-standard the vehicle is and the more
complex the operation, the more likely downtime is going to figure
in the decision making of a firm,” Browne says.
Apart from looking after ‘mission-critical’
vehicles, for Browne another key difference with leasing companies
is in managing unplanned downtime.
He says: “What we try to do is to manage the
unplanned level, which requires a good quality of management
information – looking at the trends, where the unplanned downtime
is taking place and why it is happening.”
Browne adds: “Unplanned work will happen, and it’s
key that you are able to respond to that.
“Having our own garage network helps, because we
can control the resources, it also means we have a range of tasks
and can defer less critical jobs, so that we can put the
emergencies to the front of the queue.”
According to Browne, most BT Fleet customers
separate the funding of the asset from the management service
provider.
He says: “One may find that the best funder is not
the best service provider for that particular vehicle type. That is
why we leave the funding to those that are more experts than us,
and focus on the fleet management service.”
BT Fleet’s point of strength, says Browne, is
having its own garage network to accommodate the more complex
vehicles.
“Lots of leasing companies say they can tackle
downtime, but they can provide very little service for more complex
vehicles,” he says.
Despite these differences between lessors and
companies specialised primarily on fleet management, one thing that
is common to both, however, is that customers increasingly
outsource downtime to their leasing or fleet provider.
As Browne puts it: “Some customers will be always
happy to pay for the cost of this additional service, because the
alternative cost [losing revenue or leasing more vehicles than
needed] would be higher for them.
“It is just a question of how to achieve the
best planning, and how lessors and fleet management companies can
help in it.”
