Fleet’s mobile future
From the June 2019 print edition
North America’s largest show for fleet professionals, NAFA’s Institute & Expo (I&E), drew a large crowd to Louisville, Kentucky from April 14-18. More than 1,000 fleet practitioners from across the continent gathered to network, peruse the latest services and products, get training, attend education sessions and more. Corporate, government, law enforcement and other fleet professionals were represented at the event.
Thematically, this year’s I&E focused largely on advancing trends within the fleet and automotive world, including autonomous vehicles, impending skills in the field and the future of mobility. This year, the event drew a number of firsts for attendees from the fleet industry. For example, the inaugural I&E “Mobility Day” featured several education sessions built around the theme of moving people and materials more efficiently. Mobility Day, held on the final day of the conference, featured mobility expert Lukas Neckermann’s keynote on major industry trends. The I&E also included the new CAFM U certification study program. Named for the Certified Automotive Fleet Management designation, the university style event helps jumpstart fleet careers through six days of boot camp classes focused on fleet best practices, study tips, networking events and testing. Over 80 participants took part.
This I&E this year also featured the first-ever training track specifically for fleet service and product providers. The track featured six educational sessions including fleet decision-making, customer retention, RFP responses and presentations, service level agreements and more. The 2019 I&E also featured stellar presentations from futurist Chris Riddell, Tom Johnson’s rankings of the 100 Best Fleets of the year, and an all-star fleet management company executive panel.
“This year’s redesigned I&E brought new layers of training and networking to the fleet industry,” said Phillip E. Russo, NAFA’s chief executive officer. “These ‘firsts’ were developed specifically to add more value to the overall I&E experience, and give our industry a broader variety of opportunities to build their industry knowledge and contacts, while advancing in the industry.”
Also new this year was the format of the annual FLEXY Awards, sponsored by Wheels Inc., which honours the achievements of North America’s fleet profession. This year, four fleet professionals received the award during a breakfast panel: Dave Dahn, CAFM, corporate fleet program manager, Erie Insurance Group; Mario Guzman, CAFM, director of support services, City of West Palm Beach, Fla.; and Robert Stine, CAFM, director-fleet management department, Hillsborough County, Fla. The fourth FLEXY winner, Jodi Weber, Americas fleet manager for Johnson Controls International, couldn’t attend. Instead, Adam Orth, CAFM, fleet services manager, General Mills, participated in the panel as a special guest.
Each year, a portion of the event focuses on Canadian issues, and this year’s conference was no exception. Huw Williams, president of Ottawa-based Impact Public Affairs, gave a Canadian legislative update during an education session on the conference’s first day. During the session, Williams discussed trade and automotive tariffs, noting that trade between the US and Canada reached $673 billion in 2017. In fact, Williams noted, Canada is the largest trading partner for many US states. “It’s a pretty big economic impact going forward,” he said.
At the G7 meeting in 2018, US President Donald Trump said he may impose a tariff on auto parts, Williams told the audience. While President Trump was talked down from imposing the tariff, a 25 per cent increase would be “Carmaggedon” for the Canadian fleet industry, he noted. NAFA has let the Canadian government know how big a problem that would be, Williams said.
Williams updated the audience on the federal government’s $435-million program for zero-emission vehicles, noting that the plan covers both electric vehicles and hybrid cars. As part of those plans, the government is investing $300 million over three years in a new federal purchase incentive for eligible zero-emission vehicles. Canadians who buy or lease an eligible battery electric, hydrogen fuel cell or longer-range, plug-in hybrid vehicle, will get an incentive of $5,000. A shorter-range plug-in hybrid will yield a $2,500 incentive.
“It’s good news overall that fleets are going to be able to take advantage of the rebates,” he said.
Meanwhile, British Columbia introduced a zero-emissions vehicle (ZEV) mandate stating that all vehicles must be ZEV by 2040, Williams noted. Quebec also has a mandate in place. Some European countries are doing the same thing, while across Canada there are varying frameworks of readiness regarding how vehicles are powered. If the country went 100 per cent ZEV tomorrow, the hydroelectric grid couldn’t handle the strain, Williams said.
Williams also addressed the country’s new carbon tax, which he said had launched in Ontario, Manitoba, Saskatchewan and New Brunswick. The tax increases gas prices by 4.4 cents, going up to 11 cents in 2022, he said, but the federal government plans to provide a rebate directly to people in these provinces to offset the fuel price increase. Revenue from the carbon tax will also go to fund green energy programs. At the same time, Williams said, there has been political pushback among some provinces and the Ontario and Saskatchewan governments are taking Ottawa to court over the new tax.
“This is an issue that’s highly political depending on where you are in the country,” he noted.
Williams also addressed Canada’s legalization of cannabis, which remains an emerging issue for Canadian fleet operators. Currently, only smokable cannabis products are legal and people are struggling with the rules surrounding the drug. While some organizations don’t want to jump into making cannabis policy just yet, others are, Williams noted. The West Vancouver Police Department is an example—the department’s policy states that while officers must show up for work unimpaired, they can consume cannabis up to 24 hours before beginning work. While they won’t be subjected to random drug testing, they will be asked to take a drug test if their supervisor believes they are under the influence.
NAFA plans to watch the impaired driving portion of the cannabis policy debate and will keep members updated, Williams said.
Fleet and procurement
The close relationship between procurement and fleet management continues in many organizations, and another education session—entitled How Fleet Management Links With Procurement—at the conference highlighted that relationship. Over the past 10 years, it’s been common to see fleet employees leave an organization and not be replaced, said David Hayward, regional manager, fleet operations at Herc Rentals. Or, he added, organizations sometimes move the fleet function to procurement. While not ideal, this situation can work to realize savings and help manage the fleet, he noted.
In the past, Hayward said, he’d have a procurement manager assigned to their account. But that manager often didn’t know about fleet and Hayward would have to teach him, he said. The manager would perform the RFP and then move on. But that began to change with the introduction of category management.
It helps when fleet managers know with whom they’re dealing within the procurement department, said fellow panelist Jim Barnes, managing director at the Institute for Supply Management (ISM). A complaint he hears often about procurement professionals is that they tend to be overly tactical, Barnes noted. But they’re often more strategic once they learn more about the category they’re dealing with. Barnes also cited an in-progress study by ISM that showed 19 per cent of fleet managers felt that procurement dealt with them in a tactical manner, while 26 per cent said procurement dealt with them in a strategic manner.
An older style of purchasing would not have encouraged much consultation with fleet managers to ensure that the organization’s needs were being met, said Hayward. Fortunately, that kind of consultation often takes place now. As well, while supporting the RFP and purchasing process, procurement also ensures that fiscal responsibilities are met. Other stakeholders involved in the process include drivers, the legal department, risk management, HR and the health and safety department, he said.
In discussing procurement’s involvement with fleet, Barnes again referenced the ISM survey. When asked the degree to which procurement selects fleet suppliers, 32 per cent said that they don’t select them. Meanwhile, 27 per cent said procurement selects some suppliers, while 24 per cent said they select most suppliers. As well, 17 per cent said the department selects all suppliers.
The best relationship between fleet management and procurement is a collaborative one, Hayward said, in which procurement is involved throughout the fleet program in partnership with the fleet manager. The reality can be different, he added, in which the fleet manager can end up absorbed into the procurement department. “It works, but it’s not ideal,” he said.
At its essence, Hayward stressed, the relationship between procurement and fleet management should be a partnership. “If you go in with an adversarial attitude you won’t be successful,” he said.
As in the past, NAFA’s I&E this year featured a panel of leaders of fleet management companies discuss what they see coming in the future for the field. Recently, fleet touches many areas of an organization, said panelist Dan Frank, president and CEO of Wheel Inc. As mobility and technology evolve, fleet will touch other areas as well, he said. During the 2008 financial crisis, fleets focused largely on cost, Frank noted. But fleets can impact an organization’s revenue side as well. Work to translate fleet operations into business value by becoming more productivity and revenue driven, he advised, rather than focusing on savings alone.
When asked about what skills their companies are recruiting for, Donlen’s president, Tom Callahan, said that a key attribute—especially when fleet isn’t well understood—is the ability to write and promote a business case. It’s also useful to learn process tools, although he warned not to overemphasize such tools. “Six Sigma can take on a life of its own,” he said.
Be comfortable with ambiguity, he advised, and have the confidence to make judgement calls with limited information. As well, the ability to bear bad news at appropriate times is useful.
For fleet managers to make the best possible internal case for their departments, Element Fleet Management’s CEO Jay Forbes encouraged them to promote their strategic relevance. Let the organization know what the fleet department is doing to impact safety, sustainability, cost control and other areas.
Addressing the role of technology in their industries, ARI president Bob White said that fleet management companies are, in a sense, also tech companies. But there’s been a shift in the way innovation affects technology in the business-to-business world, White noted. People now expect the same technology experience in business as they get in the consumer world. Expectations surrounding service have also changed due to online shopping giant Amazon, ride-hailing and other innovations, he said, and the fleet industry must learn to adapt.
At the same time, expectations from drivers have changed, said Matt Dyer, president and CEO of LeasePlan USA. Fleet companies must support drivers in terms of safety, technology adoption and other areas. Rising accident rates, distracted driving and other topics are growing concerns, so fleet management companies must use data in addressing these areas. “This all defines how we are serving our customers,” he said.
Several education sessions at the conference offered a look at trends shaping the future of fleet management and mobility alike. In one such session, entitled Can Level 4 Autonomous Vehicles Work for your Organization Today?, Tim Schock of autonomous shuttles company Navya, noted that the organization already had 115 vehicles in operation around the world. Use cases include theme parks, healthcare facilities, airports and industrial sites. “This is here,” he told the audience.
Schock also described Navya’s shuttle, which is a low-speed 11-seater vehicle suited in high density areas. He noted the unique look of the vehicle, which he credited to the company’s desire not to be a transportation option of last resort.
And while the vehicles haven’t deployed on city streets without a driver or attendant, that’s due to regulations, Schock said. An attendant is present as an extra layer of safety, and while Navya’s vehicle doesn’t have pedals or a steering wheel, the driver can still take control of the vehicle if necessary. The vehicles use a closed system that doesn’t allow remote control due to cybersecurity concerns, Schock said.
When asked about the general applications for such vehicles, Chris Keefe, VP of Autonomous Programs at Ottawa-based Aurrigo, noted that dense areas offer an easier way to move people around. Such vehicles can be implemented in many ways, for example creating a way to get around for people with mobility issues. Keefe described a four-seat vehicle that Aurrigo produces, although he stressed that the company has branched out since it’s been in the field for so long.
As always, NAFA’s Institute & Expo offered a diverse source of insights and best practices on how to deal with the issues that fleet managers face today, along with the myriad challenges they are likely to face going forward.
The conference returns April 6-8 2020 in Indianapolis, Ind. FM/SP