Q: We employ an in-house fleet manager, why do we need an external manager?
A: A salaried internal fleet manager can be an expensive option when the salary and normal employment add-ons are accounted for. Furthermore, even the most competent internal fleet manager is micro managing - without the benchmarking tools available to an external manager. Fleet management is not rocket science but to ensure optimum cost-effectiveness you need to be "in the market" constantly and have the buying strength of a large fleet behind you.

Competent external fleet management integrates the running and administration of a vehicle fleet through a single external point. This can be achieved at a much lower unit cost than can be done internally. Typically, management fees vary between $180-$200 per vehicle, per annum.

External fleet managers already running 10,000+ vehicles will have the in-house expertise and "grunt" to keep constant downward pressure on vehicle expenses. Such pressure easily covers the monthly fee alone by preventing unnecessary repair and maintenance payments. Add to that the release of council staff for more appropriate core business activities and the fee starts looking like a pretty good deal.

Q: Why don't we use a lease company to provide funding and management in one package?
A: Leasing is rarely an option for councils. The tax advantages of leasing do not apply. Besides, councils have access to funds at cheaper rates than would be available from the lease company. Also, lease term restrictions do not suit the need to run typically low mileage commercial vehicles (utes, trucks, vans) for the most cost effective usage period.

In the past councils have turned to leasing as a way to have the fleet managed externally. However with the advent of independent (i.e. not involved in vehicle funding) fleet management providers, councils can now retain ownership of the fleet and have cost effective external management.

Q: Will we lose control of the fleet by outsourcing management?
A: No, actually you will be more in control. External fee based management is typically a very transparent process with all costs visible, passing through to the council only as they arise and after having been checked for necessity and best in market pricing.

All fleet related costs, including fuel, are consolidated on a single monthly invoice for ease of accounting and analysing. Account delivery can be tailored to an individual council's requirements in respect of cost centre and GL coding, for example.

Robust external fleet management can give councils the certainty that their fleet is being run as cost effectively as possible.

Q: How can we be sure fleet costs are as low as practicably possible?
A: Since a large external fleet manager is managing the costs of many thousands of vehicles day in, day out they will be in a strong position to benchmark a council's fleet costs against best pricing from across the whole market. Repair and maintenance costs are paid only after having been pre-authorised by fleet controllers. Ideally, they should be A-grade auto technicians in order to know what work is necessary and what is the right price for that work.

Also the fleet management company's buying power and economies of scale savings become available to the council.

Q: Will external fleet management cover everything to do with the fleet?
A: An ideal fleet manager will cover fleet whole of life costs i.e.
    . Total Cost of Ownership [TCO] analyses for vehicle suitability.
    . Vehicle and plant purchase.
    . Repair and maintenance management.
    . Compliance administration, RUCs, re-licensing, etc.
    . Accident repair and traffic infringement administration.
    . 24 hr accident and breakdown service.
    . Vehicle disposal.
    . Fuel management.
    . Invoicing and management reporting.
    . Advise on vehicle policy, OSH, ecological and environmental matters.

Q: How much will it cost?
A: Typically, FleetSmart charges $15 - $20 excl. per vehicle, per month depending on the class of vehicle, for the full service level. There can also be a small per event administration charge for the issuance of RUCs and re-licence labels.

For further information, please call Christopher Young at FleetSmart on 0800 727 863.