2015 was a big year for fleet. From autonomous cars hitting Australian shores to the sad news that manufacturers Holden, Ford and Toyota would soon be ceasing local operations, the industry has experienced a period of significant change.
IPWEA spoke to a panel of fleet experts about the trends, opportunities and challenges they believe will be down the road in 2016.
Managing costs
Predictably, keeping the budget in the black will continue to dominate local government fleet management, Dubbo City Council Manager, Fleet Management Services Steve Colliver says.
“The pressures to save money from year to year are persistent,” Colliver says.
“In NSW we are experiencing Fit for the Future, which will bring additional financial pressures. This will see councils extending ownership life cycles on light vehicles and plant, in an attempt to reduce whole of life costs.
“Planning for these extended life-cycles is critical, particularly for in-house servicing – the correct training, tooling etc will be vital, as the longer life-cycles will bring additional maintenance requirements and downtime factors.”
Colliver points to the upcoming NSW council amalgamations as something with the potential to shape the fleet industry throughout the state.
“The impending amalgamations in NSW brings considerable challenges,” he says. “Hopefully, decisions made by fleet managers in the past regarding systems and capacity have been with future growth in mind, and a reasonably seamless transition can be made if and when these amalgamations take place.”
Uniqco Group of Companies Managing Director Grant Andrews agrees, saying local government fleet teams will continue to tighten their belts, particularly those subject to rate capping.
“With the focus on costs, the financial teams are looking for every dollar of savings – plant and fleet are going to be in the spotlight to make savings,” he says.
Andrews says organisations need to re-think who is given a light fleet vehicle, and how long those vehicles are retained.
“I think for too long senior managers in local government have seen that a new car is a justified perk of the job,” he says. “But the cost of renewing executive cars every couple of years is prohibitive and the elected members are soon going to put pressure on organisations to change this.
“The innovations on new cars and the pricing structure being highly competitive has had a significant impact on the resale value of cars. The large drop in resale means owners have to hold on to their cars for longer to lessen the impact of high depreciation in the first couple of years.”
Continued drive for improved efficiency
4C Management Solutions Director Robert Wilson says a drive for improved efficiency will continue at both the administration and operational levels, and may result in the need to up-skill employees.
“At the administration level, organisations will continue to restructure their fleet operations to provide more efficient organisational arrangement leading to rationalisation of roles and responsibilities, and in some cases outsourcing,” Wilson says.
“This can change the skills set those managing the fleet may require. For example, if certain fleet functions move from a fleet department to the purchasing department, those involved may well need to learn fleet related skills. Similarly, if a fleet operation is outsourced, the organisation’s fleet staff may need to develop skills in contract management.
“At an operational level, the drive for improved efficiency will focus on doing more with less and a number of trends and technologies will support this.
“IVMS/GPS based systems support better utilisation of the fleet, potentially enabling reduction in fleet size. Ownership and operating costs will continue to be under scrutiny with a view to reducing whole of life operating costs.”
This was originally published in IPWEA intouch newsletter in January 2016.
Part two will be published next week.
