Lex, Arval and BT Fleet among
lessors focused on downtime management.
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Increasing numbers of lessors and fleet
management companies are offering ways of minimising vehicle
downtime, Leasing Life 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
(€345) to £500 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.
Finding the right
approach
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 co-ordinators to reduce commercial vehicle
downtime.
As soon as Lex is advised that a vehicle is
off the road, a technical support co-ordinator 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.
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.
In-life management
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 out of service, you can’t simply phone up a
hire company asking for a replacement.”
For instance, BT Fleet manages vehicles for
the British Transport Police (BTP) – and Browne says that in a
number of emergencies, where BTP needed all their front-line
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.
“What we try to do is to manage the unplanned
level, which requires good quality management information – looking
at the trends, where the unplanned downtime is taking place and why
it is happening,” he says.
“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’s 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 companies say they can tackle
downtime, but they can provide very little service for more complex
vehicles,” he says.
An increase in
outsourcing
Despite these differences between lessors and
companies specialised primarily on fleet management, one thing that
is common to both, however, is that in both cases 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 doing so.
