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Business services Cost cuttingCreative thinking pays off for cost-conscious fleetsThe need to reduce expenditure has seen organisations adopt a wide range of measuresBy Louise ColeFleets have had to contend with substantial chal­lenges in the past two years. The cost of diesel has risen drastically. The Freight Transport Association's Manager's Guide to Distribu­tion Costs 2011 puts the increase in diesel costs over 12 months at 15.6%. Insurance, component prices and maintenance costs have also climbed at a time when most fleets are facing reduced corporate turnover and tighter budgets.Speedy Asset Services caters for the industrial and construction industries and so took a hit in the recession alongside its major clients. As a result, transport and logistics director Ian Leonard said it downsized its fleet by 29% over the past year to match the group's reduced turnover.Speedy Asset Services now runs 743 company cars, 1,155 LCVs and 138 HGVs. The remaining vehicles also have to be cheaper to run - and the company could no longer justify paying for private car usage in the way it had."Eighteen months ago we removed all fuel cards from company drivers and put them on to a 'pay and reclaim' system," he said. "Fuel cards gave us cheaper prices than forecourts, but it couldn't offset the amount of private fuel usage we had been paying for. We use 10 to 11 million litres of fuel a year and we estimate this saved us £1.2 million. It was a quick win."Withdrawing support for private mileage has also changed the company culture. "It has dramatically reduced people's use of company cars - our train expenditure has gone up, but at least this contrib­utes to employee's quality of life and is environmen­tally friendly. We lease all our vehicles so reducing our contract mileage means we can either offset the credit against debits from the commercial vehi­cles, or we can lower the terms and therefore price of the leases."Speedy Asset Services is currently talking to its insurer and the Royal Society for the Prevention of Accidents about the benefits of driver training. "We are looking at online assessments where those who score poorly or receive a red light get physical training. We are thinking of rolling this out across the fleet," said Leonard. Speedy has also put speed limiters on its vehicles reducing them initially to 70mph and now to 62mph. 'Eighteen months ago we removed all fuel cards from company drivers and put them on a 'pay and reclaim' system. That saved us £1.2 million'Ian Leonard, Speedy Asset Services

Business servicesManufacturer newsFleetprofileFunding methodsNews digestCar Recruitmentreviews"We are still collating the data but we believe this has had a big impact on fuel costs. Most of our vehicles are Ford, and Ford's data suggests a 14% cut in emissions between 70 and 62mph."Gateshead Council also downsized its fleet over the past year, from 450 to 380. Fleet manager Graham Telfer says doubling up vehicle purpose has been a major part of this. "We have dual purposed the meals-on-wheels vehicles to then go out with the borough wardens later in the day and during the night. So they are running 20 hours a day."Telfer also took advantage of the Low Carbon Vehicle Procurement Programme to buy electric Transits, which would have cost £59,000 if the council had had to meet the full conversion costs. "We only had to pay for the cost of a Transit plus a little; our risk was in committing to the technology. But the running costs make it a no-brainer," he said. "It costs us £5 per 30 miles for diesel. It's £2 for 90 miles with an electric vehicle."Telfer has also taken two electric cars, a Mitsubishi iMiev and a Nissan Leaf, into the fleet.Kwik-Fit has taken a different approach to cost-cutting. Rather than downsize its fleet of 200 Mercedes-Benz Sprinters, it has increased produc-tivity for the fleet by 20% through process engi-neering over the past two years.It has focused on better routing, again through process re-engineering rather than specific soft-ware. "We are looking closely at the equipment each van carries which has an impact on fuel economy," said Simon Lucas, oper-ations director for Kwik-Fit Fleet. "Many have to run compressors off the main engine, so there is a lot of idling. The alternative is to run them from an auxiliary engine but this tends to be less efficient. Therefore it's very important that we save fuel through reduced mileage wherever possible."He added: "We have looked at scheduling, having longer leads times for jobs - because the more notice you have, the easier it is to schedule efficiently - and picking up stock in batches for several jobs at once, rather than collecting parts as part of a single assignment. We also speed limit the vans."£2Running cost for an electric Transit to cover 90 miles'We are looking closely at the equipment each van carries which has an impact on economy'Simon Lucas, Kwik-Fit Fleet