SHzoom’s Monthly Minute
Fleet Policy is Your Fleet’s DNA
Volume 1 Issue 2 | This article was originally published by Mike Antich on Global Fleet Management
Best-in-class fleet management all have one thing in common – their fleet policy does not remain static. It is a living document that is updated as new needs arise. Each fleet has a DNA of sorts, which is comprised of the procedures and regulations that are codified in its corporate fleet policy. It is these policies that determine the type of fleet that is operated and its characteristics. Think about it. By creating policy, such as who is eligible to operate a company vehicle, you are, in effect, determining the size of your fleet. In my experience the best-managed fleets tend to be those that adhere to a written fleet policy. It is important that fleet policy is up-to-date and reflects a company’s overall business strategy.
A Fleet Policy Must be a Living Document
A fleet policy should not remain static. It must be a living document that is updated as new needs arise. A fleet policy must be constantly reviewed to ensure it does not become out of date due to changing business conditions, which can leave a company vulnerable to potential risk exposure. In order to stay on top of changes in your business environment and advancements in business practices, regularly review fleet policy to keep it current. Sometimes changes are unanticipated and beyond our control as evidenced by the COVID-19 pandemic, which is initially requiring temporary modifications to procedures that may later become institutionalized as formal fleet policy. This is nothing new.
Historically, fleets have been proactive in updating fleet policy to reflect changes in their business environments. For instance, when use of hand-held cell-phones while driving first emerged as a distracted driving issue, fleets incorporated prohibitions in fleet policy. When texting while driving emerged, its prohibition was also codified in fleet policy. Similarly, as more states began to legalize the use of medicinal and recreational marijuana, many fleets proactively incorporated policies addressing this issue.
Does your corporate culture encourage compliance with fleet policy? It should because fleet policy is a crucial component of a company’s overall cost-control strategy. In my discussions with fleet management companies over the years, they tell me that the best managed fleets tend to be those that adhere to a written fleet policy. It is these procedures and regulations that determine the type of fleet each of us operate and its characteristics. For instance, by creating policy such as who is eligible for a company vehicle, you are, in effect, determining the size of your fleet.
It is very expensive to operate a company-provided fleet. Typically, fleet is one of the top five categories of non-product-related spending at most corporations. All too often, however, managers attempt to control fleet costs on the backend. The best time to control cost is before it occurs and the way to do this is through establishing policies and procedures that inhibit unnecessary spending and protect corporate assets. By establishing fleet policies up-front for expense control, and by making a concerted effort to ensure these policies are uppermost in the minds of your drivers, you will reap substantial cost savings. Fleet policy institutionalizes the mechanisms to curb money-wasting behaviors.
A fleet policy must not “sit on a shelf.” It is your responsibility to communicate policy to your drivers and, just as importantly, to their managers. Each driver should know the rules governing the use of a company vehicle and what actions will be taken for non-compliance. A common problem is that the fleet manager communicates policy to the drivers’ managers, but word doesn’t get down to the individual drivers. To avoid this problem, many companies teach policies and procedures regarding the use of company vehicles as part of the new-employee orientation and provide online access to fleet policy. Another recommendation is to set aside time at company meetings to make fleet policy presentations to drivers and managers. For drivers who work at regional offices, hold periodic videoconferences or webinars.
Developing Fleet Policy is a Collaborative Effort
When developing or re-evaluating fleet policy, there are many issues that must be addressed, and these issues can vary by company. As such, you should solicit the participation of all affected departments, such as procurement; environmental, health and safety (EHS); risk management, and human resources, in addition to vehicle user groups such as sales and operations.
Consider creating a driver focus group, with rotating members, and hold periodic meetings to solicit feedback on the fleet program. As part of your annual fleet policy review, you should survey your drivers to give them an opportunity to express their opinions or dissatisfaction about fleet policies that govern them. To gain the participation and support of the drivers, you also have to get the support of their management.
By involving all of these stakeholders in the decision-making process, it increases the likelihood of buy-in and support of policies. It is also important to solicit this involvement to ensure the policy is comprehensive and to ensure important components are not inadvertently omitted. Once you have updated fleet policy it is important to send it out as a draft to all stakeholders for review. Not only do fleet policies bring structure to the way you lead your fleet and manage your vehicle assets; they also serve as a reference source for drivers and their managers to consult when a question needs a quick answer.