22 October 2020
Paul Hollick, Chair of the Association of Fleet Professionals, on the challenge fleet managers have faced in the past six months, and new training and planning it is launching to help business cope in future.
What are the biggest challenges for fleet managers in the next six months?
From a purely fleet perspective, the most topical issues we’re facing at the moment is electrification.
The pandemic has created a roadmap whereby employees may do less miles and less business trips and so electric vehicles in their various forms become the better option.
With the new low BIK rates there are increased levels of demand, drivers are becoming far more receptive the cars and businesses are pushing on with EV adoption quicker than I ever imagined they would.
Crucially, there is a new generation of cars that have acceptable range for most drivers, and so for the right vehicles there is now a demonstrable usage model. Where fleet managers are playing a crucial role is in ensuring drivers and operations are assessed properly so the right model is applied.
That means using the proper analytics though to really understand what vehicles are needed and how they are being used, and getting good, clear advice on tax and the other elements of EV use, such as charging
The other major challenge is, not surprisingly, Covid 19. We’re still seeing issues with BIK, where employees have cars sitting on driveways and want to hand the keys back to avoid paying tax. The Government’s advice on this early in the crisis, that in order to avoid BIK tax, you could just post your keys back to your employers, didn’t help.
On top of this is a wider strategic challenge around right-sizing businesses. They’re having to be involved in lots of conversations about how companies are structured post-covid, employee numbers and redundancies, furloughs and future sustainability.
So, for many fleet managers, it’s about making sure they are adding value to their business and helping them negotiate these extremely difficult times and come out the other side.
How is Covid 19 changing working practices and the role of the fleet manager?
Much of it has stayed the same, in that it’s about working through practical and logistical problems, as it has always been, albeit the problems are new ones.
But it’s the planning and medium term element that is changing. We’ve already talked about electrification, but it is in areas such as HR, and aligning with what they are doing and their policies that are shifting. How do you get the job done with fewer employees, or more employees working from home, and less resources and reducing overhead costs?
Then there are issues such as employee mental health and defining what is a business trip now so drivers understand what they can claim. We’re not going to see many offices open this side of Christmas, so communicating remotely with drivers is going to be a major part of the role. Those are the challenges fleet managers are faced with.
Other parts of the role that were increasing in importance have been side-lined, such as the adoption of mobility solutions. Sadly until there is a cure or vaccine, there seems limited appetite for these new ways of travelling. As such, in terms of overall business miles, they have remained relatively high, as employees stick to their cars and avoid shared public transport where possible.
Are the ongoing Brexit negotiations having any impact?
Everybody is brushing it under the carpet, but if the Government doesn’t get its act together, in terms of part and supply, there could be real issues. We rely very heavily on a few countries, for this and if a deal isn’t in place, costs could rise markedly, and availability could fall.
What are the main issues AFP is currently campaigning about?
Now that ACFO and the ICFM have been fully merged, the committees have started in earnest, and in the coming months we’ll be producing a huge amount of information and training on post-Covid 19 fleet planning, electrification education and best practice and advice on managing grey fleet robustly. We’ve got 45 fleet managers together on our five committees, they are the best of the best in our opinion and are with us to help us frame all of this. We’ll be pushing this out in the next few months.
The AFP will also be releasing our views on the current AER rate, and we’re lobbying HMRC to give some clarity on the BIK rates post-2024/25. It’s important now that we know what BIK looks like for the second half of the decade so that businesses can plan their procurement strategies.
While quite rightly there is a lot of focus on what is going on right now, it’s still important to plan ahead for when we are through this pandemic, and we are taking on some of these issues on behalf of our members, so they have all the tools they need to move forward.