Driving Business - Spring 2014

DRIVING

Issue 7 Spring 2014 £4.50

Helping you make better decisions

CUT FUEL BILLS Save money and admin time by choosing the right fuel payment method

DB INTERVIEW Richard Harden on why a strong brand is vital to his restaurant guides

SAVE MONEY GOING A TO B A cost-effective route to better journey management

❚ Why SMEs may be losing £30k a year due to vehicle downtime ❚ Full-size Ford Transit is bigger and cheaper to run

Contents 

FRONT END

6

The cost of downtime UK SMEs may be losing £30,000 a year as a result of vehicle downtime

ISSUE 7 Spring 2014

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Richard Harden

8 Opinion Businesses seeking to cut fuel bills should consider fuel cards, electric vehicles and engine downsizing

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STRATEGY & FUNDING

12 Fuel payment options

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Is your business using the most cost-effective method to buy fuel?

BROADER VIEW

14 The DB interview Richard Harden on why brand is vital to his restaurant guide business



JOURNEY MANAGEMENT

20 Choosing the right vehicle Analyse your business’s needs to avoid overspending on cars and vans

23 Is telematics right for you?

Tracking how your vehicles are driven can cut costs and increase safety

26 The role of drivers Three ways to help your business keep driver travel costs in check

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Journey management

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29 Routing and scheduling Routing and scheduling software could cut your vehicle bills 10-20%

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CARS AND VANS

How best to pay for fuel

32 Nissan Qashqai Next-gen crossover offers 74mpg

33 Ford Transit Bigger successor with lower costs

34 Honda Civic Tourer Comfortable and efficient compact

35 Maserati Ghibli Eye-catching executive saloon

35 Maserati Ghibli www.mydrivingbusiness.co.uk ❚ Spring 2014 ❚ 3

DRIVING

Helping you make better decisions

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Contact us Driving Business, Media House, Lynch Wood, Peterborough PE2 6EA. Email editorial@mydrivingbusiness.co.uk If you or someone you know is aged between 16 and 24 and is interested in work experience opportunities at Bauer Media go to www.gothinkbig.com Editorial Editor Stephen Briers stephen.briers@bauermedia.co.uk Deputy editor Simon Harris simon.harris@bauermedia.co.uk News editor Gareth Roberts gareth.roberts@bauermedia.co.uk Features editor Sarah Tooze sarah.tooze@bauermedia.co.uk Web producer Christopher Smith christopher.smith@bauermedia.co.uk Contributors Catherine Chetwynd, Martin Brown, Trevor Gehlcken, Maurice Glover, Alisdair Suttie Production Head of publishing Luke Neal Production editor Finbarr O’Reilly Designer Charlotte Boon Head of project management Leanne Patterson 01733 468332 Project managers Angela Price 01733 468338 Kerry Unwin 01733 468327 Advertising Group sales manager Sarah Crown 01733 366466 Group advertisement manager Sheryl Graham 01733 366467 Account managers Wendy Cowell 01733 366472 Lisa Turner 01733 366471 Laura Holloway 01733 366469 Stuart Wakeling 01733 366470 Marcus Woods 01733 366468 Publishing Managing director Tim Lucas 01733 468340 Group marketing manager Bev Mason 01733 468295 Office manager Vicky Meadows 01733 468319 Group managing director Rob Munro-Hall Chief executive officer Paul Keenan Subscriptions: subscription@mydrivingbusiness.co.uk Printing: Precision Colour Printing, Telford. © 2014 Bauer Media No part of this magazine may be reproduced without the permission of the publisher. You can purchase words or pictures for your own publications.

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Editor’s welcome Vehicles have a number of roles in business, but their primary functions are either delivering goods or getting staff from A to B. This sounds simple enough, but the cost difference between doing it well and doing it badly can be significant.

In this issue of Driving Business, we’ve broken down the elements of journey planning to ensure you can focus on the ones that require the most attention in your business.

Vehicle choice is a more complex area than it may at first appear, with many cars and vans seeming much like another.

However, careful analysis of your business needs and matching those needs with the right vehicles will help to ensure you are not spending more money than you need to on these expensive company assets.

Our guide also looks at the driver and their key role in ensuring vehicles are driven in a fuel-efficient, safe way.

Technology can also make a difference, with software designed to ensure vehicles take the optimum route and provide realistic schedules (which reduce fuel use and the risk of accidents).

Using telematics, driving styles can be monitored to highlight where certain drivers may be displaying behaviour that increases wear and tear on the vehicle, as well as using excess fuel or speeding.

The technology can inform decisions on whether training may be needed for problem drivers.

There is an additional feature in this issue that outlines the different options when it comes to purchasing fuel for business vehicles.

You may be using one or more of these methods already, but it is useful to look at the benefits of other options should you be considering a change.

Simon Harris Deputy editor, Driving Business mydrivingbusiness.co.uk ❚

Spring 2014 ❚

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F RO N T E N D

Car salary sacrifice works for SMEs, claims Fleet Evolution Fleet Evolution has successfully launched car salary sacrifice schemes for businesses often classed as too small for traditional car salary sacrifice arrangements.

Salary sacrifice can be applied to providing a car as well as other employee benefits. With cars, staff choosing a low CO2 example paid for by giving up a portion of their salary can be a more tax-efficient way of running a vehicle.

Employee take-up rates have averaged almost 20% in the first few months of the scheme, suggesting that the nation’s 4.5 million small firms have an equally large appetite for car salary sacrifice as large firms.

Car salary sacrifice has long been established within larger employers, with 15% of organisations with more than 1,000 staff

thought to have adopted such schemes.

The average take-up rate reported by other suppliers among employees is about 5%.

Most providers cater for large firms as they have the necessary number of employees to ensure enough take-up of the scheme.

However, Fleet Evolution has created a ‘lite package’ for firms with 20–200 employees.

The scheme allows smaller businesses to introduce car salary sacrifice schemes to their workforce with no set-up costs and little administration.

Andrew Leech, director at Fleet Evolution, said: “We often received calls from smaller employers and questioned whether we could do more to help them.

“We have been amazed by how many cars

“ ”

these new companies are taking on, which shows just what an untapped market this is and how much potential and desire there is among smaller companies and their employees to participate.

“We always handle all promotion and roll-out for our customers and we were initially surprised at the turnout for launches, this has followed through with a significant take-up and it shows no sign of abating, with more quote activity as cars are delivered.”

We have been amazed by how many cars these new companies are taking on

Total Accident Management relaunches SME accident management service

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Total Accident Management has relaunched its proposition to supply smaller businesses with a dedicated accident management service.

Total is offering a range of services to small and medium enterprises (SMEs), which have previously not had access to assistance through the accident management process that larger businesses enjoy.

Total has tailored its service to the accident management needs and requirements of an SME. Since its recent soft launch, Total has signed up five direct SME customers and two contract hire providers.

Across the small businesses, there has been an average increase of 43.2% in the volume of incidents reported to Total.

SMEs can take up the service directly from Total or alternatively it can be offered through a contract hire provider.

The customer has the benefit of someone taking care of the multiple stages of an accident management claim on their behalf, while the contract hire company has a value-added reason to attract interest in their company with the capability to offer prospects a dedicated SME accident management service.

Amanda Mullans, operations director at Total Accident Management, said: “With nearly 1.2million SME companies trading in the UK, it is a huge market that has previously not been explored and we’re looking forward to offering our service to them.”

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Vehicle downtime costs smaller businesses as much as £30,000 a year £200 UK small to medium-sized businesses (SMEs) are losing up to £30,000 a year as a result of vehicle downtime, according to research from Ford-owned dealer group TrustFord, previously known as Ford Retail.

To coincide with the launch of a fleet management service for SMEs, Ford Retail Business Solutions surveyed 250 small business owners. An overwhelming majority (88%) believed their business was not big enough to warrant a fleet management service, despite the research finding that operating even a small number of vehicles could be costing more than is being budgeted.

Nearly one fifth (18%) of UK SMEs put aside just £1,000 a year for their fleet’s servicing and maintenance needs, despite the real cost being closer to £8,000.

Respondents said that on average, each vehicle spent four days a year off the road, costing the business on average £200 a day in lost manpower and productivity. One in 10 of those surveyed believed the cost was closer to £600 and for 6% up to £800 a day was being lost. With an average fleet size of 10 vehicles, the total loss would be about £8,000 a year. However, more than one in 10 (11%) of small businesses operate between 21 and 30 vehicles.

Another factor most businesses do not consider is the time spent managing the vehicles – the average SME can spend about 192 hours a year organising services, maintenance, fuel management, purchasing, replacing vehicles, tax and insurance, as well as ensuring the vehicles meet the necessary legal requirements.

Significantly, in nearly half (48%) of the organisations surveyed, either the business owner or managing director was responsible for the business’s vehicles – only 13% employed a dedicated manager and just 11% used a management company.

This suggests that for a large number of the UK’s SMEs, instead of focusing on driving business growth, managing directors are spending 24 days a year dealing with their vehicles – meaning the cost is potentially vastly more than what is budgeted.

Alan Maloney, sales development director at Ford Retail, said: “Our research reveals that many of the UK’s small businesses are seriously miscalculating the true cost of maintaining their fleets, large or small, and in most cases spending far more than is necessary.

“UK plc is looking at SMEs to lift us out of the downturn, and with so many wasting thousands of pounds a year in time and money, we would implore all small businesses to review their fleet requirements.”

According to Ford Retail’s research, fuel management and the increasing cost of fuel is the primary fleet management concern for SMEs (56%). With the average fleet of 10 vehicles clocking up 156,624 miles a year (15,624 per vehicle), it’s easy to see why.

■ See ‘Could your business do more to cut fuel bills? on Page 8 and ‘How best to pay for fuel’ on Page 12

The average cost to an SME of a day’s vehicle downtime

Four

The average number of days a year that each vehicle spent off the road

48%

of SMEs make either the business owner or MD responsible for the business’s vehicles

Other pressures identified include:

54%

Keeping the cost of maintenance down

32%

Budgeting accurately

25%

Knowing which models are right for budget and business

20%

Meeting compliance and legal requirements

WORDSMITH Money-saving tips for small businesses RECRUITMENT If a member of staff leaves, resist recruiting to replace them immediately.

Often it will mean the gap closes as the result of ambitious people picking up the role. If that doesn’t happen, then begin recruiting – but money has been saved in the meantime. Some experts recommend under-resourcing low-skill areas such as warehouse or data input, and relying on temporary staff in busy periods.

SAVE ENERGY Research by the Carbon Trust published at the end of 2013 estimated that businesses could save £300 million a year by reducing energy consumption, and that while more than 90% of employees were worried about the cost of energy at home, less than half were concerned about their employers’ bills.

But almost 80% of respondents had not been asked to think about energy consumption at work. Remind staff to switch off computers overnight, ensure heating and lighting isn’t used when not required, and consider installing low-energy LED lights.

AVOID LARGE LETTERS Royal Mail charges premiums for packets and larger letters. Redesigning product packaging and ensuring letters use small envelopes can result in significant savings for a business.

DEFER BUYING Some routine purchases are unnecessary. Stationery, for example, is a typically over-used account.

Suspending purchasing for a month can result in staff finding items hidden in desk drawers that have built up over time. A temporary suspension of buying can help prevent a build-up of stock.

OUTSOURCE BAD DEBTS

16%

Funding options

14% Meeting green requirements

Bad debt is a drain on resources with staff time spent chasing up unpaid bills as well as disrupting cash flow. Prices for a warning letter from a debt collector can be as little as £2 and can result in a payment before any time and effort from your own business is needed.

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F RO N T E N D

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O PINIO N

FUEL PRICES

“

Over the past five years, the cost of fuel at the pumps has risen by 50%. We don’t expect anything to deflect prices from a continued upward trajectory

”

COULD YOUR BUSINESS DO MORE TO CUT FUEL BILLS? any companies will still be keenly focused on controlling operating costs during the year ahead despite the encouraging economic noises coming from the Government regarding the economy, and we believe fuel will be a number one priority for many.

Tighter fuel cost management will continue to be high on the agenda for many businesses, and although the cost of fuel may have stabilised at the moment, with the Chancellor freezing the planned fuel duty rise this year, we don’t believe that should lull businesses into a false sense of security.

Over the past five years, the cost of fuel at the pumps has risen by 50% – while over the past two years it has gone up by an average of 18%.

We don’t expect anything to deflect prices from a continued upward trajectory.

So what can businesses do? One answer is to consolidate fuel costs through a fuel card to reduce administration and benefit from lower prices. This

M ■

M A RT IN B ROW N , M A N AGIN G D IR EC TO R , F L EE T A L L I A N CE

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will also help the person responsible for vehicles to be more organised with their fuel cost management and be able to track expenditure more clearly.

Another option could be to consider reducing engine sizes across the board to minimise the impact of fuel increases.

Technology developments are currently seeing satisfactory and, in many cases, outstanding performance produced through smaller and more frugal powertrains.

Businesses should therefore look at engine downsizing as a matter of priority.

At the same time, getting the message across to drivers that further savings are contained in their right foot can also pay dividends in lower fuel consumption and costs.

Businesses should also consider whether alternative fuels and electric vehicles (EVs) may bring further fuel savings.

EVs such as the Nissan Leaf and BMW i3 have the potential to bring significant savings both to businesses and company car drivers in terms of running costs and BIK. Where range may remain an issue, plug-in hybrids or range extenders such as the Vauxhall Ampera and BMW i3 range extender are possibilities, although these typically come with an upfront premium and there is a cost-benefit equation to be considered.

■ Read ‘How best to pay for fuel’ on Page 12

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STR ATEGY AND FUNDING

FUEL PAYMENT ME THODS

HOW BEST TO PAY FOR FUEL Is your business using the most cost-effective method to buy fuel?

Sarah Tooze outlines three different approaches you should consider ■

W H AT T HIS M E A NS FO R YO U Different types of vehicles and journeys suit different methods of paying for fuel.

You can save money, cut administration time and even detect fraud by choosing the right one for your business

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FUEL CARD How it works: Fuel cards are one of the most popular ways of purchasing fuel and mean drivers don’t have to pay for fuel out of their own pockets.

However, if they are not entitled to private fuel, they will need to make a repayment to the company each month.

There are various deals available from pump price fuel cards to fixed price cards.

Fixed price fuel card: Fuel is bought at a weekly fixed price, based on the average of the previous week’s wholesale diesel price (often referred to as Platts price), plus a handling fee of 1p or 2p per litre (ppl). This is often referred to as Platts Plus pricing.

A company could opt for a single-brand fixed-price fuel card with one of the fuel companies, such as Shell or BP, to get a discount, or they could pick a multi-brand fixed price fuel card. With a single-brand fixed price fuel card, drivers buy at Platts price at that brand’s forecourts, but

OPTION

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may pay pump price elsewhere. This type of card cannot be used at supermarket forecourts. With a multi-brand fixed price fuel card, it’s possible to use supermarket forecourts. For instance, a Keyfuels card can be used at Morrisons and Tesco, and the driver will pay Platts price rather than the pump price.

Pump price fuel card: Companies benefit from a much wider network using a pump price fuel card. The Allstar card (previously Arval), for example, can be used at 8,000 sites nationwide, whereas a fixed price card may have a network of fewer than 1,000 sites.

Several fleets are convinced that supermarket forecourts generally have the cheapest pump price.

However, companies need to ensure that if drivers do fill up at supermarkets, they don’t travel miles out of the way, wiping out the cost savings.

Some companies stipulate that drivers can only use motorway service stations in an emergency or that drivers should not allow the fuel level to dip below a quarter of a tank.

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From a company’s point of view, there is often little involvement needed with pay and reclaim, so it can be seen as ‘hassle-free’

Informing drivers of the cheapest places to fill up on the company’s intranet site or via email is another popular method.

Pros: There are admin benefits from using a fuel card.

Instead of dealing with hundreds of receipts, a company has one consolidated invoice, which is important from a VAT perspective.

Reporting is another benefit, giving companies information such as where drivers are filling up, whether they are using premium fuel and a vehicle’s mpg.

Exception reports can also help spot fuel fraud – for example, if a driver exceeds a set number of fill-ups in a day.

Cons: Fuel cards require managing to ensure that drivers follow policies set by the company.

A common complaint is that drivers do not submit their mileages when they fill up and companies often have to contact drivers for their mileages or employ a third party to manage this, such as The Miles Consultancy.

The amount of data generated can also be a headache.

Companies will need to pay an annual card fee (about £10 per card with some suppliers). There may be other charges such as a handling fee per transaction and charges for additional copies of invoices or transaction reports. Suppliers don’t typically tie companies into contracts, though.

Some companies use a number of fuel cards to benefit from different deals and coverage, but this makes reporting difficult.

Who it suits: Fuel cards are typically used by van fleets due to the high volume of fuel purchased, which could be difficult for a driver to pay for upfront. They also work well for company car drivers whose fuel is fully expensed.

They can become more problematic when the private versus business mileage split needs to be established.

PAY AND RECLAIM How it works: Drivers pay for fuel using cash or a debit/credit card and then submit an expense claim for their business mileage. They are usually reimbursed by the company at Advisory Fuel Rates (go to www.mydrivingbusiness. co.uk/afr for the latest AFRs}.

Pros: This approach encourages drivers to drive in a more eco-friendly manner and to seek out the lowest pump prices – particularly during times when fuel prices rocket or there are fuel shortages.

If a company is reimbursing at set rates – rather than the actual cost of fuel – it doesn’t have to worry where drivers are re-fuelling. It is the driver who will be out of pocket if they drive inefficiently or fill up at motorway services. From a company’s point of view, there is often little involvement needed with pay and reclaim, so it can be seen as “hassle-free”.

OPTION

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Cons: Companies need checks in place to ensure business mileages are valid. The benefits may be outweighed by needing to have a team of people checking expense claims.

There is also a cash flow disadvantage to the employee, which may mean they are reluctant to visit potential customers because they will have to wait a couple of weeks to be reimbursed for the fuel.

Who it suits: This approach is often favoured by company car fleets.

It works best for companies with sophisticated expense systems and the appropriate controls and measures in place.

8,000

sites nationwide can be accessed using the AllStar (previously Arval) fuel card

1,000 A fixed price card may have a network of fewer than 1,000 sites

BUNKERING How it works: A company has its own tanks and buys fuel in bulk at a discounted price, usually on a weekly or monthly basis. Drivers access the fuel using an electronic key fob.

Pros: Buying in bulk can bring significant cost savings.

It also means a company has some control over the price of fuel. For example, if you know when fuel duty is going to rise, you can purchase fuel in advance. If there are fuel shortages, it can be advantageous to have a supply of fuel. It also allows companies to control where drivers get their fuel from.

Cons: The biggest downside is the logistics and costs of the bunkering facilities. One tank could cost £7,000£10,000. The overall cost of running the site and maintenance can become expensive.

Theft is also a problem, especially in recent years with fuel prices rising, and a company will need to ensure the site is secure.

There are health and safety and environmental regulations to adhere to. A tank cannot be too near to residential premises, for instance, and must be maintained.

Who it suits: Van fleets that are depot-based typically use bunkered fuel.

OPTION

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S W I T CH IN G M E T H O D S As companies are not tied into fuel card contracts, switching from one type of fuel card to another is relatively easy. It is advisable to trial another card to be certain about the benefits of switching.

Data may be better with some fuel card companies than others – some may have a live

web portal, while others have printed reports.

Switching to or from bunkering is more difficult due to the investment in infrastructure.

Companies need to know their aims, look at every available option and balance savings against administration.

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BROADER VIE W

THE DRIVING BUSINESS INTERVIE W

‘Strength of brand is vastly important, the business is the brand’ Richard Harden explains his restaurant guides’ success to Catherine Chetwynd

T

he Rubik’s cube, iTunes and Netflix provide unarguable proof that if you create and then fill a gap in the market, success can be yours.

Banker brothers Richard and Peter Harden, based respectively in Dusseldorf and New York, did exactly that when they decided to launch Harden’s London Restaurants 23 years ago.

“Our jobs abroad exposed Peter to the Zagat guides in New York and me to Marcellino’s guides in all the major German cities and it was a combination of those factors that made us think it was worth having a go,” says Richard Harden.

“We launched it in 1992. It was really only in the late Nineties that London’s restaurants began to become a significant force and only in the current millennium that London has been recognised and has deserved recognition.”

When Harden’s launched, anyone wanting information about a restaurant – even just a phone number – needed a book to find it.

“We were one of a small, finite number of sources of information. Now, the number is neither small nor finite and every day brings a new competitor – you just use Google.”

Harden talks at great speed, as he explains that publishers would be hard pressed to sustain a quality guidebook in the UK on the basis of retail sales and that there is usually a subtext to the information they contain.

The AA restaurant guide is used as a marketing tool for the AA’s hotel inspections, Waitrose bought The Good Food Guide last year as part of a goal to establish itself as an expert in quality food and The Michelin Guide exists to promote not food, but tyres.

“Michelin probably sells 25,000 guides a year and if they sell at £5, less discounts to the trade and distribution costs, they wouldn’t turn over £125,000 – and that’s before you’ve paid for a single tree to be felled or for a single inspector to sit and eat a meal,” says Harden. “This is a blip on Michelin’s annual P&L, which is something like €20 billion [£17.6bn in 2012].”

“The only way we have ever made a living out of it is that we have always sold quite significant quantities of our books as corporate gifts, particularly, although not exclusively, in the City.

“We publish it ourselves. Usually you do that because you can’t get anyone else to publish it, but we never tried so we’ll never know whether we could have. We have to get someone who understands these things to design the covers, but the interiors are essentially a workman-like output rather than a thing of beauty, which many people think is part of their charm.”

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Harden partly puts the success of the guide down to a strong, consistent brand: “For us, strength of brand is vastly important, the business is the brand. Curiously, it can be very difficult to build up a brand like ours in the internet age: it is perceived as a solid woody brand because it comes from a solid, woody, tree-based heritage and the question is, how does it survive and prosper into the internet era?

“We had a clear proposition and we stuck to it. We remain the leading source in this area of editorially moderated, usergenerated content. That’s the short and pompous answer.”

Editorially moderated is the key. Harden describes TripAdvisor as “undigested and unmoderated stream of consciousness”.

He talks a lot about the internet and the proliferation of online reviews and it turns out Harden’s was ahead of its time in 2000, when it took investment from a dot.com incubator.

“They thought they could see major online possibilities and they managed to raise some money but they only lasted about a year and we’re still here.”

Having your own name as your brand has its downside, however: “Once you have put your own name to the business, it’s very difficult to detach yourself from it. It becomes, rightly or wrongly, an extension of yourself, which means that you feel an obligation to keep it on the road, almost regardless of the economic realities.”

Nonetheless, Richard and Peter Harden created and maintained a strong brand. Having launched the London restaurant guide, the brothers expanded the portfolio.

“We were building up to a nicely rounded catalogue, particularly of London-related guidebooks, and got up to about 10 at one point, but our timing was, with the benefit of hindsight, brilliantly wrong because in the mid-noughties information on the internet took off,” says Richard Harden. “So we are back to our core function. Restaurants have always been our bedrock, we publish the London and UK restaurant guides.”

Everyone makes wrong decisions and Harden’s advice on how to minimise their impact is to “stop digging and admit it – at least to yourself”.

He does not class himself as a successful businessman. “I think I have diligently kept the dream going. A successful businessman probably should have diversified and we would have been rich by now if it hadn’t been for the internet, it was all going terribly well.

“The real success would have been to… somehow make the transition from the old medium to the new. But there are vast enterprises like News International, as they used to be called, that have not done it. It’s not as though everybody out there has cracked it; it’s jolly difficult. If you’ve got business-critical information, like the FT, you can charge for it.

“Obviously the challenge for us is to make a success of the

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Richard Harden’s advice when you make a wrong decision is ‘stop digging and admit it – at least to yourself’.

“ ”

Once you have put your own name to the business, it’s very difficult to detach yourself from it

internet. We have not done enough to service our public electronically.” This year, Harden’s has started to upload more new material on to the website and has introduced a weekly newsletter, an improvement on the previous, “barely monthly”, incarnation.

In the interest of maintaining brand image and raising its profile, Harden’s has a relationship with The Sunday Times.

“We are playing with the big battalions,” says Harden. “We are in the process of developing what I hope is a long-term project with the paper to build up the Sunday Times Food List as an opposite number to the Sunday Times Rich List.”

The list is an annual, definitive list of Britain’s top 100 restaurants. “It is in its fifth year this year. If you are talking about traditional media, the A, B, C1 end of the market, it is still the largest medium in town,” says Harden.

He acknowledges Harden’s has employed very good people and not paid them very much.

“They’ve generally stayed because they’ve enjoyed the environment and found it quite intellectually stimulating.”

The current team is new. “We had a major clear-out recently.

Our tea lady went off and got a very, very good job with Hilton, planning what restaurant would be appropriate to a hotel’s location and country. She was head hunted.”

So even being a Harden’s tea lady can give your career a boost – something any business may aspire to.

Harden is adamant that no matter how much business nous you have, luck plays a major role. “I think you have to create the pre-conditions, but whenever I see a fantastically successful businessmen, I always think, half ‘well done you’ and I also think, ‘you were jolly lucky, weren’t you’.“ Harden’s is not a typical business in that most of its competitors are not in the game to make money in the short term.

“Even stranger, we are microscopically small compared to most of our competitors, which is, if not unique, highly unusual. In some places, we are in competition with Michelin, which as I mentioned, has a turnover of €20 billion a year. Well, I can share with you that our turnover is less than €1 million [£821,000] a year – it is 20,000 times bigger than us.”

Richard Harden is married with two children aged 11 and 13 and his wife is a solicitor in the City. He enjoys eating out, but does not necessarily spend large amounts to do it.

“I’m more interested in eating our way around the great brasseries of Paris, which is what eating is about – history and people enjoying themselves,” he says.

And his bugbear? “People who take photographs of food.

Harden’s is not interested in giving a foodie view, we are just trying to say what people think.”

Which takes us back to brand consistency, underpinned by a clear message and honest delivery.

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Quit smoking.

Clean up with lower whole life costs.

Poor air quality kills.* In the UK, 5000 premature deaths a year are linked to vehicle exhaust emissions. It’s time to quit.

Unlike diesels, petrol full hybrids run cleaner, with near zero NOx emissions, low CO 2 and no sooty particulates.

They also deliver excellent real life fuel economy and are cheaper to run than equivalent diesel models.

With no costly particulate filter, no starter motor, drive belts, alternator or clutch and regenerative braking reducing brake wear, service and maintenance costs are reduced.

Hybrid models also cut personal and company car tax, National Insurance and Vehicle Excise Duty, meaning whole life costs are significantly lower.

Our 12 different hybrid models range from city car to 7 seat MPV, so challenge us to show you how much your business and drivers can save, whilst cleaning up.

Arrange your personalised fleet financial health check, call 0844 701 6186 or visit brilliantforbusiness.co.uk.

*Environmental Science Technology – Public Health Impacts of Combustion Emissions in the United Kingdom 21/03/12; COMEAP – Committee on the Medical Effects of Air Pollution; **World Health Organisation 2012 Model shown is Auris Touring Sports hybrid – mpg Combined 76.3 Urban 78.5 Extra Urban 78.5 CO2 85g/km NOx 6mg/km. The mpg figures quoted are sourced form official EU-regulated test results. These are provided for comparability purposes and may not reflect your actual driving experience.

Business solutions from the world’s No. 1 Green Brand (Interbrand 2011, 2012 & 2013)

Desirability Reliability Rangeability

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Do you know the Total Cost of Ownership?

A ‘one size fits all’ vehicle funding principle is rarely cost efective, efcient or attractive to either the employer or employee. Our vehicle funding experts will help you through the complex maze of financing options and provide you with the tools to implement the optimum solution, whatever your circumstances.

Security may be required and product fees may apply.

www.lombardvehiclesolutions.com enquiries@lombardvehiclesolutions.com

Tel.: 0844 600 9012

Lombard Vehicle Solutions is a contract hire and fleet management product provided by ALD Automotive Ltd, trading as Lombard Vehicle Solutions, Oakwood Park, Lodge Causeway, Fishponds, Bristol BS16 3JA. ALD Automotive is registered in England No. 987418.

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Put your business on the right road how vehicle selection, driver training and the latest tracking and routing technology can help your business

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RIGHT VEHICLES

PICK UP THE RIGHT CAR AT THE RIGHT PRICE Choosing the right vehicle for the right job means your business is reducing waste and saving money

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W H AT T HIS M E A NS FO R YO U The price, running costs and resale value of a vehicle vary widely depending on engine type, vehicle size and equipment level.

Analysing what you want a vehicle to do for your business is the easiest way to avoid spending too much

£5,000 The current grant off the purchase price of an electric car

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By Simon Harris areful analysis of the type of work a car or van will mostly be used for will ensure money isn’t wasted on procuring a vehicle that is too large or small for the job, too thirsty, or too expensive to maintain.

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PETROL, DIESEL, HYBRID OR ELECTRIC?

Diesel is usually more economical than petrol, but diesel cars are usually more expensive to buy. It is often the case that low annual mileage cars will be cheaper to run with petrol engines, as the higher purchase price (which often translates to higher monthly lease rates and higher fuel prices) takes longer to break even.

For high-mileage vehicles, diesel is usually costeffective. They are at their most efficient at low rpm in high gears.

While petrol-electric hybrids can often rival diesel cars for official fuel consumption figures, and often have even lower CO2 emissions, these vehicles are working at their best around town.

Hybrids often have a higher purchase price than petrol and diesel vehicles, although the gap between diesel and hybrid appears to be shrinking.

Hybrids use a combination of battery power (usually recharged under braking or when the engine is under light load) and an engine. Some hybrids are able to run on electric power alone for short distances at low speeds.

During these periods, no fuel is burnt and fuel efficiency therefore improves.

But at higher speeds, the battery rarely intervenes to save fuel, so a driver who covers a high proportion of motorway miles will not achieve the full fuel economy potential of a hybrid car.

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Battery electric vehicles are suited to urban use when the business operating them has charging facilities on site.

Depending on the electricity tariff, the charge can cost about 2-3p per mile, compared with 10-15p per mile for petrol or diesel fuel in an equivalent-sized vehicle.

There is currently a £5,000 grant off the purchase price of electric cars and up to £8,000 off an electric van.

There is no annual BIK charge in place, although this will change from 2015, with a low tax rate imposed.

These can help offset a high purchase price, but many businesses may still be better off choosing a conventional car or van.

CAR EQUIPMENT Cars are available with a vast range of equipment, some of which is appropriate for a driver who uses the vehicle for work, and some features are just nice things to have on a vehicle.

The latter would not be the best way of spending company money, as only a few optional items boost a car’s value on the used market.

Sometimes, an employee’s car allowance will enable them to add equipment to a standard model and keep within the budget, but it pays to monitor what is available on the vehicles, how costly they may be versus their value as part of a business tool, and how useful they may be as a means of keeping employees happy.

Parking sensors These are not worth a great deal on the used market, although if a car is likely to be sold to a more mature customer where mobility issues come into play, they may make a car more desirable. However, there are some good aftermarket systems that cost from about £50 that do the job just as well. It may be worth

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£250

The amount experts estimate air conditioning could add to the value of a used car

remembering that choosing parking sensors may also avert low speed dents and scrapes that would require smart repairs.

Air conditioning Most cars come with air conditioning, but used car customers now expect it to be fitted, regardless of whether it’s a low-specification small car or a medium specification family car.

Experts estimate it could add £250 to the value of a used car, and in the meantime it has given the driver a more comfortable journey. Most air conditioning systems use extra fuel when they run, but so does driving with the windows open.

Cruise control Used car buyers like cruise control, not necessarily to keep them at a steady speed on the motorway, but to set a speed limit and ensure they stay within it when travelling through speed camera zones.

Satellite navigation A £300 portable sat-nav system that is capable of accepting online updates is now seen as perfectly adequate for most cars without a factory-fit system.

Used car customers also won’t distinguish between an entry-level factory-fit system and a premium system, such as the difference between BMW’s Business Navigation and Professional Navigation – the latter has a £400-plus premium over the former when new.

Automatic transmission Recent improvements in technology and a variety of different systems on the market mean automatic transmissions do not result in the same fuel consumption penalty as they have in the past. However, they are only highly desirable in medium and large cars on the used market.

Bluetooth connectivity As long as the system is compatible with the phone used by the used car customer, there may be a benefit in selecting it as an option, as more used car buyers understand the law regarding mobile phone use while driving.

However, best practice now suggests even handsfree phone use should be banned when driving, with Bluetooth used as a form of streaming music through the car’s audio system.

COULD YOU DOWNSIZE YOUR VANS? Increasingly versatile small vans, coupled with the imaginative use of available space as well as the introduction of lighter racking systems, mean many businesses are downsizing their light commercial vehicles and cutting costs.

Sales of smaller vans are on the rise at the expense of the ubiquitous large panel van.

Manufacturers are producing smaller engines, but with improved performance while also delivering lower emissions and better fuel consumption.

The downsizing trend is being driven by the versatility of small vans, with features such as folding front passenger seats and folding bulkheads allowing vehicles to carry loads they previously could not.

Contract hire providers will often challenge their customers about the size of vans they use and the loads they carry.

Businesses often replace like with like because they have always operated the same size vehicle. But a combination of improved vehicle performance and flexibility means van downsizing is a realistic option for many organisations, with significant savings in operating costs accompanied by a ‘green’ halo.

£50

for a good aftermarket parking sensor can mean the systems are not worth much on the used market

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The downsizing trend is being driven by the versatility of small vans

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mydrivingbusiness.co.uk The Driving Business website is packed with information to help you choose, manage and sell your company cars and vans Choose the right cars and vans Want to compare car or van running costs? Our tool provides the calculation based on price, resale value, fuel costs and service, maintenance and repair costs. Want to help your drivers choose their next car? Our Car Tax Calculator easily and clearly tells them what tax they’ll have to pay. You can also read reviews of every key car and van from our experienced road testers.

Managing the cost of your vehicles With myriad funding options to choose from, this section will help you decide which is best for your business. You can also get tips to help you reduce your fuel bill while our maintenance advice will ensure your vehicles stay on the road.

Safety & Compliance Running company cars and vans isn’t simply about choosing which vehicle you want. You have legal obligations to keep staff safe and you can find out what those are in this section – and what the implications are if you fail to comply.

Here, we also advise you on how to reduce accident costs and provide details of vehicle safety ratings, as well as offering tips on your drivers’ responsibilities.

Cool Stuff & Business Surgery Business Surgery is where you can ask questions of our experts and find best practice case studies on improving safety or reducing cost. It also contains the ‘Broader View’ articles which explore related areas of business management, such as funding and IT. Cool Stuff contains future launches, crazy concepts and things that we think will excite or surprise you from the business world.

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TELEMATICS

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IS TELEMATICS RIGHT FOR YOUR BUSINESS? Tracking your vehicles and how they are being driven can cut costs and increase safety. Here’s all you need to know about telematics ■

W H AT T HIS M E A NS FO R YO U Telematics can help to cut your business’s fuel bill, warn you if employees are driving dangerously and inform the management and number of your company’s vehicles. However, businesses that choose to install tracking systems need to be aware of the associated legal responsibilities and how to avoid the dreaded ‘data overload’.

By Sarah Tooze

hat is telematics? It is essentially a way to transmit data about a vehicle’s location and use via a device fitted to it. The amount and accuracy of data you receive depends on the type of system you opt for – a straightforward tracking system or a more sophisticated one that focuses on driver behaviour.

Data can include vehicle speed, time spent idling, harsh braking/accelerating/cornering and fuel consumption.

Some systems can report speed by road type, so you can tackle all speeding – not just on motorways.

This data can be checked by logging into a website or, in some cases, a smartphone app. Alerts can also be set so that certain driver behaviour will trigger an email – telling you if a driver is repeatedly speeding, for example.

Some systems generate ‘league tables’ that show the best or worst performing drivers. TomTom’s system, for instance, grades drivers on speeding, engine idling, harsh braking and fuel consumption.

Drivers can receive instant feedback on their driving too. Greenroad’s system gives drivers real-time feedback

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through a series of LED lights on the dashboard, which flash red when a driver brakes too harshly. Feedback via a smartphone app is also available.

Some systems can even automatically refer drivers to complete additional online training. FMG’s telematics product Ingenium Dynamics assesses drivers as low, medium or high risk based on more than 100 factors, such as erratic lane changing and speed of acceleration.

The system takes into consideration risk elements such as Black Spot locations, weather and safety cameras.

A driver league table based on the number of incidents per miles driven is then produced. Drivers who regularly show up as medium or high risk are referred to an e-learning centre, which has more than 2,500 interactive driving video modules.

By completing the modules, drivers can recover points to put back into the league table.

WHAT ARE THE BENEFITS?

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The benefits you get from telematics depend on your type of organisation, how drivers pay for fuel and what action you take as a result of the data.

Companies whose vehicles are used entirely for work purposes, such as courier and delivery firms, utility companies and construction companies, tend to see greater benefits from telematics than businesses that offer company cars to drivers as a perk.

If your drivers pay for their own fuel and then reimburse the company at the Advisory Fuel Rate set by the Government, the fuel savings from telematics are of no benefit.

However, if you give your drivers fuel cards and pay the actual cost of fuel rather than a set rate, you could make significant savings from telematics – provided that you use the data in the right way.

The data should be used to identify which drivers need training and should be shared with drivers so that they can improve.

Some organisations have used telematics data to introduce incentive schemes – rewarding the best performing drivers with shopping vouchers or a similar prize.

Telematics can also be of use in understanding your vehicles’ utilisation and in meeting your business’s HMRC requirements (See ‘Benefits of telematics’ panel, overleaf).

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TELEMATICS

■ T H E B EN EF I T S O F T E L EM AT I C S IN C LU D E : ■ Being able to identify the nearest engineer to a job, saving both fuel and time.

Chris McClellan, CEO of Remote Asset Management (RAM), says: “Managers can allocate work in the most efficient way. They can see on a map who is best-placed, rather than ringing five or six people to see where they are.”

■ Improved customer service through giving customers an estimated time of arrival.

■ Being able to differentiate between business mileage and private mileage, which helps to meet HMRC requirements.

■ Reducing unauthourised vehicle use.

Quartix says its customers have saved 50 litres of fuel a month by making sure vehicles are not used at weekends.

■ Being able to plan maintenance intervals using the mileage records. This means costly repair bills may be avoided and the residual value of vehicles should be maximised.

■ Increased productivity. A tracking system shows what time employees are starting and finishing work.

“It’s about making sure that if a job crops up at 2.30pm on a Friday, someone goes and does it,” says Quartix managing director Andy Walters. “An extra invoice every day could have a massive impact.”

■ Accurate timesheets. “Employees might fill out a timesheet on a weekly basis rather than day by day and forget the hours they have done. You could end up billing one client for four hours and another client for two hours and it should have been the other way around,” McClellan says.

■ Improved staff morale from work being distributed evenly.

■ Savings on overtime payments. “You could save £2,500 a year per vehicle just by making sure that the timesheet reflects the work done,” says Walters.

■ Fuel savings as a result of reducing engine idling time, getting drivers to drive in an ecofriendly manner and tackling speeding.

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“There is a huge difference in fuel consumption between driving at 50mph and driving at 70mph,” says Peter Millichap, European marketing manager at Navman Wireless.

■ Recovering stolen vehicles. One self-insured fleet saved more than £350,000 from the recovery of stolen vehicles in 18 months thanks to ALD’s ProFleet2 telematics device.

■ Verifying a parking ticket or other offence.

■ Being able to prove whether a company vehicle has been involved in an accident or not.

■ Being able to examine the circumstances surrounding an accident, such as speed.

■ Companies can assess how long employees have been driving for and whether they are taking adequate breaks.

■ Helping to protect lone workers.

■ Understanding vehicle utilisation. Are all your vehicles being used every day, or do they spend a lot of time parked or idling? If so, you may be able reduce the number of vehicles you have.

■ Potential insurance discounts. Large fleet insurance companies such as Zurich have partnered with telematics providers and offer discounts for fleets fitted with telematics.

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Businesses can’t control the cost of petrol and diesel, but they can focus on the efficiency of their fleet

HOW MUCH DOES IT COST? Prices start from a few pounds per vehicle per month, but the total cost will obviously vary depending on the number of vehicles you intend to fit telematics to and whether you opt for a basic tracking set-up or a more sophisticated system.

You have a choice of buying telematics systems or leasing them, either via an external lease arrangement or through a lease arrangement with the telematics provider. There will also be a monthly service charge.

Suppliers typically estimate a payback period of six months to a year. How quickly this is realised will depend on the industry and what the fleet is doing.

Tracker offers new customers a fuel saving guarantee of 10% or their money back.

David Wilson, sales and services director at Tracker, says: “Businesses can’t control the cost of petrol and diesel, but they can focus on the efficiency of their fleet to drive down those costs.

“Our fuel savings guarantee promises our customers very real savings, designed to help them boost their bottom line and their green credentials.

“Fleet telematics offer businesses the key to controlling their costs and Tracker is prepared to stand by our fuelsaving claims.

“In today’s challenging economy, rising fuel prices and other rising costs are taking their toll on business budgets.

“Tracker’s fleet telematics systems give firms the information they need to make informed decisions, by monitoring their drivers and vehicles to drive up efficiency and customer service, while reducing fuel costs and CO2 emissions.”

There are a vast number of telematics providers to choose from and you can opt for telematics through your insurance company, leasing

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provider or an accident management provider such as FMG or RAC. Leasing company ALD Automotive fits telematics as standard to all of its vehicles to record mileage and ensure they are serviced on time. Customers can upgrade to a full telematics solution for a fee.

WHAT ISSUES SHOULD I BE AWARE OF? One of the biggest criticisms levied at telematics is that it can give you too much information. Businesses that run thousands of vehicles often have to employ analysts to manage and act on the data.

Failing to act on data that shows your drivers are regularly speeding could also land you in hot water with the police.

Telematics providers say the way around this is to opt for a system that allows your business to ‘manage by exception’. This means that rather than having to plough through all of the data, reports are generated only on the drivers that need attention. For example, you could get a report on the 10 drivers who speed most often.

It’s important to check how user-friendly the reporting software is. For example, is it immediately clear after logging in whether there are any issues? Usually this is done through a series of ‘dashboards’.

Find out how much support the telematics provider is willing to offer. Will there be a monthly or quarterly review? What do they charge for training?

Companies also need to be mindful of data protection issues and privacy laws.

Employees must be made aware that their company vehicle is being monitored, what is being recorded and what it will be used for.

This should also help reassure any employees that are nervous about telematics and view it as ‘Big Brother’ or a ‘spy in the cab’.

Point out the benefits such as helping to protect them from insurance scams and making them safer drivers (which benefits them outside of work as well).

Opt for a system with a privacy button, so employees have peace of mind that their private journeys are not being recorded.

You also need to check how the system is wired up and whether there is any risk that it will invalidate the vehicle manufacturer’s warranty.

10%

The fuel saving Tracker guarantees to new telematics customers, or their money back

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DRIVERS

THE ROLE OF DRIVERS You’ve chosen the right vehicles and fitted them with the right technology, but one thing can still push up your business’s travel bill: the driver. Here are three ways to help keep driver travel costs in check ■

W H AT T HIS M E A NS FO R YO U Drivers remain one of the biggest unknowns in a business’s travel costs, but preventing unnecessary journeys, training drivers in eco-friendly techniques and getting them to perform weekly vehicle checks, will save money and reduce breakdowns and accidents

20p per litre – the saving in fuel costs by drivers who complete the Energy Saving Trust’s Smarter Driving course

£250 The resulting saving for a motorist who completes 12,000 miles a year

1. INTRODUCE A TRAVEL HIERARCHY / TRAVEL DECISION TREE The most obvious way to control travel costs is by preventing drivers from making the journey in the first place, where possible.

This can be done by introducing a travel hierarchy or travel decision tree – essentially a series of questions that staff should ask themselves before they travel, starting with: is the journey necessary or could they hold a tele- or video-conference instead?

If it is necessary to travel, can they walk, cycle or use public transport?

If using a car is the only way to get there, is there a colleague they can car share with?

The last resort should be staff using their own car.

The Environment Agency has used this technique to reduce business mileage, carbon emissions and costs. It has avoided a million miles a month through phone and web conferencing alone.

To encourage staff to consider alternatives to the car, it’s worth issuing them with walking and cycling maps of the local area.

You could also set up a salary sacrifice scheme so they can purchase a bike at a discounted price.

Car sharing can be encouraged by setting aside parking spaces for staff that travel to work together.

This can be promoted to staff through a poster campaign, emails or a dedicated area on the intranet.

Is the journey necessary or could I hold a tele- or video-conference instead?

If it is necessary to travel, can I walk, cycle or use public transport?

If using a car is the only way to get there, is there a colleague I can car share with?

2. TRAIN YOUR DRIVERS TO BE ECO-FRIENDLY If drivers have to use their vehicles, ensuring they know how to drive them in an eco-friendly manner will cut fuel costs and wear and tear on the vehicle, as well as making them safer drivers.

Drivers who complete the Energy Saving Trust’s Smarter Driving course, which is funded by the Department for Transport, could save the equivalent of 20p per litre. This means a motorist who completes 12,000 miles a year could save up to £250 on fuel.

Smarter Driving sessions cost £15 per driver for bookings of 100 employees or more, and £20 for smaller bookings.

The University of Manchester sent 100 employees on the course last year. They achieved an average of 39.9 miles per gallon, the equivalent of an 18% reduction in fuel consumption. Private hire and courier company 26 ❚

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Qdell and LHR Express Cars has also trained all of its drivers through the Energy Saving Trust.

Julie Fitzell, Qdell and LHR’s head of environmental standards, says: “Our business is transporting people from one place to the next, so it’s in our interests to make sure they are driven safely.

“With the smarter driver training, drivers are taught how to save themselves fuel, but that also incorporates not speeding, not braking sharply, not accelerating harshly, not going round corners too fast or doing rough lane changes.”

An alternative to sending drivers on a course – although less effective – is to simply issue them with eco-driver training tips. Tips could be included in the driver handbook, emailed to drivers or put on your intranet.

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Tyres which are 20% underinflated will increase fuel consumption by around 3%

3. GET DRIVERS TO PERFORM VEHICLE CHECKS Drivers should carry out a number of weekly checks to increase safety, save fuel and minimise the risk of their vehicle breaking down: ■ Tyres: Drivers need to do a visual tyre inspection to make sure there are no cracks, bulges or excessive wear.

Excessive wear results in a loss of grip, a common cause of crashes. Drivers should also check tyre pressures are correct in accordance with the vehicle manual, as tyres under low pressure wear out quicker and use more fuel.

Peter Fairlie, group sales director of ATS Euromaster, says: “Tyres have to work harder if they are incorrectly inflated. Under-inflation of 20% (around 6psi in many cases) can reduce tyre life by 20%, massively increasing running costs.

“Tyres which are 20% under-inflated will increase fuel consumption by around 3%.”

The tyre tread depth should be checked with tyre gauge and should be not be below 1.6mm (the legal requirement).

■ Windscreens: Any chips in the windscreen should be reported immediately – a repair costs about £70, whereas a replacement can be anything up to £1,000.

Drivers should be instructed to check their screens every day.

■ Lights: Drivers should check lights before setting out on a journey. There are a couple of quick and easy steps to take; firstly they should ensure the lights are clean, then switch on the ignition and turn on all the vehicle lights. They should then step out of the car and have a quick walk around to check they are all operating properly.

■ Oil: The vehicle’s oil should be checked with a cold engine. The engine needs to have had at least 15 minutes to cool down after switching off the ignition. To check the oil, the driver needs to lift the bonnet and remove the dipstick, wipe and then re-insert. Removing the dipstick once more should show how much oil is left in the vehicle.

■ Brakes: If brakes start to fade, the risk of having an accident dramatically increases. The

driver can test vehicle brakes before departure by driving very short distances and braking to check the wear.

■ Coolant: Keeping the vehicle’s engine cool is important, so regular checks are needed to make sure the engine coolant is sufficiently topped up. The driver should always add some anti-freeze to stop water expanding during colder months.

■ Fluids: If a driver’s vision is impaired because they cannot clean their windscreen, the risk of an accident is greater, so they should make sure the vehicle has enough washer fluid by lifting the bonnet and filling the tank with screen wash if the levels are low.

Employers should stipulate in the drivers’ handbook that these checks be carried out. The rules should be clearly stated and drivers should sign to say they have read and agreed with its contents. That way, drivers can’t plead ignorance in the event of a problem.

Employers could also provide drivers with a vehicle check sheet to complete or get them to use a mobile phone app to demonstrate they have done the checks.

” £70 The approximate cost of repairing a chip in a windscreen as soon as it is reported

£1,000 The potential cost of replacing an entire windscreen

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ROUTING AND SCHEDULING

TAKE A SMARTER ROUTE TO CUT COSTS Routing and scheduling software could save your business money ■

W H AT T HIS M E A NS FO R YO U

Routing and scheduling software could save your business 10-20% by cutting mileage, fuel use and emissions, as well as improving your turnaround and customer service.

However, it is important to choose the right system for the size of your business and ensure it is tested and set up properly.

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and even scenarios such as if the business grew by 150%.

“If it is set up properly, the system ought to pay back very quickly – 10-20% saving is a realistic direct benefit, even before you look at improved turnaround or customer service.”

THREE-STAGE APPROACH Route Monkey agrees that R&S software should be selffunding. CEO Colin Ferguson says the company used to offer a benchmark and trial as an option, but it now has a standard three-stage approach to selling and installing the software.

“It simply works better. We benchmark the operation, running a trial, first looking at how your company organised it and then how Route Monkey would do it,” he says.

“Then we pilot the software; and then once we go live, we tailor and adjust it to that operation.”

Ferguson says the last phase of adjustment is crucial; optimisation is not just about freight and vehicles, but lots of small variables.

“If we find one driver has a heavier right foot, for instance, we set a parameter putting him on motorway

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By Sarah Tooze outing and scheduling (R&S) software works faster, smarter and more objectively than humans, so there is often a business case for introducing an R&S application into even the smallest fleets.

However, there are a variety of products and approaches available, so it is important to clarify an operation’s current and future needs and then look carefully at the options on offer.

“Most R&S software is Windows-based, so on the surface it can all look very similar,” warns Will Salter, managing director of Paragon Software Systems.

“It is important to ensure you understand what’s going on under the surface and that the product will deliver the quoted savings.”

The software should be self-funding and should pay back rapidly. Before a system is even purchased, any decent provider should be able to prove this with replicable savings based on your data.

“Nowadays, people will generally run tests before any decision,” says Salter.

“Systems can easily be tested running days’ worth of orders, or orders taken from peak periods, slack periods

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journeys where that will be mitigated. That’s how you start to get every drop of benefit,” he says.

He also says products approach optimisation in different ways.

Colin Ferguson, CEO, Route Monkey

OVERHAULING FIXED ROUTE SYSTEMS Companies move to R&S software for different reasons. AAH Pharmaceuticals, which has 30% of the wholesale medicines market and runs 600 vehicles out of 19 depots, says it brought in new software to help it overhaul a fixed route system that had evolved over many years.

“Paragon has effectively enabled us to re-evaluate our transport operation with minimum fuss,” says organisation manager Steve Anderson.

The software has been installed at three sites and is saving £300,000 at Birmingham, and £500,000 at Ruislip and Leeds combined.

Anderson says he expects these savings to continue as the system is rolled out across more depots.

The company has also improved customer service, as it can now guarantee arrival times to the nearest 15 minutes.

Liberty Wines, a London-based national wines wholesaler, turned to automated R&S planning partly because it offers better control and streamlining of its mixed fleet, which is 80% subcontractors.

“The majority of our drivers are long-term subcontractors, who are paid a daily rate. When we plan manually, we can only estimate start and finish of their runs, but [now] we’ll have visibility of their workloads,” says customer services manager Ben Marriott.

Iceland has invested in what supplier Route Monkey believes to be the largest roll-out of R&S software in any UK van fleet.

The supermarket chain wanted to boost the performance of its home delivery fleet of 1,300 vehicles across 800 stores.

Unlike many operations, which schedule each morning, Iceland’s customers will be offered the next available two-hour slot, whenever they shop, meaning routes are recalculated in real-time.

“It enables us to optimise the use of our fleet and driver resources, while also reducing our fleet mileage

and emissions. We conducted extensive trials and were extremely pleased with the return on investment.

“It allows us to do more deliveries in fewer miles,” says director of delivered sales John Mackie.

The software was also tailored to work with new PDA equipment, and includes a deviation function, which sends an alert to drivers or managers if the vehicle is off course or off timescale by a set percentage.

Most R&S software will integrate with other Windowsbased logistics and fleet software, such as telematics, tracking and fleet management systems, but the extent of potential integration is a question operators should always ask.

Some systems, such as Route Monkey, are delivered in whatever form the company wants it, whether integrated with an in-house system or standalone.

There are also exceptions, as in the case of parcels carrier XPD, where the algorithm behind the Route Monkey software has been embedded directly into the parcel company’s own system.

EXAMINE HOW SOFTWARE IS DELIVERED

10-20% £800k The ‘realistic direct’ saving a company could expect from installing an R&S system

AAH Pharmaceuticals’ estimated saving since R&S software was installed across three sites

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How software is delivered and paid for is also worth examining.

Paragon produces an out-of-the-box system, which the user can tailor by adjusting existing parameters.

Generally it is sold as an installed system, although it can be hosted or cloud-based depending on what a customer wants.

Route Monkey suggests software as service (SAS) cloud-based products, which are still unusual in the routing market, are actually more useful for very small businesses.

“For fewer than 30 vehicles we would recommend a SAS model, although we can also install it on PCs or a server,” says Ferguson.

“For larger businesses it’s a decision that requires some consultancy.

“Although generally you have only one person [at a location] accessing R&S software at a time – because you don’t want multiple plans – a company like Iceland has many depots, which may all be planning at once.

“Placing their software on the cloud means their resource can be scalable to the number of transport planners working at that moment – if more come online, more servers can fire up.”

“

[R&S] enables us to optimise the use of our fleet and driver resources, while also reducing our fleet mileage and emissions

” ■ K E Y T IP S ■ Check that software can be sufficiently tailored to your operation, needs and even drivelines.

■ Look at different methods of hosting or installation, and payment.

■ Ensure the software proves itself in trials using your data before you commit.

■ Initial routing is usually fast, but check how long it will take to reconfigure your plan for last-minute jobs.

■ Ensure you can compare the planned routes with the actual performance by the driver, otherwise your savings may remain on paper.

Advertisement feature

How to choose the right vehicles and funding Ensure your business gets the best value for money when choosing cars

H

aving decided to invest in one or more company vehicles, many small business owner/managers find it hard to decide the best route forward.

The question of buying versus leasing is key.

Outright purchase has clear advantages – you could negotiate an attractive discount; there are no mileage restrictions; you have full control over when you sell the vehicle. But you may have higher running costs or a lower resale value than expected.

Leasing (such as contract hire) is essentially a long-term rent with various options. The leasing company usually sources the vehicle at a discounted price and at the end of your contract it disposes of the vehicle. Your fixed monthly rental is for a set period and an annual mileage. Excess mileage charges and termination fees are often a concern, but a reputable provider reflects only the additional costs incurred – costs that you too would incur in lost value if you owned the vehicle.

By far, the most important consideration is not the initial cost, but the whole life cost of the vehicle. Ask leasing providers for examples of funding calculations, but bear in mind that outcomes can change depending on P11D, CO2 and your Weighted Average Cost of Capital rate.

Another important choice is the make and

Total cost of ownership

model. Whether one vehicle or a whole fleet, the factors that affect the real cost to your business are the same. These include fuel choice, engine size, the tax implications and how each vehicle will be used.

You’ll need to take into account how well a vehicle holds its value, how fuel-efficient it is, whether it has low CO2 (affecting the business and its drivers), its ongoing maintenance and repair costs, and its suitability for the task. Don’t forget that poor driving style can exacerbate fuel and maintenance costs significantly – even if accidents are avoided.

The bottom line is that every element has a financial implication and two cars with a similar list price can have a dramatically different whole life cost.

To ensure you make the best choices for your business, get advice from a fleet specialist. They will use tailored software to take your preferences into account and show you a range of options, as well as exploring

To find out more, contact Lombard Vehicle Solutions on 0117 908 6490 or visit www.lombardvehiclesolutions.co.uk Lombard Vehicle Solutions is the contract hire and fleet management product provided by ALD Automotive.

Registered address: Oakwood Park, Lodge Causeway, Fishponds, Bristol BS16 3JA.

how different choices affect the results.

Fleet specialists also refer to ‘TCO’, which stands for ‘total cost of operation’ and captures all costs associated with financing a vehicle, including funding, maintenance, insurance, business mileage reimbursement (reflecting the true economy of the selected car), employer’s NI for the car benefit, VAT and corporation tax reliefs. This is the most scientific way forward – and you may discover differences of up to 15%.

Still not sure? Consider this: two cars from the same manufacturer, with similar specification, the same engine size, the same monthly rental – but the TCO cost over a three-year period differs by a staggering £2,400. And that’s just one vehicle…

To ensure your hard-earned business cash is spent effectively, guidance from an impartial vehicle management specialist makes a real difference. You may discover that the vehicles you can afford are more attractive than expected.

■ C ARS AND VANS

NISSAN QASHQAI

ACENTA PREMIUM 1.5 DCI

Longer, wider, packed with technology and offering 74mpg fuel efficiency

Upmarket styling and a 40kg weight reduction

NEED TO KNOW

COSTS

■ Next-generation Qashqai goes on sale this month ■ Reworked 1.5 dCi engine emits 99g/km of CO2 ■ Higher residual values than predecessor

P11D price £22,635 BIK tax band 14% Annual BIK tax (20%) £634 Class 1A NIC £437 Annual VED £0 RV (4yr/80K) £7,269/32% Fuel cost (ppm) 8.46 AFR (ppm) 12 Running cost (4yr/80K) 31.12

By Maurice Glover ustomers have played a key role in helping Nissan make sure its next new car wins the same showroom success as its smash-hit predecessor when it goes on sale this month.

Marketing officials from the manufacturer spent five years pinpointing the improvements Qashqai owners expected from the next-generation version.

Hundreds of interviews led to drivers in Britain, Germany and France being sworn to secrecy when they saw the company’s plans for the car two years ago.

“We asked for their views about our aims for styling, pricing and specification and feel we reached the perfect package – I think the result re-invents the C-segment crossover,” said Nissan Motor GB marketing director Guillaume Masurel.

The research has resulted in a longer and wider car.

Improved appearance and more substantial and upmarket styling go with added refinement from a 40kg weight reduction. Noise levels are cut by improved aerodynamics and higher manufacturing quality.

All power units in the new range boast upgrades in efficiency and performance, but none more so than the 1.5-litre dCi motor. The reworked unit makes the Qashqai the only car in its segment to offer 99g/km and 74mpg economy; improvements of 24% and 29% respectively.

“We think we have a terrific proposition for business users, especially as it comes with lower maintenance costs and 20% reduced insurance premiums,” said product manager Niels Van Der Burg.

“But higher residuals are the icing on the cake and the

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32 ❚ Spring 2014 ❚ www.mydrivingbusiness.co.uk

SPEC Power (hp)/torque (lb-ft) 110/192 CO2 (g/km) 99 Fuel efficiency (mpg) 74.3 Top speed (mph) 112 0-62mph (sec) 12.4

KEY RIVAL Hyundai ix35 1.7CRDi Premium P11D price: £22,400 BIK tax band 24% Annual BIK tax (20%) £1,075 Class 1A NIC £742 Annual VED £140 RV (4yr/80k) £8,050/36% Fuel cost (ppm) 12.48 AFR (ppm) 14 Running cost (4yr/80k) 34.94ppm

Running cost data supplied by KeeResources (4yr/80k)

Manufacturing quality is improved 50% prediction we’ve been given after three years should help us offer very competitive monthly rates.”

Accenta Premium replaces the 360 trim level and provides dual-zone climate control, alloy wheels, DAB radio, rear-view camera, parking sensors, push-button start and a panoramic sunroof as standard. Also included is traffic sign recognition, front collision avoidance, high beam assist and lane departure technology.

Comfortable and easy to drive, the revitalised dCi unit feels relaxed on motorways with high gearing achieving 70mph at only 2,000rpm.

It may have the most sedate acceleration rate of all the engines on offer, but the 1.5-litre Acenta Premium is capable of maintaining a brisk pace and handles with surprising agility for a ‘tall’ body design that allows space for five and maximum loading versatility.

Just 47mm longer and 20mm wider, it feels noticeably bigger and has greater headroom despite a 15mm reduction in height. Boot space is also increased by 20 litres to 430 litres.

Consistently popular since it arrived seven years ago, the new Qashqai carries styling cues from the original, but sets a benchmark in convenience, safety, reduced running costs and equipment levels. Small wonder that company cars are expected to account for 55% of sales.

w w w.mydrivingbusiness.co.uk

New Transit offers up to 11% more loadspace than its predecessor

350 L2 H3 125

FORD TRANSIT

Successor to UK’s best-selling van offers more space and lower running costs NEED TO KNOW

COSTS

■ New Transit available in 450 variants ■ 3,000 orders already placed ■ Prices start at £20,795 ex-VAT

Price (ex-VAT): £25,895 RV (4yr/80K) £9,980/38% Fuel cost (ppm) 17.4 Running cost (4yr/80k) 41.21ppm

By Trevor Gehlcken ord has split the old Transit range into two models. The smaller van, the Transit Custom, launched last year, weighs in at 2.6 to 3.0 tonnes gross vehicle weight (gvw) and received a warm reception.

Now it’s the turn of the bigger Transit. Not only is it a completely new model, but Ford is planning to sell it globally for the first time – in 118 different markets.

A mind-boggling 450 new variants will be on offer and will be rolled out between now and the end of the year.

Three thousand orders have already been placed.

With prices starting at £20,795 ex-VAT, the Transit is available in front-, rear- and all-wheel drive at weights of between 2.9 and 4.7 tonnes. A single 2.2-litre turbodiesel powerplant offers 100hp, 125hp and 155hp. There is also the choice of new HDT6 engines at 125hp and 155hp which meet the Euro 6 emissions standard, although these use an additional AdBlue tank, which will have to

F

Stylish and innovative – the all-new cabin

SPEC Gross vehicle weight (kg): 3,500 Power (hp/rpm): 125/3,000 Torque (lb-ft): 258/1,450 Load volume (cu m): 11.2 Payload (kg): 1,488 Comb fuel economy (mpg): 38.7 CO2 emissions (g/km): 194

KEY RIVAL Mercedes-Benz Sprinter 313 CDI MWB High Roof Price (ex-VAT): £27,664 Gross vehicle weight (kg) 3,500 Power (hp/rpm): 129/3,800 Torque (lb-ft/rpm): 225/1,200 Load volume (cu m): 10.5 Payload (kg): 1,243 Comb fuel economy (mpg): 33.6 CO2 emissions (g/km): 222

Running cost data supplied by KeeResources (4yr/80k)

be filled at regular intervals. Econetic versions feature stop-start technology and a speed limiter. These help increase the official combined fuel economy figure to 44.1mpg – 6% higher than the outgoing Econetic model.

Three lengths and two roof heights are available, with load volumes from 9.5 to 15.1 cubic metres and the usual body choices such as chassis-cabs, box vans, lutons and minibuses, all of which can be ordered from the dealer.

There are two trim levels – Base and Trend – and both feature electronic stability control as standard. Trend adds a heated windscreen, fog lamps, cruise control, leather-trimmed steering wheel, Ford’s Sync system with emergency assistance and front and rear parking sensors.

The new Transit offers up to 11% more loadspace than the old model. The side loading doors have been enlarged for easier loading with a forklift.

Ford has put a lot of work into lowering maintenance costs. Service intervals are now two years/30,000 miles and the maintenance time in the garage has been cut over 90,000 miles from 5.4 to 4.2 hours. Ford is setting up 110 special Transit Centres across the UK from its 200-strong dealer network and this van can be ordered only from one of these new sites.

It isn’t until you climb in that the real differences between this and the old model become clear. The cab is new and abounds both with style and practical innovations.

The dashtop storage compartment complete with 12-volt take-off is carried over from the old model. There is a handy overhead storage shelf, a fold-down desk in the back of the middle seat and a huge stowage area under the outer passenger seat.

Our drive was in the 125hp long wheelbase high roof variant. This Transit is as close as you’ll ever get to driving a big car. Squeaks and rattles are totally nonexistent and even with a half-load on board, the engine glided us effortless round the test drive route.

Forty-eight years at the top of the tree – with new models like this, Ford can confidently look forward to many more years of success. www.mydrivingbusiness.co.uk ❚ Spring 2014 ❚ 33

■ C ARS

HONDA CIVIC TOURER

1.6 I-DTEC S

Civic returns to the estate sector with clean, comfortable and efficient compact

Upmarket styling and a 40kg weight reduction

NEED TO KNOW

COSTS

■ On sale now with diesel priced from £21,320 ■ CO2 emissions from 99g/km ■ 74.3mpg average fuel efficiency

P11D price £21,320 BIK tax band 14% Annual BIK tax (20%) £597 Class 1A NIC £412 Annual VED £0 RV (4yr/80K) n/a Fuel cost (ppm) n/a AFR (ppm) 12 Running cost (4yr/80K) n/a

By Alisdair Suttie t has been 12 years since Honda last offered a Civic estate, but with increased sales in this sector the Civic Tourer is a timely addition and rival to the likes of the Ford Focus Estate, Vauxhall Astra Sports Tourer and Volkswagen Golf Estate.

Honda estimates it will sell about 1,500 Civic Tourers a year to company users, almost all with the 1.6-litre turbodiesel engine. This offers 99g/km CO2 emissions and 74.3mpg average fuel efficiency and starts at £21,320.

Several rivals can match the Tourer for efficiency and emissions, but the Civic has a few other tricks in its boot.

Honda claims it offers the largest capacity in this class, at 624 litres. However, 117 litres of this is in a separate compartment under the boot floor, which means it may not be as usable as some of the competition’s.

The upside is it offers hidden storage that easily copes with a couple of small suitcases, so stashing laptops or other valuables is a cinch.

Folding the 60/40 split rear seats of the Tourer is also easy, thanks to Honda’s ‘magic seat’ design. You can tip the rear seats forward to create a long, flat floor or fold the bases up for a sizeable load space between the front and rear seats.

As the Tourer is 235mm longer than the Civic hatch, it also frees up space under the load floor to easily store the boot cover. With all of the seats folded down the maximum load space is 1,668 litres.

As with the hatch, the 1.8-litre petrol is a little rowdy when pressed, so the 120hp 1.6-litre turbodiesel is the best bet all round. It’s quiet, pulls keenly and comes with a six-speed manual gearbox as the only option.

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34 ❚ Spring 2014 ❚ www.mydrivingbusiness.co.uk

SPEC Power (hp)/torque (lb-ft) 120/221 CO2 (g/km) 99 Fuel efficiency (mpg) 74.3 Top speed (mph) 121 0-62mph (sec) 10.1

KEY RIVAL Volkswagen Golf 1.6 TDI S P11D price: £20,745 BIK tax band 15% Annual BIK tax (20%) £622 Class 1A NIC £429 Annual VED £0 RV (4yr/80k) £5,925/29% Fuel cost (ppm) 8.66 AFR (ppm) 12 Running cost (4yr/80k) 30.07ppm

Running cost data supplied by KeeResources (4yr/80k)

117 litres of the Tourer’s 624-litre boot space is in a separate compartment under the floor The diesel is the only credible choice for business users thanks to its 99g/km emissions, helped by its crisp sixspeed manual gearbox. The petrol model has a slightly sharper steering response, while Honda’s adaptive damper system is standard on the top two trim levels.

It can be set to comfort, normal or dynamic settings, although we found normal ideal in all conditions.

There are also two optional safety packs, costing £780 and £2,500. The former is available on all Tourer models and has seven safety technologies including City Brake Active System, forward collision warning and CrossTraffic Monitor. The second pack is offered only on EX models to provide automatic cruise control and collision mitigation braking system.

In diesel form, the Tourer is quiet, competent and comfortable. While not as sharp to drive as the Ford Focus or VW Golf estates, it is an ideal long-distance machine that can carry plenty of cargo. The petrol is a little more engaging to drive, but a noisy engine soon takes the shine off this slim advantage.

The Honda Civic Tourer has the credentials to be a strong contender in the small estate sector thanks to its load space and a versatility none of its rivals can better.

Low CO2 emissions and good fuel economy combine with a comfortable and easy-going drive to make it a very rounded compact estate.

w w w.mydrivingbusiness.co.uk

Ghibli looks rather more special than a typical executive saloon

MASERATI GHIBLI

3.0D V6 AUTO

Saloon combines allure of 100 years of heritage with competitive running costs NEED TO KNOW

COSTS

■ Maserati targets user-choosers with new Ghibli ■ New diesel engine with 275hp and 158g/km CO2 ■ Fixed-price servicing package on offer

P11D price £48,600 BIK tax band 26% Annual BIK tax (40%) £5,054 Class 1A NIC £1,744 Annual VED £175 RV (4yr/80K) £13,426/28% Fuel cost (ppm) 13 AFR (ppm) 17 Running cost (4yr/80K) 68.64ppm

By Simon Harris he market for high-end saloons is dominated by the German premium brands.

Jaguar, perhaps in the UK more than anywhere else, is seen as a suitable alternative, while Lexus is for those who like hybrids (and perhaps dislike diesel). Infiniti still struggles to appear on the radar for business drivers.

So new entrants to the market can take a long time to build recognition, credibility and trust.

That Maserati wants a slice of the executive saloon market could raise a few eyebrows. But unlike the newer premium Japanese brands, Maserati has 100 years of heritage to draw on and is known for producing some of the most beautiful exotic cars ever made.

Under Fiat ownership since 1993, it is thriving under the stewardship of Fiat’s Ferrari division.

Maserati needs a presence as a company car option to meet its growth aspirations and the launch of its latest

T

The interior has a clean look

SPEC Power (hp)/torque (lb-ft) 275/420 CO2 (g/km) 99 Fuel efficiency (mpg) 74.3 Top speed (mph) 155 0-62mph (sec) 6.3

KEY RIVAL Mercedes-Benz CLS350 3.0CDI AMG Sport P11D price: £54,010 BIK tax band 27% Annual BIK tax (40%) £5,833 Class 1A NIC £2,012 Annual VED £175 RV (4yr/80k) £13,191/24% Fuel cost (ppm) 13.45 AFR (ppm) 17 Running cost (4yr/80k) 73.43ppm Running cost data supplied by KeeResources (4yr/80k)

model, along with its first diesel engine, means about 500 Ghiblis will end up with user-choosers this year.

It certainly looks rather more special than a typical executive saloon, although from some angles it does seem to have similarities with the latest Infiniti range.

The interior has a clean look with most of the ancillary controls located in the large touch-screen display (called Maserati Touch Control) that includes the screen for the reversing camera.

The display includes navigation, audio, ventilation and Bluetooth controls as well as controlling heating for the front seat and steering wheel, ventilation, and the optional rear window shade.

Leather seats are standard, while the dashboard is also upholstered and soft to the touch. The driver has six-way electric adjustment as standard.

The Ghibli diesel uses a 3.0-litre V6 engine producing 275hp. It’s designed and built by VM Motori – a diesel specialist in which Fiat has a 50% stake – and is related to the engines that power the Jeep Grand Cherokee and Chrysler 300C. However, in the Ghibli it has more power and to ensure it has the characteristic Maserati exhaust note there are sound actuators in the exhaust.

Performance is rapid enough – the power output is on a par with S versions of the Jaguar XF and a little higher than the Mercedes-Benz CLS 350 CDI. It comes with an eight-speed automatic transmission – the same ZF gearbox as used by BMW and Jaguar – which offers smooth changes and is responsive, although the self-centring gearstick feels a little odd at first.

The ride feels a little firm on roads that are less than perfect, although on smooth surfaces with fast sweeping bends, the Ghibli is in its element with both car and driver feeling connected. It certainly vies for honours with BMW as the driver’s choice in the sector.

Maserati has also worked hard to ensure its running costs are competitive and offers a fixed-price servicing package for further peace of mind. www.mydrivingbusiness.co.uk ❚ Spring 2014 ❚ 35

You know us for one thing.

Now know us for many.

Businesses have trusted us to provide market leading breakdown cover for many years. But today, we do so much more. RAC Business Services provide a range of innovative solutions to save you money and drive your business forward.

Call 0844 241 3023 to find out more or visit rac.co.uk/business

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