Van Excellence Review 2014

Raising standards, recognising excellence

The Van Excellence Review 2014Professionalising the UK van fleet

Industry Partners:

The Van Excellence Review 2014 © Freight Transport Association The Van Excellence Review 2014 © Freight Transport Association

Van Excellence is truly by the industry, for the industry.

It was born from a desire voiced by van operating members of FTA to demonstrate and share their sound operating practices. They wanted the public, legislators, customers and their peers to have confidence in their thorough standards of compliance and management of risk. They wanted to share their excellent operational processes with other operators to raise standards.

Van Excellence provides a best practice framework showing how to run vans safely and efficiently.

Van Excellence provides operators with a process to seek independent accreditation against these standards along with access to support guides and training.

Van Excellence is facilitated by FTA but its direction, standards and integrity comes from the industry with an independent Governance Group made up of van operators at the helm.

For more information please visit www.vanexcellence.co.uk, follow @vanexcellence on Twitter or email us at [email protected]

FTA is one of the UK’s largest trade associations and represents over 14,000 companies relying on or providing transport integration both domestically and internationally, to or from the UK. Our members include hauliers, freight forwarders, rail, sea and air freight operators, through to customers – producers, manufacturers, wholesalers and retailers. They cover all modes of transport – road, rail, air and sea. FTA members operate over 200,000 commercial goods vehicles on the roads in the UK; approximately half of the UK fleet. FTA members also consign around 90% of goods moved by rail and around 70% of goods moved by air and sea.

You can find more information at www.fta.co.uk, follow us on twitter.com/newsfromfta and join us on facebook.com/ftafb

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3The Van Excellence Review 2014 © Freight Transport Association The Van Excellence Review 2014 © Freight Transport Association

Contents

Professionalising the UK van fleet 5

A new era in cooperation 6

Van Excellence operators 8

Key findings 10

Chapter 1

An overview of the UK van market 12

Chapter 2 Regulation in the van market 20

Chapter 3

Vans and essential economic activity 24

Chapter 4

Operational challenges 30

Chapter 5

Solutions: professional fleet management 34

Chapter 6

Van Excellence: the industry’s solution 44

Conclusion 51

4 The Van Excellence Review 2014 © Freight Transport Association The Van Excellence Review 2014 © Freight Transport Association

Peter Fairlie, Group Sales Director at ATS Euromaster, says: “We’re a network built to support van fleets, so it’s a natural move for us to become the FTA’s Van Excellence Industry Partner for tyres and fast-fit. Every day we’re working with fleets to improve the efficiency of their service, maintenance and repair operations; supporting the Van Excellence code reflects our position as a major industry provider.”

ATS Euromaster is the largest comprehensive tyre distributor in Great Britain, operating from more than 340 service centres and backed up by the country’s largest mobile fitting fleet. The company is experienced in helping customers drive down operating costs, whilst improving tyre life, safety, uptime and fuel economy. Its detailed tyre analysis and expertise can help fleets to secure genuine improvements in efficiency – putting their hands right on the cost levers. Additionally, ATS Euromaster offers car and LCV operators a full range of service, maintenance and repair (SMR) solutions.

BT Fleet is proud to continue our support for the Van Excellence programme. We are perfectly placed to help van fleet operators with their day-to-day challenges; driver safety, operator compliance and peace of mind.

When one of your vans is out of service, your business and your customers pay the price. At BT Fleet we understand the true cost of downtime and have a relentless focus on getting vehicles back on the road.

Many of the UK’s leading organisations recognise the benefits of entrusting their vans to a specialist provider. So they choose BT Fleet leaving them to focus on their core business.

As a FTA Van Excellence Industry Partner you can already expect the highest levels of operational service, fleet support and customer service from Hertz. The FTA Van Excellence Code embodies the professional approach and high operational standards that Hertz delivers to its customers and this partnership supports our goal of raising standards in the industry.

We have combined over 90 years of rental expertise with the best talent in the commercial vehicle industry to guarantee the support and understanding of what our fleet customers expect, delivered via our dedicated nationwide van network.

It’s all about choice and flexibility at Hertz and we can offer a wide range of fleet options supported by a service shaped around your business. This includes bespoke vehicles, contingency vans, priority service response, full maintenance records, dedicated central fleet support, telematics, vehicle pooling technology and, of course, we also rent cars.

Hertz Vans – for your Van Excellence journey.

Marcus Puddy, Commercial Vehicle Director at Lex Autolease, says: “Lex Autolease is proud to become Van Excellence’s latest industry partner. The organisation’s goal of promoting high standards of best practice in van fleets is closely aligned with our own strategic objectives. As one of the UK’s largest

commercial vehicle providers, we are committed to helping businesses ranging from SMEs through to large corporates operate a safe and efficient van fleet on a daily basis.”

Lex Autolease fully support the Van Excellence scheme to help maintain high standards and promote best practice across van fleet operators. Companies all over the UK trust us to take care of their vehicle leasing – in fact, we’re responsible for 1 in 19 of the UK’s new light commercial vehicles registered in 2013.

Lex Autolease will work with you to understand all of your requirements – from design to specification, to funding and maintenance, so we can create a bespoke solution to match your business needs.

TomTom Telematics is proud to partner with FTA on Van Excellence. Together we strive to increase the awareness of high standards of best practice in van fleets, and become a catalyst for the adoption of these practices. At the core of this best practice is data, and getting real actionable insights from that

data, is what WEBFLEET is all about. By promoting excellence we help raise the standard and promote safe and efficient van fleets across all industry sectors.

With over 400,000 units across 60 countries, TomTom Telematics gives the visibility needed to maintain control of vehicles and drivers. Cutting cost, improving productivity, boosting customer service, complying with legislation and reducing carbon footprint through monitoring driver behaviour all help our customers run greener, safer and more efficient vehicles, and gives great return on investment.


Professionalising the UK van fleet

In the four years since the Van Excellence programme was launched, it has captured the imagination of the commercial vehicle sector and attracted a determined and dedicated membership of professional fleet operators and loyal suppliers determined to raise standards, provide leadership and dispel the myths about one of the most ubiquitous, but least understood, of all commercial activities.

With over 80 accredited members, and more joining by the week, Van Excellence has established itself as the voice of professional van fleet managers and the brand for responsible and sustainable van operation. Born out of a wish to avoid bureaucratic regulation and to enhance the reputation of the sector, Van Excellence has succeeded in showing that high standards of operation and their consistent achievement do have a home in the sub-3.5-tonne vehicle sector even though they are not formally

licensed and escape most of the specific legislative requirements imposed on trucks.

The Van Excellence Review sets out the achievements and ambition of all those involved in the programme. From the farsightedness and pioneering spirit of Van Excellence chairman, Rory Morgan, and the other early adopters of the scheme, to the commitment and dedication of Mark Cartwright, head of vans at FTA who has been the driving force behind Van Excellence permeating all parts of the van sector.

Credit is also due to the early leadership and guidance provided by Gary Whitham, formerly head of sales at Ford, and a lifelong champion of the van sector, long before its economic significance was widely recognised. Gary was the first chair of the Van Excellence Governance Group, the committee of accredited members that collectively devised the Van Excellence Code – the accreditation standard at the heart of the scheme. The early success and recognition of Van Excellence owes a lot to his vision and motivation.

Every operator that achieves Van Excellence status is a hero, partly for persevering through the sometimes demanding bureaucracy that comes with any scheme that asks you to prove your claims to good practice, but also for deciding to take a stand and put what they do to the ultimate test – the scrutiny of their peers. This review is a salute to all involved and a tribute to the progress made in the pursuit of excellence.

James Hookham Managing director – membership and policy Freight Transport Association


This year has marked a new era in cooperation between the police and the freight industry. At my keynote address to the FTA’s Van Excellence conference last March, I emphasised the police’s desire to work together with the Van Excellence community to tackle criminal behaviour, promote safer roads through habitual compliance (especially in terms of roadworthiness and sound driver behaviour) and ultimately enhance public trust and confidence as a result of these achievements.

Our national approach is based on two salient elements: security and safety.

Security is about denying criminals the use of our roads. We will use every means at our disposal, including information and help from the freight community, to remove the illegal, unsafe or criminal element from public carriageways. An intelligence-based

approach is at the heart of our move from traditional traffic officers to modern roads policing practitioners. We are particularly proud of our successes around Organised Crime Groups (OCGs) which target commercial vehicles and their loads. Our operations range from those who remove catalytic converters from your parked vehicles, to those who steal your vans without the use of keys. Through close links with partner agencies and local forces, we are able to identify the times and locations most favoured by these offenders and put in place measures to ensure we catch them.

Ensuring everybody gets home safely every day is very important to us. We believe safety is intrinsically linked with habitual compliance with the law. Safety and compliance are cultural values as well as practical ones, a state of mind and a shared understanding as much as they are practices and procedures. Through the use of targeted patrols and enforcement campaigns, we aim to educate and, where necessary, prosecute offenders whose actions endanger themselves and others. Our staff are encouraged to use their professional judgement and discretion with the ultimate goal of habitual compliance. While acknowledging we still have a long way to go, engaging with the motoring community is a great opportunity to publicise our road safety messages.

There are five main areas today’s roads policing officers target to ensure safer roads. These ‘fatal five’ are speeding, alcohol/drugs, careless/dangerous driving, seat belts and use of mobile phones. Four hundred people a year lose their lives in crashes where someone either drives in excess of the speed limit or too fast for the road conditions. Around 280 people die each year in collisions where someone has been over the legal drink-drive limit. Three hundred deaths can be attributed to someone being ‘careless, reckless or in a hurry’. Two hundred lives could be saved each year if everybody wore their seat belts. Finally, around 22% of crashes are caused by drivers’ inattention and/or distraction, one major source of this being people using their mobile phones.

So how can Van Excellence and the police working together help you? The UK van fleet currently accounts for almost 3.4 million vehicles. Van Excellence has so far accredited 110,000 vehicles with a further 120,000 working towards accreditation. That should mean 220,000 compliant vans on the road. In terms of us putting

A new era in cooperation

7 The Logistics Report 2013 © Freight Transport Association 7The Van Excellence Review 2014 © Freight Transport Association The Van Excellence Review 2014 © Freight Transport Association

our resources to best use, it frees up operational staff to target those fleet operators and owner-operators who continue to flaunt the law and evade the financial cost of ensuring their vehicles are roadworthy.

But it is more than just trying to ensure all vans on the road are roadworthy and their drivers responsible. The future offers fresh opportunities for greater police engagement with the transport industry especially around intelligence. Every driver on the road is a pair of eyes and a pair of ears which will inevitably be aware of suspicious incidents and even crimes taking place. Drivers’ testimony can be supported by the information recorded in the growing number of cab cameras fitted to fleets. It is really important that we capture this information and can use it effectively to do the right thing.

We believe that working with Van Excellence members and partners is a great step towards making this happen.

I look forward to reporting back to you at the Van Excellence Conference 2015 about what we have achieved in our first year of working together to make British roads safe and secure.

Superintendent Paul Keasey Chair of the National Road Policing Intelligence Forum & UK European road policing lead


Key findingsVan Excellence operators


Van Excellence operators


Key findingsKey findings

The UK van market has 3.4 million vehicles. It is the fastest growing market in the automotive sectorVan sales correlate closely with GDP, as they reflect both commercial activity and the level of start-ups and expansionNew vans are increasingly cleaner, more fuel-efficient and more robust with a higher level of safety features and better payloadVans are most heavily used in the following sectors: construction, utilities and infrastructure maintenance, retail and parcel delivery. The strong growth in e-retail is driving both the retail home delivery and the parcels sector and encouraging new methods of use and fleet structureVan drivers are covered by the domestic drivers’ hours rules but are usually not vocational drivers. Below 3.5 tonnes, they are not covered by ‘truck’ regulations such as operator licensing, EU drivers’ hours rules and tachograph regulationsThe van market is predominantly below 3.5 tonnes gross vehicle weight (ie total laden weight). Below 3.5 tonnes the roadworthiness of vans is not covered by the kind of strict regulation that governs trucks. Instead, like cars, they must comply with MOT regulation, be insured and are subject to standard expectations of corporate responsibilityThis lack of regulation gives great operational flexibility. However, it must be combined with expertise to ensure safety and efficiencyStrong growth in the van market is expected for 2014 (11%) but current predictions suggest slight contraction in 2015 (down 0.8% on the 2014 forecast volume)Given the depressed sales during the recession and the strong demand for LCVs (light commercial vehicles) in 2014, there is a significant supply gap in the used marketplace. Second-life vehicles are coming to market older, with higher mileages and yet are worth considerably more than in previous yearsThe leasing and rental sector controls more than 509,000 LCV assets. At 15% of the total van fleet this is considerably lower than the sector’s 40% proportion of the HGV fleet. However, this sector nonetheless has interaction with fleets of all sizes from the largest to one-man bands and, as such, can be a powerful influence on standards of professionalismThe Sewells Research and Insight report (2014) identifies the top 200 van fleets as controlling just 9% of the vehicle parc. It is a much more diffuse market than HGVs

There are repeated calls for more stringent or HGV-style regulation of the van market. However, so far cost-benefit analysis has never yielded a positive case for such a regimeVans are already regulated as tightly as cars and, in some areas, with more extensive restrictions, such as with speed limits. However, there are inconsistencies within the scope of the law which can cause confusionAs van fleets operate in different ways and serve different purposes to HGV fleets, it is not appropriate to impose the same style of regulation. However, there is a genuine and concerning knowledge gap between van fleets and HGV fleets, which is most appropriately addressed by industry education and the market insisting upon raised standards

TheMarket

LegislativeReview


Key findings

The use of van fleets is split between the delivery of freight (carrying vehicles) and the delivery of expensive assets, such as engineers and tools to the point of service (service vehicles)The lading factor, or percentage of payload used, is therefore not a useful measure for van efficiency. Vans must be gauged in terms of suitability and efficiency to their taskIt is possible to optimise the performance of both service and carrying LCVs through technology such as routeing and scheduling or telematics. However, there is only a 20% market penetration for such technologiesSafe loading and adherence to weight limits is of ongoing concern to van operatorsThe use of non-professional drivers, free from the requirements of ongoing professional development (such as the Driver Certificate of Professional Competence), means that driver training can be overlooked, losing its safety, fuel efficiency and emissions benefitsThese non-professional drivers nonetheless face a substantial riskThere is a distinct and significant gap in knowledge and systems between the management of HGV fleets and that of van fleets, which has implications for vehicle MOT failure rates, road safety and cost controlWhile this gap must be addressed, it seems likely that education and market forces will be more cost-effective, wide-reaching and powerful tools for change than regulation

Van Excellence is a code-based audit scheme which offers self-regulation, the sharing of best practice and external validation for professionalism in the UK van fleet. It aims to close the professionalism gap between HGV and van fleetsIt has numerous benefits including: leadership and influence; cost control; market differentiation; improved safety; commercial and operational streamlining; brand assurance; and the potential to collectively raise standards, improve safety and lower costVan Excellence’s true power will be in the advocacy and brand champion activities of accredited members, who are seeing suppliers, subcontractors and customers influenced and attracted to the process in their own right. It is market regulation by the mantra: inspire, recommend, mandate

OperationalChallenges

VanExcellence

“The annual risk of dying in a road accident while driving for business reasons is significantly greater than the risk

of dying as a result of all other workplace accidents. Between 800 and 1,000 people are killed annually in work-

related road traffic accidents compared to approximately 250 fatalities due to accidents notified annually“

TUC

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An overview of the UK van marketThe UK van parc consists of 3.4 million vehicles. It includes a diverse range of vehicles including lightweight car-derived vans, and small and large panel vans. The typical weight range is from one tonne gross vehicle weight (gvw) to six tonnes. The heaviest van on the market today is a seven-tonne offering from Iveco. However, the vast majority of LCVs are below 3.5 tonnes.

One in 10 vehicles on UK roads is a light commercial. Department for Transport (DfT) statistics on vehicles by tax class (VEH0103) suggest LCV numbers have increased by 24% over the past decade.

Vehicles over 3.5 tonne gvw enter the arena of operator licensing and strict professional regulation for drivers and, for governmental purposes, are therefore counted alongside heavy goods vehicles (HGVs) rather than light commercial vehicles (LCVs) or vans.

This licensing of heavy goods vehicles is necessary for public safety.

However, it is not necessary in the same way for vans. They typically do far lower mileages and they also lack the momentum and mass which makes heavier trucks more dangerous in a collision.

The lack of regulation around van fleets is a huge operational advantage for operators. It makes the financial and administrative barrier to entry much lower; it allows the vehicle to stay with its driver which gives better customer response times; it makes driver recruitment

easier and allows those with other core professional skills to drive a van without the need for vocational training.

Therefore many van operators deliberately work as close to the 3.5-tonne gvw limit as possible to maximise the vehicle’s utility without triggering the operational restrictions of regulation.

Hence, although vans over 3.5-tonnes are a legitimate and important part of the market, they are a very small percentage of the UK van parc. While new registrations for sub 3.5-tonne vans exceed 200,000 units a year, those exceeding 3.5 tonnes account for approximately 7,000 annual sales.

This 3.5-tonne to 6.0-tonne market will suffer further once the Driver CPC qualification becomes mandatory in September 2014. Drivers who acquired their car licence prior to 1997 were entitled to drive up to 7.5 tonnes. Although this was not available to drivers qualifying after 1997, the former group retained ‘grandfather rights’ and the logistics industry in particular has adapted to accommodate many non-vocational drivers on 7.5-tonne vehicles.

However, on 10 September 2014 these drivers will be licensed but no longer qualified to drive a vehicle over 3.5 tonnes on business unless they have a Driver Qualification Card (DQC).

This development may further suppress the popularity of vans over 3.5 tonnes and also remove a number of van drivers from the lighter end of the logistics industry.

Why is the van market significant? The van is a vitally important and versatile tool for modern businesses, possibly second only to the computer in its diversity of application and sectoral adoption. Local authorities, utilities companies, infrastructure and facilities maintenance, engineers, delivery firms, tradespeople and most small retail, trade or craft companies will employ vans to deliver goods or assets to the point of service. With the growth of e-retail and home delivery, the importance

CHAPTER 1

The Van Excellence Review 2014 © Freight Transport Association The Van Excellence Review 2014 © Freight Transport AssociationThe Van Excellence Review 2014 © Freight Transport Association The Van Excellence Review 2014 © Freight Transport Association

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An overview of the UK van market

of vans has grown even further, with major retailers, who once focused on HGV fleets delivering to distribution centres and stores, now having extensive, national van fleets as well.

With such a wide distribution throughout the UK economy, and such an essential role in facilitating the economic activity of users, vans are also an essential barometer of economic health. The numbers of new registrations reflect confidence in asset acquisition and contract strength, and there is a distinct correlation between van acquisition and GDP. It is often said the first asset many start-ups buy is a van; therefore LCV registration figures also reflect the level of entrepreneurial zeal present in the market at any one time.

It can be seen that while vans dominate in terms of vehicle numbers and miles travelled, they carry less than 20% of freight. For pure freight trunking, HGVs are a much more fuel and road-space efficient choice. However, LCVs offer better access to a wide range of locations, lower operational cost and the benefits of non-specialist, non-regulated operation.

New registration rates in the UK van marketThe correlation between LCV registrations and GDP can clearly be seen if we plot ‘new registration’ figures alongside aggregate GDP from 2007 to 2013.

There has clearly been a strong correlation between GDP and van registrations over the past seven years. The van market shows great volatility in response to changes in GDP – the figures show that a decline of 5.2% in GDP in 2009 was reflected in a cut of 34% in van registrations. Equally in 2010, 2011 and 2013 GDP growth of between 1% and 2% led to new van sales of between 13% and 20%.

While other factors such as the availability of finance, and the effects of van availability on price, will have formative influences on the final purchase figures, it is clear that van registration figures are highly indicative of economic health.

As can be seen from figure 1.1 (page 14) there is some variation in forecasts for 2014 and 2015, depending on how the vehicles are categorised.

2015 sales of new vehicles are currently projected to be lower than for 2014; this reflects uncertainty about the continued rate of economic growth and potentially the impact of Euro-6 emissions legislation coming into force for the LCV market.


TABLE 1.1 • Mileage and freight levels compared to HGVs

Vans and HGVs serve very different markets

Total numbers 3.4 million 386,000

Total billion miles (km) 42.9 (69) 15.7 (25.2)

Percentage of total miles 78.11% 21.89%

Freight moved (billion kg miles) 19,743 116,180

Percentage of road freight currently moved

14.5% 85.5%

Source: Department for Transport annual road traffic statistics/FTA

TABLE 1.3 • 2014 registration figures and forecasts

Year Registration figures Forecasts

2013 271,073 +13.1%

2014 301,300 +11.2%

2015 299,000 -0.8%

Source: SMMT April LCV forecast

TABLE 1.2 • LCV registrations since 2009 vs annual GDP growth as percentage

Year New registrations GDP Percentage change in registrations year

on year

2007 337,741 3.4 –

2008 289,463 -0.8 –14.3%

2009 186,386 -5.2 –35%

2010 222,915 1.7 +19.6%

2011 260,153 1.1 +16.7%

2012 239,641 0.3 –7.8%

2013 271,073 1.7 +13%

Sources: LCV registration figures are from SMMTAnnual GDP growth figures are from The World Bank http://data.world-

bank.org/indicator/NY.GDP.MKTP.KD.ZG?page=1

TABLE 1.4 • June 2014 registration figures and percentage change on 2013

June%

changeYear-to-

date%

changeRolling year

% change

Vans 30,712 33.3% 155,532 16.8% 293,428 16.0%

Trucks 3,229 –19.2% 16,436 –22.9% 51,334 18.8%

Total 33,941 25.5% 171,968 11.3% 344,762 16.4%

Source: SMMT

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FIGURE 1.1 • New registrations in the UK van market

Van

Unclassified

SUV

Pickup

Lower medium

Small

Basic

20152014

COUNTRY SEGMENT 2014 2015Basic 586 830 Small 10425 8270 Lower Medium 451 848Pickup 30951 29265SUV 7195 6569Unclassified 1939 1610Van 246143 250932 Total 297,690 298,324

Total registrations 298,324

297,690

Source: LMC Automotive

Registration figures taken at the half-year point for 2014 show even greater growth than anticipated.

❚ SMMT comments that: “Total commercial vehicle registrations rose 25.5% in June to 33,941; rolling year up 16.4% to 344,762

“The ‘van market’ maintains impressive growth with registrations up 33.3% in June, causing year-to-date volumes to increase 16.8% to 155,532 and rolling year up 16% to 293,428”

❚ The success in van sales is particularly stark against the ongoing decline in truck sales, which are showing the effects of late 2013 purchases intended to mitigate the effects of Euro-6 legislation

What was the market peak?Today’s market has not recovered the peak volumes of 337,000 vehicles registered in 2007. However, the effect of recession is never singular ; while the 2008-10 downturn reduced the vehicle parc substantially, it also honed the market and made vehicle utilisation and cost control a strong focus for fleet managers.

As the market inches back towards 2007 levels, its lower figures will nonetheless mask better sweated assets on longer replacement cycles.

Strong GDP growth (3.1% in Q2 2014 against the same period in 2013), would suggest strong new vehicle registrations going forward.

New vehicle designOver the past decade vans have been engineered to run more efficiently in terms of fuel and emissions, but also to be more practical and versatile operationally. This has manifested itself in better fuel economy, more robust body builds and lighter weights with increased payload or load space.

2014 has seen a record number of van launches. The April 2014 CV Show saw, among others, Mercedes display the small Citan and the more substantial (Euro-6) Sprinter ; Iveco display its newly designed Daily panel van; the Citroën Berlingo Electric; the new Citroën Relay large panel van; and, at the bijou end of the market, Mini presents its MiniClubvan.

“The new Transit is a league away from our original offerings. It’s engineered to be more

car-like; it has better trim and equipment; it’s simply much better”

Ford spokesperson


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TABLE 1.5 • Commercial vehicles <3.5t

Marque June 14 % June 13 % % change YTD 14 % YTD 13 % % change

FORD 7,995 26.03 6,098 26.47 31.11 37,027 23.81 34,462 25.88 7.44

VOLKSWAGEN 3,839 12.50 3,246 14.09 18.27 20,702 13.31 18,624 13.98 11.16

PEUGEOT 2,971 9.67 1,541 6.69 92.80 16,140 10.38 9,972 7.49 61.85

VAUXHALL 2,881 9.38 2,610 11.33 10.38 15,853 10.19 15,139 11.37 4.72

CITROEN 2,549 8.30 1,910 8.29 33.46 14,011 9.01 11,294 8.48 24.06

MERCEDES 2,902 9.45 2,128 9.24 36.37 12,670 8.15 10,373 7.79 22.14

RENAULT 2,224 7.24 1,379 5.98 61.28 9,164 5.89 5,578 4.19 64.29

NISSAN 1,231 4.01 757 3.29 62.62 6,058 3.90 5,805 4.36 4.36

FIAT 894 2.91 974 4.23 -8.21 6,010 3.86 5,951 4.47 0.99

TOYOTA 1,045 3.40 705 3.06 48.23 5,301 3.41 4,285 3.22 23.71

LAND ROVER 735 2.39 563 2.44 30.55 4,132 2.66 3,418 2.57 20.89

MITSUBISHI 518 1.69 398 1.73 30.15 3,113 2.00 3,116 2.34 -0.10

ISUZU 410 1.33 222 0.96 84.68 2,448 1.57 1,962 1.47 24.77

IVECO 246 0.80 257 1.12 -4.28 1,352 0.87 1,676 1.26 -19.33

OTHER IMPORTS 79 0.26 35 0.15 125.71 467 0.30 193 0.14 141.97

RENAULT TRUCKS 54 0.18 28 0.12 92.86 292 0.19 169 0.13 72.78

MINI 46 0.15 69 0.30 -33.33 241 0.15 354 0.27 -31.92

GREAT WALL 14 0.05 91 0.39 -84.62 158 0.10 362 0.27 -56.35

ISUZU TRUCKS 35 0.11 1 0.00 3400.00 106 0.07 110 0.08 -3.64

HYUNDAI 13 0.04 14 0.06 -7.14 103 0.07 163 0.12 -36.81

SSANGYONG 14 0.05 14 0.06 0.00 94 0.06 86 0.06 9.30

MITSUBISHI FUSO 17 0.06 1 0.00 1600.00 89 0.06 85 0.06 4.71

MIA 0 0.00 0 0.00 0.00 1 0.00 0 0.00 0.00

Total LCV 30,712 100.00 23,041 100.00 33.29 155,532 100.00 133,177 100.00 16.79

TABLE 1.6 • Commercial vehicles >3.5t and <6.0t

Marque June 14 % June 13 % % change YTD 14 % YTD 13 % %change

FORD 63 13.32 244 45.86 -74.18 1,141 31.28 1,321 39.36 -13.63

MERCEDES 123 26.00 127 23.87 -3.15 949 26.01 777 23.15 22.14

FIAT 109 23.04 67 12.59 62.69 546 14.97 590 17.58 -7.46

OTHER IMPORTS 50 10.57 10 1.88 400.00 281 7.70 69 2.06 307.25

IVECO 40 8.46 37 6.95 8.11 223 6.11 218 6.50 2.29

VOLKSWAGEN 31 6.55 22 4.14 40.91 205 5.62 158 4.71 29.75

PEUGEOT 41 8.67 10 1.88 310.00 180 4.93 82 2.44 119.51

VAUXHALL 8 1.69 8 1.50 0.00 73 2.00 44 1.31 65.91

RENAULT 7 1.48 6 1.13 16.67 35 0.96 79 2.35 -55.70

NISSAN 1 0.21 1 0.19 0.00 7 0.19 10 0.30 -30.00

ISUZU TRUCKS 0 0.00 0 0.00 0.00 6 0.16 6 0.18 0.00

CITROEN 0 0.00 0 0.00 0.00 2 0.05 0 0.00 0.00

RENAULT TRUCKS 0 0.00 0 0.00 0.00 0 0.00 2 0.06 -100.00

Total HGV 473 100.00 532 100.00 -11.09 3,648 100.00 3,356 100.00 8.70

Source: SMMT van registration figures June 2014


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Perhaps the most telling launch was the newly designed Ford Transit family, which now starts with the smallest Transit ever offered, the Courier. With an unladen weight of 1.15 tonnes, a payload up to 660kg and space for a standard Europallet, this is an example of classic van design coming down in size and becoming more car-like, yet with better operational flexibility. The New Transit family also offers the Transit Custom and the Transit Connect to broaden the appeal to the widest spectrum of sizes and needs.

This is typical of the van manufacturers’ strategies and the market’s expectations: better engineered with fuel economies that rival cars, and offer sufficient volume and weight to meet commercial need.

Used vehicle marketAt the end of their first life, vehicles typically pass from fleets either directly, or through a lease company, to an auction house, thence a trade buyer and finally an end user. The average age at scrappage is 11 years and most vans will have four owners.

Typically fleet vehicles are disposed of in cycles and remarketing is a specialist, outsourced activity. The two largest defleeting operations and auction houses in the UK are Manheim and British Car Auctions (BCA).

Auctions are not only important sites for fleets to recover some measure of capital spend but they are an important source of ex-fleet vans for small traders without the capital to buy new.

The ages and mileages which have become typical of the used van market are not only indicative, therefore, of current operational realities but also of the operational challenges around roadworthiness and vehicle reliability faced by second-life owners.

The used vehicle market illustrates many of the points already developed in this review.

High demandDemand is so strong that vehicles at auction are costing more despite being older with higher mileages. Manheim reports that over the five years between 2009 and 2014, van ages for LCVs offered at auction have increased by 10 months (53 months to 63 months); mileage has increased by 14,000 miles (70,000 miles to 84,000 miles); and, despite this higher use profile, price has increased by £1,891 or 69%.

If we break this down further, car-derived vans show the same pattern. One-third of these vans are released into the used market after standard three to four-year contract leases; 40% before five years; and 38% after five years. Overall the pattern is again of greater age, higher mileage and increased value. (Age: + five months (53m to 58m); mileage: +13,000 miles (60,000 miles to 73,000 miles) and price: +£1,559 or (83%).

The small panel van shows an age increase of +18m (50m to 68m), 16,000 miles more mileage (67,000 miles to 83,000 miles) and a higher price by £1,343 or 43%.

The large panel van shows, on average, an extra eight months on entering second life (52 months compared to 60 months); 19,000 extra miles on the clock (82,000 in 2009 compared to 101,000 in 2014) and a price increase of £1,920 or 63%.

“Payload is what matters to customers”

Ford spokesperson

“Over the eight years between 2006 and 2014, we have seen used van prices increase by

42% on average. These vehicles are older and have done higher mileages than their 2006

counterparts, yet are still worth more”

James Davis director of commercial vehicles, Manheim Remarketing


17


Residual values are boosted substantially by professional fleet management during the vehicle’s first life. Although a certain amount of superficial damage is to be expected, preventive maintenance, cleanliness, and protective measures such as interior linings, external wrapping and reversing sensors help maintain the asset’s value.

Manheim says it can foresee a point at which vehicles which have been in Van Excellence fleets will be considered worth more at resale.

The supply gapWhile some of the increased value of stock is driven by a lack of availability, Manheim nonetheless says the majority is demand-led. However, strong demand coupled with the low levels of new vehicle registrations seen during recessionary years mean the levels of product available to come into the used market are likely to be substantially lower in 2014, 2015 and possibly beyond. The height of new vehicle sales was in 2007 and those vehicles will already have passed through the secondhand channels.

This supply gap caused by low levels of new vehicle sales in 2009 will be exacerbated by the longer length of time, on average, that these vehicles will now take to come to market. Fleets are extending vehicle life (a pattern which began during the recession when capital expenditure was limited) and have found that the higher levels of engineering and vehicle resilience now typical of the market can support the increasing ‘sweating’ of the asset without maintenance and fuel penalties. Therefore this extended first life is likely to remain a trend.

FIGURE 1.2 • Light goods vehicles registered for the first time by keepership*, Great Britain, annually: 2001 to 2013

0

50

100

150

200

250

300

350

Company registration

Individual registration

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

Source: DVLA/DfT

FIGURE 1.3 • Licensed light goods licensed by keepership*, Great Britain, annually: 2001 to 2013

Company registration

Individual registration

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

Source: DVLA/DfT

*Keepership refers to who the registered keeper of the vehicle is. This might differ to the owner.

“BCA grades vehicles between one, which is excellent condition, and five which is poor.

The difference between a grade two vehicle and a grade five at auction is about £1,500.

Looking after the van maintains the value of the asset”

Duncan Ward general manager commercial vehicles, BCA


18


FIGURE 1.4 • LCV supply gap

100

150

200

250

300

35020

15

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

Supply gap

Thou

sand

s of

uni

ts

Source: Fleeteye report, Q4 2013

According to Manheim, this supply gap may extend to the new vehicle market as demand continues to increase, but manufacturers’ build capacity is directed towards Continental and eastern markets which have been slower than the UK to climb out of recession. However, it is not yet known whether the extended lead times which became typical of truck manufacturing during the peak demand of 2006 and 2007 will affect the van market.

Profile of van useManheim suggests that, while all three segments of the market are showing strong growth in demand and are likely to see overall age profiles continue to increase as fleets work vans harder, and for longer, before releasing them into the used market, the strongest and most popular contender has switched in recent years from the large panel van (over 3.5 tonnes) to the smaller panel van (below 3.5 tonnes). This is in line with the market expectations of van makers

who are also catering to those who want smaller, more fuel-efficient product, with better payload.

The Department for Transport’s figures showing LCVs licensed by keeper suggest that in 2013 45% of registered keepers were male individuals, and 46% of vans were registered to companies. This balance has tipped slightly over the past decade away from company ownership and toward private ownership.

However, the data on vehicles first registered by keeper – ie new vehicles – shows clearly that it is companies who buy new. Ninety-one per cent of new vehicle registrations in 2013 were to companies and only 8% to individuals.

This suggests that it is companies which bring new vehicles into the UK parc and 92% of those vehicles registered by individuals each year are secondhand.

Forecasts for van usage RAC Foundation says van usage will almost double between 2010 and 2040.

Although the amount of freight carried by LCVs pales in comparison to that carried by HGVs, which take more than

“The strength of the secondhand market is a great news story for the UK economy”

James Davis director of commercial vehicles, Manheim Remarketing

“Electric vehicles had some false starts but with smaller and cheaper vans with good

payloads entering the market, we are seeing them become a more attractive proposition

now, particularly as there are plenty of charging points”

Laura Moran commercial vehicle director, Hertz Van Rental

“[As to] how long respondents reckon to retain their LCVs… Some 47% are retained for four years, a drop from 60% at the last survey. Five-year replacement has moved from 23% to 34%, while 10% of respondents reckon to drive the LCVs until they collapse in a pile of dust, steam and rust – an increase from 7% at the last survey”

Fleeteye report, Q4 2013

Professor Peter Cooke emeritus fellow in automotive management, University of Buckingham


TABLE 1.7 • LCV market by fuel type

Year Petrol Diesel Gas Electric Other Total

2009 181.4 2,986.2 12.4 3.9 0.6 3,184.5

2010 168.5 3,022.6 12.3 3.9 0.6 3,207.8

2011 157.4 3,074.7 11.9 3.7 0.6 3,248.3

2012 148.2 3,116.7 11.4 3.8 0.6 3,280.6

2013 141.2 3,198.0 10.5 3.6 0.6 3,353.9

As a percentage of the marketplace

2013 4.2 95.4 0.3 0.1 – 100.0

Source: Department for Transport Licensed light goods vehicles licensed by propulsion/fuel type, Great Britain, annually: 1994 to 2013

19


85% of all freight on the roads, there will be incremental shifts of freight away from HGVs and towards LCVs. In most cases this will represent a sacrifice of efficiency in the name of utility. LCVs carry far less payload for the amount of fuel burned, but are nonetheless better suited to urban multi-drop delivery, which is becoming significantly more important given the growth in online retail. (See sectoral breakdown, page 24.)

Alternative drivelinesWhile the diesel engine still dominates the LCV marketplace and has become increasingly clean and efficient, political and environmental factors are driving the development of alternative propulsion systems. Broadly the political concerns are the need for cleaner urban air quality and a need to limit our long-term dependence on imported fossil fuels. Commercially, the drivers are principally the high and volatile cost of diesel and the CSR/brand benefits of ‘green’ running.

Currently, however, there are few alternative drivelines which are commercially viable on any scale without governmental support.

While trials and experimentation with alternative drivelines continue, as overall LCV numbers grow, these alternative vehicles are not maintaining their proportion of the whole market. Gas-powered vehicles have fallen from 0.4% of the market in 2006 to 0.3% in 2013; and electric vehicles have dropped from 0.2% of the vehicle parc to 0.1%.

However, industry commentators still believe that these vehicles will form a significant, if narrow, niche in vehicle usage. The markets and charging infrastructures are maturing, prices are falling and many early concerns, such as range anxiety, have been laid to rest. 2013 saw

the first serious OEM contenders in the electric vehicle market. It is likely that for back-to-base vehicles and those constrained to a narrow operational radius – for instance, local deliveries or some local authority work – the low-emissions profile of such vehicles will appeal.

The technologies still need to mature however. Electric CVs have a triumvirate of commercial factors which directly affect one another; payload, range and battery size. To carry more, one must sacrifice range or accept greater cost and weight in the battery etc.

It is possible that the acquisition/replacement cycle for such vehicles will be different to that of the established diesel market. Electric vehicles, for example, have a far higher upfront cost, and currently uncertain residual values. However, they also have few moving parts, and therefore mechanical reliability and low repair costs. Many users of such vehicles may continue to use them well beyond the standard replacement cycles which, as we have seen, are becoming longer even for diesel vehicles.

It is possible that electric vehicles will enjoy a ‘fuel sweet spot’ after being written down which operators may choose to continue until the end of their effective battery life. It is possible that this will make residual values for these vehicles of significantly less importance.

“The first generation or two of e-LCVs may need to be replaced as they evolve, but after that they should run for ever”

Professor Peter Cooke emeritus fellow in automotive management, University of Buckingham


DHL Express runs a small number of electric vehicles in London

“The stem mileages between charging are challenging. In the real world eight hours’

charge will give us 60 miles operational use. We need the medium wheelbase vans for the volume but this gives us issues with battery

capacity and weight. The technology needs to progress. Equally it would help if the

government would allow us to run EVs at four or five tonnes without operator licensing, so we

could get more value from those 60 miles”

Richard Crook fleet director, DHL Express UK

20

Regulation in the van marketThe rapid growth of the van sector over the past decade continues to attract the scrutiny of regulators and enforcement agencies both at UK and European level. From time to time, the spectre of licensing and regulation is promoted and discussed but so far a 3.5 tonnes gross vehicle weight remains the threshold between the licensed HGV sector and the unlicensed, but still regulated, van sector.

Not that this is for want of trying. Several attempts have been made to bring vans into scope of the EU drivers’ hours rules over the past few years, as politicians and policy makers respond to the inexorable growth of vans, the anecdotal evidence of poor driving standards and the fact that there are no specific van regulations. Like nature, policy makers abhor a vacuum.

Often this regulatory extension has been attempted by the simple expedient of substituting the threshold weight of vehicles in which tachographs need to be fitted from 3.5 tonnes to a lower number. The most recent example was during the European Parliament’s discussion of the new specification for digital tachographs, where an amendment to the draft directive proposed a lower threshold of 2.8 tonnes.

Such attempts fail largely because they are not adequately supported by a benefit assessment that justifies the cost and practical impact that the proposed amendment would

bring, nor which defines the problem that regulation or licensing is trying to solve. Only a few such studies have been undertaken and published. A Department for Transport review of official statistics on the van sector during 2014 concluded that the number of reported incidents and infringements were no higher for vans, proportional to the number of vehicles and their mileage, than for other classes of vehicles. The Department concluded that there were no grounds for justifying further regulation of the van sector based on risk to other road users.

The van sector is far from unregulated. Most of the requirements are no different than for cars – driving tests, annual testing, driver licensing, for example – but some important distinctions do exist. For instance, the national speed limit for non-car derived vans (typically, but not exclusively, larger models of van) is 10mph less than for cars on any national speed limit road. This means 60mph on dual carriageways and 50mph on single carriageway roads, unless other restrictions apply.

Car-derived vans up to 2.0 tonnes (maximum laden weight) have broadly the same speed limits as cars, but the two separate distinctions made in law to define this category – weight and design platform (ie car-derived) – lead to inconsistencies. For instance, a Ford Transit Courier fits the weight limit of below 2.0 tonnes mlw but is not car-derived. A small Volkswagen Caddy is car-derived, as is

CHAPTER 2


21

Regulation in the van market

its larger sibling – but the larger vehicle does not fit within the weight prescription.

These inconsistencies lead to confusion among drivers, operators and van dealers. In such cases it is imperative that operators seek advice from their vehicle manufacturer to ensure they stay compliant with the law on speed limits.

The issue of maximum speed limits was highlighted during 2014 by the government announcement in June that it had abandoned plans to increase the national speed limit on motorways to 80mph.

Although this issue did not go to consultation before being dismissed, it sparked discussion within industry as to best practice. A requirement of the Van Excellence Code is that vans are speed-limited to 70mph. Had the planned increase gone ahead, operators would have been faced with the decision of whether or not to increase speed-limiter settings on their vehicles.

Early consideration of this issue by the Van Excellence Governance Group revealed a reluctance to raise limiter settings above 70mph, given the consequent safety risks and the marked increase in fuel consumption.

Such self-discipline has not stemmed the calls for more regulation. The Senior Traffic Commissioner, Beverley Bell, has been unequivocal in her call for operator licensing to be extended to larger vans. So far this has been resisted by a government keen to keep public sector costs under control. The financial burdens of licensing and regulation would be significant for industry, but the costs of administering and enforcing a new licensing regime for vans would also be significant for the Department for Transport.

As an example of the costs involved, it would require 46 new Traffic Commissioner posts to maintain the current ratio of one Commissioner for every 83,000 vehicles, if vans were brought into the O-licensing regime. Unsurprisingly, this has not been greeted with enthusiasm within Whitehall.

It would also impose a near-impossible challenge to many van operators who have developed their operational model around the flexibility currently afforded to base many, if not all, of their fleet with their staff parked at their home. The logistical difficulties and extra costs incurred by having to base vans at registered operating centres, as could be required by the imposition of O-licencing, would be an unnecessary burden during these times of economic recovery.

It is improbable that the full weight of operator licensing would fall on the van sector even if regulation were to be introduced. The diverse uses of vans, and the mind-set of drivers and operators, mean there is a knowledge gap and culture difference between licensed HGV fleets and van operations. Only where mixed fleets are managed is there a ready transfer of technique and experience from one to the other.

Even within professionally managed fleets, there is a recognition that vans are driven by staff who, in many cases, do not consider themselves to be professional or vocational drivers, but simply use the van to travel to a place of work or to carry the tools of their trade. Managers of non-vocational drivers therefore employ different communication and motivational techniques than with vocational drivers.

Regulators contemplating the possible regulation of vans should learn from industry’s experience that van fleets and HGV fleets are intrinsically different. Rather than trying to extend HGV-style regulation, a more practical, potent and cost-effective approach will be to acknowledge what leading UK van operators have already achieved and encourage others to emulate them.


22


Case study • Electricity North West: Safety and commerce both demand sound maintenance

Electricity North West (ENW) runs vehicles which weigh in just under 3.5 tonnes as its engineers need to have their vans available 24 hours a day, a requirement which could not be fulfilled if the company was obliged to have an operating centre.

It supported the development of Van Excellence and committed to accreditation “because we were already meeting these standards and think other fleets would quickly see the common sense and commercial benefits of doing it too,” says Graham Davies, transport manager at Electricity North West.

ENW owns, operates and maintains the electricity distribution network between Macclesfield and Carlisle and up to the Scottish borders. Its 620 LCVs are driven by paired engineers responsible for repairing 13,000km of overhead power lines, over 44,000km of underground cables, almost 86,000 items of switchgear and more than 34,000 transformers. They service 2.4 million properties and five million people.

Given this, vehicle availability is essential. “Vehicle downtime costs us £500 a day,” says Davies. Hence ENW has a rigorous maintenance and preventive maintenance regime. Drivers’ walk round checks are mandatory and in September this will move from the current paper-based system to an iPad app which will correlate the checks against vehicle movement.

The visual inspection reports are also sent to the workshop. No vehicle with serious defects should be used. Every vehicle has a full service every year and a pit inspection every six months. Off-road vehicles are serviced every 26 weeks unless multiple defects are noted in which case they move to a 13-week schedule.

“The manufacturers offer fantastic service intervals these days but you must react to the duty cycle and application of the vehicle. We are careful that our service intervals respond to what the vehicle is doing,” says Davies. The drivers’ powers of observation are checked by the workshop – any defect a driver should have spotted is reported to a manager. “We have the money to maintain our fleet properly, but we do not have money to waste,” says Davies. “We maintain vehicles safely but economically.”

Driver training is done as required, with inductions on any new vehicle. However, the major impositions on drivers are speed limiters. The vehicles are limited to 70mph and, more recently, the sub-3.5-tonne vans were rev-limited as well. This cost £100,000 and is returning an astonishing 100% ROI every six months. With fuel reduction targets of 2% year on year, so far ENW has saved 8% against its baseline.

“Some drivers complained that the limiters meant they couldn’t speed out of danger. Our response was: ‘If you need to speed out of danger you need advanced driver training.’ One hundred drivers have been trained so far,” says Davies.

He is very aware that his drivers do not consider themselves drivers at all. “They would not include it in their job description,” he says. “They are engineers. The van is a mobile toolbox.

“Nonetheless we gave a major presentation to insurance companies in London recently and have managed our risk so well that we negotiated £18,000 off our premiums. There is no doubt that Van Excellence makes commercial sense.”

ENW is now rolling Van Excellence out through its subcontractor fleets. For more, see page 46.

“We were already meeting the Van Excellence standards and think other fleets would quickly see the common sense and commercial benefits of doing it too”

Graham Davies transport manager, Electricity North West


23


Case study • Iron Mountain: Heavy goods standards for light commercials

In 2008 Iron Mountain found itself facing escalating vehicle insurance premiums.

“We didn’t see ourselves as a transport operation – we are document storage specialists,” says Rory Morgan, national logistics general manager of the US firm.

“We had grown very quickly through acquisition and are in more than 30 different countries with 3,500 vehicles globally. For those who do not see themselves as in the business of transport, it is very easy to overlook basic and fundamental things.”

Iron Mountain took its fleet in hand to ensure that its policies and appreciation of corporate responsibility grew to match the rapidly expanding organisation. Morgan has stringent polices now for the 190 sub-3.5-tonne vans which the company runs in the UK and Ireland. Where practical, the policies and measures echo those enacted for its 140 HGVs, despite the lack of statutory necessity.

“We have 30 regional transport centres across the UK and Ireland, the largest with 80 vehicles but many with just one or two,” says Morgan. Iron Mountain was one of the first companies to be accredited by Van Excellence because Morgan is very aware of the standards gap between the large professional HGV fleets and the small van operators.

“We go over the top in many of our procedures. We check licences every three months and, if a driver gets nine points, it becomes monthly. We speed limit every vehicle not only with an overall top speed but by posted limit as well. We enter external audits such as ISO standards. Our paper-based cargo weighs out before it cubes out so we are very aware of safe and compliant loading practices,” says Morgan.

“We also have five driver-trainers. Every driver must pass a thorough driving assessment before recruitment, and then a complete induction on their vehicle. They shadow a buddy for two weeks and are assessed again at the end of their probation.

“We upskill drivers and put all our van drivers through our Driver CPC training even though there is no legal requirement because issues such as safety, compliant loading and good customer care are relevant to everyone,” says Morgan.

“Maintenance is one of the most important areas for van fleets to consider. Manufacturers’ servicing guidelines are an insufficient guide for operators in my view. Back in 2008, we found we had two Sprinters with low mileage which hadn’t been serviced in two years. The dealer confirmed that the dashboard light had not prompted us,” he says. “Now all vehicles have an inspection annually or every 15,000 miles, whichever comes first. We pay extra for that because it is far higher than the manufacturers suggest.”

Morgan says he considers Van Excellence an essential initiative.

“We have been through four Van Excellence audits now. Even though we have other indicators such as ISO, BSI, and stringent internal audits, we believe this is important for the industry and we refer to it often. Fleets might believe it requires expense and resource to achieve but the basics are relatively easy. What it does require is professionalism and organisation.”

“We put all our van drivers through our Driver CPC training even though there is no legal requirement, because issues such as safety,

compliant loading and good customer care are relevant to everyone”

Rory Morgan national logistics general manager, Iron Mountain


24

Vans and essential economic activity

Sectoral breakdown of LCV fleetsThe van sector is broadly divided into companies for whom transport is a core operation and those for whom it is simply a secondary necessity to their core activity. The first type of operation tends to be more cost-sensitive and, therefore, often has more management structures in place around its fleet. However, as transport carries a significant portion of workplace risk and both vehicles and fuel are expensive, cost and proper management is equally important for both types of work.

The parcel delivery and home delivery sectorsThere is much overlap between the postal and parcel delivery sectors and the newly emerging traffic from e-retail. The internet has been a key player in shaping this market, as it has reduced the number of letters being posted, through email and electronic messaging, while creating strong growth in the parcels and e-commerce sectors.

Currently the parcel and mail service is worth some £25.5 billion, employs 242,000 people and consists of almost 14,000 businesses. (IBIS Postal and Courier Activities in the UK, June 2014). It includes such companies as Yodel, DPD and Royal Mail as well as international carriers such as DHL Express, FedEx and UPS.

The growth in e-retail has not just changed volume and the type of freight carried, it has also changed customer expectation and forced the parcel operators to begin to cultivate a business-to-consumer (B2C) profile while their business models remain firmly business-to-business (B2B). Retailers and customer demand have conspired to keep delivery costs suppressed, while the timing and mechanism of delivery becomes increasingly sophisticated and consumer oriented.

It is not untypical now for a consumer to expect to choose a delivery day, be informed of a specific delivery window, receive regular alerts about their parcel’s progress and be able to track it in real-time – all for a delivery that may have been free with the cost of purchase. This need for constant investment in IT and consumer-pleasing strategies,

while struggling to pass on the true cost of transport, has put the sector under great commercial pressure.

Many of the parcel services are international and therefore employ a variety of modes but most deliveries will at some point travel by van, often for the final miles of their journey.

The fleet profiles of parcel fleets have become much more varied in order to cope with the burgeoning e-retail market. Many fleets in this sector are a flexible amalgam of a core corporately-owned fleet; subcontractors; and home-based couriers who use their own vehicles within specific postcodes and are often used to fulfil seasonal demand. Companies vary as to the priority they place on different parts of this fleet – at one extreme are self-operated, liveried fleets with permanently employed drivers and at the other a network of independent sole traders operating on a franchise basis.

The parcels sector also has very successful parcel networks which employ a hub-and-spoke distribution system. Often

CHAPTER 3


25


there is great overlap between the members of such parcel networks and the members of pallet companies.

A major challenge for the parcels sector is to see themselves as end-user service companies and not simply transport operations. Hence customer care training for drivers has become a far more visible part of employment practice.

One fast-growing area of the home delivery network is grocery home delivery, most conspicuously among the supermarkets which have developed large van-based urban fleets to deliver online shopping.

The share of online retail sales is forecast to rise from 12.7% (2012) to 21.5% by 2018 or the end of the decade. (Retail Futures 2018)

According to IGD UK Grocery: Market and channel forecasts 2014-2019, the UK grocery market was worth £174.5 billion in the year to April 2014, forecast to grow to £203 billion in 2019. The online grocery market will contribute £7.7 billion of this total revenue in 2014. Overall, groceries account for almost 55% of total UK retail spending.

The popularity of online retailing and the growth of multi-channel retailing does not only affect the major supermarket chains. It is also having an effect on traditional local businesses, such as market garden shops, wine merchants and florists, as consumers become more confident with online ordering, making vans a more essential part of smaller retailers’ standard operation.

ConstructionAccording to The construction industry: policy and statistics (parliament.uk), “In 2012 the construction industry in the UK contributed £83 billion in economic output, 6% of the total. 2.15 million jobs or 6.5% of the UK total were in the construction industry in Q4 2013.”

The construction industry was badly hit during 2008, recovered slightly faster than the rest of the economy in 2009, but remained stagnant during 2010 and 2011. A further contraction in 2012 finally gave way to partial recovery in 2013. The sector’s output fell by 15.8%

between Q1 2008 and Q2 2013. (ONS Output in the construction industry, August 2013).

Construction represents 6% of GDP.

In May 2014, compared with May 2013, output in the construction industry increased by 3.5%. All new work and repair & maintenance both increased by 3.7% and 3.1% respectively.

New housing work provided the largest contribution to the increase in all new work compared with May 2013, with both public and private housing seeing substantial increases of 29.3% and 16.8% respectively. This resulted in all new housing increasing by 19.4%. Private industrial new work also increased compared with 2013 (see figure 3.1)

In terms of fleet, therefore, the construction sector has extremely diverse needs. It runs a range of specialist equipment and vehicles, with weight and payload being essential factors in choice. It has endured severe cost pressure. Like the parcels sector, the construction industry runs the gamut from large corporates to sole traders contracted by individuals or as subcontractors on larger projects.

The utilities sectorThe utilities sector is one of the largest users of vans in the UK. Water, power and energy companies have their own fleets but are supplemented by innumerable subcontractor fleets which specialise in utility engineering.

FIGURE 3.1 • Breakdown of construction activities

All repair and maintenance

All new other private work

All new housing

All new infrastructure

All new other work

34%

25%

19%

11%

9%

Source: ONS August 2013

“We predict that the UK online food and grocery market will almost double in value over the next five years, far exceeding the 18% growth expected for the total grocery market over this period”

IDG.com


26


Case study • DHL Express: The demands of a diverse fleet

DHL Express runs a fleet of 1,200 3.5-tonne vehicles, 20% of which are DHL-branded subcontractor vans. It therefore has the challenge of setting compliance and operational standards for its own fleet but also many SMEs and individuals who operate on its behalf and also represent the public face of DHL.

“We have challenging standards for all our fleet in terms of efficiency, which involves careful, multi-drop routeing. However, the biggest part of our management is in controlling the cost and consequence of that – the safety and compliance which must underpin it all,” says Richard Crook, fleet director, DHL Express UK.

A telematics feed from every van is focused purely on driver behaviour which Crook says cuts fuel consumption but, more importantly, drives down the accident rate. “We have seen a dramatic drop-off in accident spend on the telematics-enabled vehicles compared to those without,” says Crook.

Vans must be serviced every year and external maintenance contractors must complete a proper visual check every 13 weeks, if only to ensure that drivers’ walk around checks are effective. Preventive maintenance is important as the operational fall-out of delayed collections and deliveries caused by vehicle failure is significant, if not easily quantified.

Like most vans fleets, DHL Express is operating at weights below the operator licensing regulations and, like many fleets, has drivers who see themselves as specialists in a non-driving area. “Our people fundamentally see themselves as couriers. There is a lot of legislation around international parcel movements, with couriers trained in threats, risks and security compliance. Driving the van is a fundamental part of their work nonetheless.”

DHL has regular feedback sessions with its couriers, disseminating and acting upon the information from the telematics units and discussing challenges in their job. “There is no legislative framework for training van drivers, unlike vocational drivers. However, we spend a significant amount of time talking to our drivers to achieve the same level of success. Although it affects us less than others, there is a sector-wide problem of high driver turnover. Being a courier is not usually viewed as a vocational career but DHL works hard to keep good people.”

DHL’s support of Van Excellence stems from its ability to help the industry act to uphold its own standards. “Self-regulation is always best. We have lots of internal auditing procedures within our business but it is valuable to have an external body verify and validate those,” says Crook. “My advice to our business was: we should not be afraid of this. As a blue chip company we should pass this inspection daily and twice on Sundays – but we still have to step up and prove it.”

Van Excellence didn’t challenge DHL unduly but that is not to say there was no benefit from external inspection. “We have a very robust driver assessment system – but the auditor tweaked the clarity of our form to make it clear that the drivers’ walk around assessment must be checked. A tiny ambiguity but one you only spot when unfamiliar with the systems,” says Crook.

DHL Express has a response line where the public can comment on their drivers’ behaviour. “We follow up every complaint, but 10% or more are complimentary. People commenting on courtesy, or patience or consideration from DHL on the road, often with the comment: ‘It was amazing for a van driver.’ That’s what we want – to break down that persona of ‘white van man’ once and for all.”

“There is no legislative framework for training van drivers, unlike vocational drivers. However, we spend a significant amount of time talking to our drivers to achieve the same level of success. Although it affects us less than others, there is a sector-wide problem of high driver turnover”



27


These companies may either specialise in one specific part of the utilities market – for instance, electrical engineering – or cover a range of expertise and so combine civil engineering with elements of infrastructure construction and power-supply build and maintenance.

As with the other sectors so far discussed, the utilities have found themselves under increasing price pressure. The energy companies, for example, doubled their investment in the UK to £43 billion between 2007 and 2011 and increased jobs by two-thirds, now employing 600,000 people (Powering the UK, Ernst and Young). There is strong political will for energy companies to maintain this level of investment to create low-carbon infrastructure, develop greener energy sources and simultaneously stabilise surging energy prices for the consumer.

Local governmentLocal government has a wide range of uses for vans including, but not limited to, green space management, social service provision, environmental and building planning, inspections and approvals, clinical household waste collection, involvement in civil engineering monitoring and emergency, animal welfare, social housing repairs… just a few items on a long list.

The Institute for Fiscal Studies suggests that local government will have seen a 29.5% fall in local government spending between 2010–11 and 2015–16.

So far local government has focused on typical supply-side cost-management. In-house fleet budgets have been cut and fleet managers must justify every penny.

Increasingly fleet services have been outsourced, often through pooled procurement with other councils. In the future we are likely to see more diversity in the nature of this outsourcing, including more social enterprise groups and community interest companies, as well as national framework models.

The result will be a broad amalgam of third parties offering fleet services, often not as their core activity, for local authorities, and at fiercely competitive prices. Risk management may well become an increasingly important part of these negotiations.

“The acceptance of prolonged austerity in the UK, along with projections of ever

increasing demand for services, is leading to a fundamental shift towards redefining the

purpose and role of local government. Local government now needs to change to making new strategic choices as well as finding more

efficient and effective ways of working”

PwC Redefining Local Government (2013)


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Case study • Clancy Docwra: “I want my drivers safe always – not just at work”

Clancy Docwra is the operational arm of the Clancy Group, a civil engineering company which services all the major utilities in the UK. The company’s engineers fix or install sewers, power lines or maintain and repair water mains among many other pieces of utilities infrastructure. The work is a mixture of carefully planned jobs which require local authority permission and road closures – and emergency call outs which are essential to maintain supply. Its remit stretches from Inverness to the Isle of Wight.

Clancy Docwra runs a fleet of 400 cars, 700 Transit vans and 350 car-derived vans such as Fiat Doblòs and Transit Connects. It also has 135 HGVs so is well versed in the more stringent regulations governing heavier vehicles.

“The reality is the majority of our workers drive vans daily yet with no external recognition that they are professionals in that capacity,” says John Blakeley, national transport manager. “That’s the appeal of Van Excellence. We want them to be able to demonstrate: We are not just van drivers – we are professional, responsible van drivers.”

To achieve this standard Clancy Docwra treats its van fleet like its HGV fleet, with the same emphasis on roadworthiness and driver behaviour. Drivers fill out scored questionnaires, designed by Clancy’s insurers, which look for risk indicators such as age, licence infringements and road traffic accidents. These are then followed by targeted training as necessary. “It is an ongoing and continuous process, with every

accident being reportable,” says Blakeley.

Van Excellence has gained attention among its major contract customers but Blakeley says it almost matters more that the employees recognise it as a mark of Clancy Docwra’s concern for their safety and well-being. “I don’t only want my drivers safe on the road during the working day, I want them safe on the road when they are with their families. The standards we instil keep them safer in life, generally.”

Safe loading and loading to the correct weight are also areas of ongoing vigilance. The engineers have a wide array of equipment they may require at any particular job and they are carefully inducted in safe loading practices and in sensible selection of tools.

“It is not a case of ‘there’s space in the van so I can fill it’,” says Blakeley. “We have worked hard to make them understand weight limits and to encourage a culture of self-checking. Increasingly drivers ask us to bring a mobile weight pad to weigh their vans. We also do spot checks in the field for safe loading.”

All Transit vans are limited to 62mph, with the car-derived fleet limited to 70mph.

“We need to encourage the SMEs towards Van Excellence,” says Blakeley. “We engage with our subcontractors twice a year to discuss standards but going forwards Van Excellence will become one of the necessary criteria in their contract of employment.”

“We want our staff to be able to demonstrate: We are not just van drivers. We are professional, responsible, van drivers”

John Blakeley national transport manager, Clancy Docwra


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Case study • City of London: The benefits of a regular health check

City of London is an unusual local authority in that it provides refuse collection, pest control, highway maintenance and drainage services, among many others, to the famous Square Mile of the capital’s financial district but also has several outlying areas within its remit which are disparate both geographically and functionally. These include Epping Forest, Hampstead Heath, an animal centre outside Heathrow, several housing estates and Tilbury Docks. Its fleet reflects this diversity of purpose.

City of London runs 30 vans in its 130-strong fleet and their low mileages mean ideal replacement times could be 10 years – an operational and efficiency challenge.

Vince Dignam, business improvement and performance manager, says despite the council’s already high fleet standards, fresh accreditation

appealed. “It’s a health check. It is very easy to think you are doing well but it is easy to lose sight of things. It is also very useful to have an external process we can use to demonstrate to stakeholders and subcontractors the standards we expect to achieve.”

Dignam is already thinking ahead to possible vehicle standards which will be imposed in 2020 for the ‘Ultra Low Emission Zone’. “We don’t yet know how this will affect us specifically but if we want to run vans for a decade, we need to do so as cleanly, safely and efficiently as possible now,” he says.

“Much of our Van Excellence audit was an assurance exercise but we did tighten and improve some systems. For instance, we didn’t have a complaints process for poor driving,” says Dignam.

He believes the process has been useful not only to City of London, which finds the conferences a particular source of best practice material, but to the industry more widely. “We are slowing losing that white van man stigma [as an industry] and becoming more accountable. We are closing the gap between vans and the HGV standard.”

“Going forward as a sector we need to do two things,” says Dignam. “One is to lobby the manufacturers to fit more safe and green technology as standard. And the other is to bring SMEs into the professional-fleet fold. I like Van Excellence because it can appeal to the smaller fleets, not just large corporates. It has something for everyone and that’s very important.”

City of London has now won Van Excellence accreditation two years running.

“It’s a health check and an external process we can use to demonstrate to stakeholders and

subcontractors the standards we expect to achieve”

Vince Dignam business improvement and performance manager, City of London


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Operational challengesAll van fleet operators face significant operational challenges.

The non-vocational driver and the sole traderVehicles below 3.5 tonnes do not require vocational drivers and therefore drivers do not necessarily have any training or qualification beyond their standard driving licence. Furthermore, only a small percentage of the van driver pool actually consider themselves van drivers by profession. Office for National Statistics EMP04 Employment by Occupation data suggests there are just 210,000 employed people who claim this occupation, out of a vehicle parc of 3.4 million.

Whether employed or self-employed, van drivers often face a challenge unknown to the vocational driver : a lack of awareness of drivers’ hours regulations and their statutory responsibilities as someone driving for work.

The European Transport Safety Council, among others, advocates extending the Driver Certificate of Professional Competence continuous professional development requirement to van drivers. This involves five seven-hour training sessions in every five-year cycle. Many in

UK industry may not wish to see such formal regulation. However, either way, it is incumbent upon employers to educate and train van drivers to a sufficient professional standard.

If we wish to change the reputation of ‘white van man’ it could be argued it is the duty of every consumer or prospective contractor to insist that those who work for them have vans that are properly maintained and safely driven.

There will often be a cost implication to this. One of the roles of regulation is to assert the precedence of the public good before financial or commercial benefit for any party. In the absence of regulation, the industry at all levels must be prepared to put the need for public safety above commercial margin.

Driver retention and development is a key issue for the van fleet sector. Broadly speaking, the more prominent driving is as a core skill, the higher the turnover rate for staff. For example, those who are primarily engineers do not have the same turnover rate as those who are delivery drivers or couriers. This is for several reasons: they have specific specialised and professional qualifications, theirs is more likely to be a vocational job; and they are paid more.

The industry, therefore, has need of a method of retaining and recognising van drivers and tracking their qualification and experience levels from one employer to the next. This would make identifying good candidates easier and prevent waste on repeated training.

FTA has worked with Van Excellence fleets to design the Van Driver Passport Qualification. This is still in development but is designed to save time and money for employers and to improve recruitment efficiency and retention rates.

The passport is likely to be a three-tier qualification; the first tier will offer basic driver training to an agreed standard; the second will impart sector specific knowledge, such as refrigeration protocols or tail-lift safety; and the third will be company-specific training. The first part of this qualification will be portable within the industry allowing the driver to prove that they have undertaken safe driving training and obviating the need for the new employer to repeat this.

CHAPTER 4

FIGURE 4.1 • Areas of van operational challenge

COSTS

RIS KS

area

s o

fch

alle

nge


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Operational challenges

The professionalism gapHGV fleets are heavily regulated for public safety. Although most in the van industry and van-using sectors do not believe such regulation is necessary for LCVs, there is wide acceptance that overall there is a ‘professionalism gap’ between the standards to which HGVs are maintained and operated and those for LCVs. This gap is the result of far lower levels of specialist fleet experience, a diffuse marketplace and the much lower barriers to entry. The sector also lacks any formal qualifications for either driver or transport manager, unlike the HGV sector.

Leaving regulation aside, there are excellent reasons for van fleets to close this gap. This does not mean mimicking the exact protocols of managing HGVs, the duty cycles of which are very different. It does, however, mean understanding and adopting the spirit of that professionalism and its purpose – namely cost control, safety and efficiency.

There are a number of channels through which industry can raise awareness of this commercial truth – leasing and rental companies; trade associations; vehicle manufacturers; contracting companies and customers.

Safe loadingSafe loading involves the proper distribution of goods or equipment over the weight-bearing axles; ensuring that such freight is properly secured for both transit and subsequent unloading; and that the plated weight of the vehicle is not breached.

The Driver and Vehicle Services Agency (VOSA) said in 2013 that it would prioritise enforcement against LCVs as 75% of vans stopped in roadside checks were overloaded.

This is a significant and ongoing concern for many van operations, who frequently work right up the 3.5-tonne limit without any desire to cross it. Loading to the van’s plated limit is often important for vehicle utilisation.

Engineering fleets can also have a range of equipment which may or may not be required on specific jobs and it

is necessarily left to the judgement and discretion of the engineer what they need to load.

Both these scenarios mean that drivers must be carefully trained to be familiar with the capacity and payload of the vehicle; the optimal distribution of that weight over the axles; be familiar with the weight of individual pieces of kit or freight and understand the stability implications of partial unloading and be aware of the possibility of axle overloads as the load diminishes and the vehicle’s centre of gravity shifts.

Safe and weight-appropriate loading may start as a management directive but can quickly be adopted as a cultural value.

Roadworthiness The roadworthiness of vehicles is essential to the three essential operating principles: safety, efficiency and cost.

However, proper maintenance of vans is largely at the discretion of vehicles operators. Manufacturers, keen to demonstrate the impeccable engineering and resilience of their product, suggest service intervals in terms of increasingly impressive mileage. It is not atypical for a new van to have suggested service intervals up to 20,000 miles or more.

Where the service interval is dictated by the on-board computer, the alert is generally in response to the need for a lubrication service.

“Many of the issues are very basic and fundamental things for the transport industry – but for those who do not see themselves as in transport, the need for professional fleet management is too easily overlooked”

Rory Morgan national logistics general manager, Iron Mountain


32


However, while engine lubricants and other components may be engineered to fulfil such criteria, vans operating in the real world sustain uneven wear and damage. Such service intervals have no meaning against the additional damage from heavy-footed drivers, urban traffic or kerbed tyres.

Many vans do low mileages and so can easily take two years to reach a manufacturer service interval. However, it is highly unlikely that this will be an appropriate period of time for a van to be in daily operation without inspection.

Regular inspections, annual servicing and preventive maintenance saves money and potentially saves lives. It also minimises vehicle downtime which carries a heavy commercial penalty.

Pre-use vehicle checks are essential for ensuring safety and roadworthiness. Drivers must be educated in how

to assess a vehicle before use and these checks can be laid down by policy and captured in daily documentation. Monitoring that checks take place and taking action against their findings is very important.

The MOT failure rates for the LCV industry are, frankly, far too high. Taken as a snapshot, it suggests one million LCVs on UK roads are incapable of passing an MOT at any one time.

Many commentators argue that the causes of failure are trivial – such as one-third failing for issues of lighting and signalling. Others argue that, in more significant areas, such as the 10% of tests which fail for inadequate brakes, the tests themselves are flawed.

However, it is nonetheless inescapable that well run fleets do not have 50% failure rates at MOT. Properly inspected vehicles should have working lights and indicators. That such minor and easily rectified issues go unnoticed and uncorrected suggests poor levels of overall maintenance.

In 2013 the Driver and Vehicle Services Agency (then VOSA) said it would start to prioritise enforcement against LCVs as 60% of vans stopped in roadside checks received prohibitions.

Home deliveryThe home delivery market is creating many operational challenges. Access to residential housing, safe and legal areas to park vehicles and the increasing weight of freight delivered to residential destinations can all be problematic.

The parcel sector tends to have strict weight limits for parcels meaning that their workers tend to be more shielded from having to carry heavy loads or goods that may be challenging in terms of customer requirement. However, with the increasing payload of vans and the difficulty of taking larger vehicles into pedestrianised, urban or rural locations, there is an increasing overlap between van usage and heavier forms of freight delivery.

Palletised freight in particular can be problematic. Most haulage models, including pallet networks, were constructed around B2B or kerbside deliveries. Drivers being required to deliver palletised goods onto private land brings up several unresolved issues. Employees are often not insured once on private land. There are issues of liability over homeowners offering untrained ‘help’ with a delivery, and around the presence of pedestrians, children and pets. There is a growing requirement for a safe weight limit to be set on tail-lift use at residential locations.

“Financially it’s very difficult to quantify the ultimate loss from vehicle failure. It’s hard to quantify the loss of revenue from continued late or failed deliveries and collections, and then the catch up necessary, as well as customer disappointment. But it’s a cost we’re acutely aware of, hence our focus to ensure we maintain a reliable and effective fleet to minimise our exposure to this risk”


FIGURE 4.2 • Initial MOT failure rates and final fail rates

39.5%5

Initial MOT failure rates Final fail rates

292 .95%5

40%

49.7%

VAN

CAR

MINIBUS

3 TO 3.5-TONNEVEHICLES

Source: DVSA


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Road safetyIn 2012 there were 3,999 deaths Europe-wide from collisions with vans. Thirty per cent of those killed were the van occupants. Nineteen per cent of collisions which result in pedestrian death involve vans, against just 14% which involve trucks. This is likely to be the result of the high density of vans and pedestrians in urban areas. (ETSC 2012, 7th PIN report). By distance travelled, vans are the safest vehicles on the road – however, that does not mean there are not significant challenges and corporate responsibility issues around road safety.

Most collisions are caused by driver fatigue or excessive speed. Both of these problems can be tackled by driver training; sound management protocols and procedures, which both monitor driver behaviour and make provision for drivers who may be too tired to continue a journey; and technology, such as speed limiters and vehicle telematics.

EfficiencyVehicles must be optimised to give the greatest utility against the capital outlay, their running costs and, in particular, fuel usage. With van fleets, however, it is very important that industry – and those judging it – properly identifies the correct factors by which to measure efficiency. It is true that with the growth of home delivery,

the emphasis upon final mile service and the nature of urban multi-drop distribution means that despite growing awareness of the need to maximise every mile, empty running has continued to grow.

It has been reported that the average load factor for vans is 38%, and 40% travel one-quarter full. (RAC: Foundation Van Travel Trends 2014). If these vehicles were HGVs, this would indeed be a cause for concern, because HGV efficiency depends upon the vehicle being loaded wherever possible to its maximum weight or cubic volume.

Any measure of van efficiency must recognise that their purpose is not primarily to carry freight to either a specific weight or cubic volume. Therefore load factor is not an appropriate measure of efficiency.

Take, for example, an ambulance. The efficiency of an ambulance is measured primarily in terms of the speed with which it reaches a patient; the appropriateness and availability of emergency treatment which is facilitated by that vehicle; and the speed and safety with which the patient is then transferred to hospital. The amount of weight and quantity of equipment is almost inconsequential next to the appropriateness of equipment and the skill of the driver and paramedic.

In other words, the efficiency of a van can only be measured in terms of that van’s suitability and performance in terms of its task. Most vans are not freight-carrying vehicles and therefore should not automatically be evaluated in terms of load factors.

Nonetheless, poor vehicle utilisation has a negative impact on the economic value we achieve in terms of road space, emissions and fuel used. It has a cost not only to its immediate operation but to the wider economy and society.

There are ways to optimise LCV usage, which involve good governance, good driving and technology. In chapter 5, this review considers some of these solutions.


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Solutions: professional fleet management

There are numerous channels though which fleets can learn more about professional fleet management or to acquire tools and expertise. These opportunities are staggered throughout the vehicle’s life. Each access point or inter-agency interaction with van users is an opportunity to share best practice and ensure professional standards.

Hence Van Excellence has offered training to salespeople and other customer-facing staff throughout its industry and recognised partners’ workforces, in order to ensure that van applications are understood, the correct products and procedures are recommended, and that no opportunity to disseminate good practice is wasted.

Vehicle selection and specificationProper vehicle specification is essential to safety and economy. The vehicle should be matched against its application or duty cycle, the terrain it will be covering and the type and weight of equipment or freight. It should also be specified for the level of driver experience – for instance, automated gearboxes are easier for novice drivers in busy urban environments.

Vehicle manufacturers and dealerships are primary sources of information, so it is essential that their staff are trained, not just in the products but in an understanding of the customer’s commercial environment.

Van Excellence has offered training to staff in many of the key van manufacturers and dealerships, as well as the customer-facing staff at remarketing specialists Manheim.

Leasing and rental companies also have a key role in educating and informing the vehicle end user before and after vehicle selection. Several lease and hire providers have also called on Van Excellence to train their teams.

Auction house BCA notes that fleet buyers should not be solely focused on the first user but also specify vehicles which will hold their value at second life and beyond, as these will help to maximise returns when disposing of the vehicle. Specifying protective measures such as reversing sensors, linings or wrapping will help to maintain value, as will ensuring features with wide appeal, such as side-loading doors, even if these features will not be required in the first life.

Vehicle acquisition and financeRecent figures from the Finance and Leasing Association suggest that new finance provided for business investment in commercial vehicles was £458 million in November 2013 – up 18% on the same period in 2012.

The most common forms of finance are outright purchase, contract hire, or increasingly flexi-rental. Although contract hire, which is effectively an operating lease with an attached maintenance package, has been a very effective and popular method of vehicle acquisition with stable monthly costs and off-balance-sheet advantages, new rules which come in this year or next will require all leases to be reconsidered.

The International Accounting Standards Board and the Financial Accounting Standards Boards have worked together to change the rules on how leases are accounted, bringing them firmly onto the balance sheet. Short-term hire or rental remains off the balance sheet. No current leases will be grandfathered meaning they will all have to be re-examined under the new rules.

CHAPTER 5

“There is much for SME operators to gain in learning from the ‘big boys’. The cost of operating their vans is significant, yet we see little expertise in managing these. Their vans almost certainly present the biggest single risk to the well-being of their staff and, potentially, a significant risk to the survival of their business”

Mark Cartwright head of vans, Freight Transport Association

“Anyone who provides a user with a van must first understand the application so the vehicle will be effective, efficient and fit for purpose”

Marcus Puddy commercial vehicle director, Lex Autolease


35


For many companies this will not affect the appeal of operating leases or contract hire because they are looking to control cash flow, avoid major capital outlay and have predictable, stable maintenance costs.

Flexible rental is becoming a more established and popular form of vehicle acquisition. Innovative products have

multiplied in response to fleets’ demand for the utility of leased vehicles with no obligation. This demand grew out of a lack of contract confidence and limited funding options during the recessionary and post-recession periods, but it appears that, as the market recovers, the popularity of the flexi-rental product will continue.

There are 145,000 vehicles in the UK van rental parc. One advantage of the flexi-rental product is that it will remain off-balance sheet even when accounting for other funding options changes. This will allow companies to use their core capital funding for non-transport investment.

Hertz Van Rental says the market will continue to innovate. “The supply chain emphasis is very much on final mile,” says Moran. “One solution to this is to put the final mile delivery into the hands of the consumer. Hence we now have ‘retail rental’ fleets, which can be hired by the hour at outlets such as Ikea, Costco and B&Q.”

The importance of leadership from the vehicle supply industryThe British Vehicle Rental and Leasing Association (BVRLA) members have 509,000 LCVs, which is 15% of the LCV parc. However, its reach is substantial, given that it services the largest and the very smallest fleet users.

Hertz Van Rental is one example of this reach. Its serves large accounts in many sectors but also individuals and sole traders. For instance, in the express parcels sector, it

Lex AutoleaseAs of the end of June 2014 Lex Autolease controlled over 76,000 vans under seven tonnes. It works with many of the largest van fleets, which run over 500 vehicles, but it also caters for local government and sole traders. Over half its small fleet customers are local authorities.

Marcus Puddy, commercial vehicle director, says the company’s strongest selling point is its ability to carry clients through the vehicle specification and customisation process.

“It is our ability to handle bespoke builds which are often many times the cost of the van itself. We specify surveillance vans, platform builds for maintaining street lights, fuel bowsers on 4x4s to fill generators, even hygiene and washing facilities in burger vans,” he says. “It is very rare for larger corporates to specify a basic van and buyers are increasingly sophisticated about foreseeing multiple purposes for vehicles. It is surprising how much is invested in the conversion of vehicles in order to maintain their lifespan.”

He says there is a distinct need for specialist expertise as customers frequently identify the purpose of a van but lack any kind of optimised design. “The whole purpose of our helping to spec the vehicle is to reduce costs, weight and boost payload, while ensuring that it adheres to all health and safety regulations,” says Puddy.

“Part of our Van Excellence commitment is to ensure that companies receive vehicles which are fit for purpose,” he says.

Marcus Puddycommercial vehicle director

“Customers increasingly want the contract vehicle without the contract. It is the core part of our business”


“I want Hertz to be part of Van Excellence because it aligns with the standards we want to

be endorsing and achieving. It has become an aspirational brand for fleet managers”



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Case study • NHS Blood and Transplant: Sometimes only the best will do

NHS Blood and Transplant (NHSBT) is the special health authority which provides blood and blood products to hospitals and clinics around England and North Wales. It also handles organ transportation but, as these time-critical services are often expedited by planes or helicopters, the 280-strong van fleet is mainly focused on blood collection and transport.

The overall fleet comprises panel vans, refrigerated vehicles, and 7.5-tonne box vans, backed up with over 150 minibuses and emergency response cars.

“Running our fleet well is a reflection of how precious our cargo is,” says Larry Bannon, national fleet services manager. “Our 300 van drivers are very proud to be accredited to Van Excellence. They see the tick like the uniform – as a badge of honour.”

The reason for the positive feedback is simple. NHS Blood and Transplant staff know that their work saves lives, along with all the donors and volunteers who help them. Although fortunate in its professional fleet managers, who already ran a tight ship, the organisation wanted to prove beyond doubt, to all its stakeholders and donors, that every drop of blood was handled by the best possible teams and protocols.

“We didn’t need help from Van Excellence but it was valuable for us to prove that our procedures stand up to the scrutiny of the industry and a large external auditor like FTA,” says Bannon.

The organisation has several excellent fleet policies in place. Its vehicle spec was drawn up several years ago by its working party of drivers and line managers to ensure that every vehicle was exactly fit for purpose. Each type of vehicle has its own replacement policy between three and seven years, depending upon its application to maximise efficiency and reliability.

NHSBT insists on daily walk around checks and has stringent KPIs for its external maintenance contractors, demanding 95% availability 24 hours a day, 365 days a year. The vehicles also have a great deal of bespoke equipment and so regular checks are imposed upon each piece on its own interval – lightbars, tail-lifts, fridges etc.

“We are checking proactively, at granular detail to minimise failures,” says Bannon. NHSBT’s vehicle failure rate is less than 1% and it has a 100% first time MOT pass rate, where the industry average is barely half.

New drivers have a four-day intensive training and assessment period, and NHSBT offers targeted training to curb specific incident types (such as rear-end collisions). To make life more complex, the organisation has three times as many non-vocational drivers as transport professionals – some 900 nurses and donors who take their vans out on blood drives.

“For the 20 minutes they are behind the wheel of our van they have to be professional drivers,” says Bannon. “Our training reinforces that and the high standards they have to meet.”

“Van Excellence is an important initiative, by the industry for the industry,” he says. “It allows us to be very proud of that tick on the back of the vehicle.”

“Running our fleet well is a reflection of how precious our cargo is. For our drivers the Van Excellence tick is a badge of honour”

Larry Bannon national fleet services manager, NHS Blood and Transplant


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does not only serve the largest fleets directly but it also has many contracts with individual owner-drivers who comprise the flexible courier fleet the parcels companies use heavily.

Hertz believes therefore that although it only has contact with the customer once, that contact should be meaningful in terms of disseminating standards, compliance information and good practice.

“We consult with the customer about their operational need and the application of the vehicle. We then have a lengthy handover of every vehicle to the customer, where we educate them about payloads, axle weights, safe loading and safe operation,” says Moran. “We have a 40-point vehicle check at handover, and that’s part of our branch audit procedure. We also insist that every vehicle is serviced annually regardless of mileage.”

The BVRLA members, along with vehicle manufacturers, have the power to inform customers and raise awareness about professional standards and compliance.

OutsourcingProfessional fleet management can be outsourced very effectively. Operators, however, must remember that while roadworthiness and compliance practice can be handed to a third party, the legal responsibility always remains with the company running the vehicle.

BT Fleet commercialised the experience it gained running BT’s in-house fleet and now provides fleet management, servicing and accident management for over 45,000 vehicles throughout the UK. Sales and marketing director Joe Fielder says there are many advantages a professional fleet management firm can offer.

❚ Considerable buying power

❚ Economies of scale

❚ Resilience

❚ Seamless compliance in terms of roadworthiness, vehicle maintenance and documentation

❚ Improved fleet efficiency through better availability and optimisation

❚ The expertise to drive down cost

❚ Guaranteed service levels

❚ Detailed management information and insight

❚ Risk management

❚ Driver behaviour monitoring to predict and lower maintenance costs

❚ Higher residual values

“Some customers cannot afford to have a vehicle off the road, so availability is their primary need. For smaller fleets it may be about driving cost out of the operation,” says Fielder.

“We are paid by the vehicle so it surprises clients when we say: we want to cut your fleet by 10%. But a properly run fleet is an efficient fleet,” he says.

Outsourcing fleet management can give SMEs the framework and professional perspective for efficient usage, maintenance and compliance of fleets. However, it is essential that the operator remains involved, checks performance against KPIs and has full visibility of performance standards.

“We optimised BT’s commercial vehicle fleet to such an extent that BT added another 1,600 engineers to accommodate its national fibre

roll-out without buying new vans”

Joe Fielder sales and marketing director, BT Fleet


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ATS EuromasterATS Euromaster offers complete tyre management services across the fleet. It oversees tyres for more than 400,000 vans in the UK.

The choice of tyres depends upon replacement policies, vehicle and application. Awareness of tyre management protocols and their impact upon safety and efficiency is an issue that many van fleets in the UK appear to be lacking. According to the 2012–13 VOSA Effectiveness Report, 36% of roadside prohibitions against light commercial vehicles were for tyres or running gear.

Proper tyre management also has a significant impact on vehicle uptime. Tyres are the single biggest cause of commercial vehicle breakdown. Van fleets tend to have high levels of damage to tyres because the larger vans are harder for non-professional drivers to manage and they are frequently in urban environments with restricted space to manoeuvre as well as high kerbs and obstacles.

Tyres have a substantial effect on fuel consumption, up to 10% of the vehicle’s emissions, its stopping distance and wet weather handling. Poor axle alignment also has strongly negative handling and fuel consumption implications.

ATS Euromaster head of national fleets Simon Tattersall says customer focus is increasingly on vehicle uptime. He predicts that within 12 months van fleets will start to see uptime as a meaningful commercial measure of performance as HGV fleets currently do.

Tyre fleet management means managing the tyre as an asset in its own right. Tyre life can be extended and a better return on investment achieved through methods such as turning on the rim to achieve even wear; and ensuring that correct pressures are maintained. Tyres become more fuel-efficient as tread depth decreases, so a level of professional expertise is also required to find the balance between minimising rolling resistance for optimal fuel economy and the necessary road traction for safe handling.

Proper tyre management can also reveal careless or aggressive driver behaviour through wear patterns or excessive tread loss.

ATS Euromaster is seeing increasing numbers of customers ask it to extend its tyre inspections to other areas of the vehicle, such as lights, fluid levels and lubricants.

Pricing for tyre management follows various models: typically transactional or pence per mile (or km) contracts, with or without outright purchase of the tyre. ATS Euromaster predicts that future models will include a monthly price per vehicle, a structure it already employs for company car fleets and HGV fleets but, for which, so far, there is little demand in van fleets.

TelematicsArguably the most crucial area of van performance and safety is the driver. Telematics has become a powerful tool for monitoring vehicle location and performance but also driving behaviours.

Telematics has a 30% penetration in the HGV fleet, with most of the largest fleets using it extensively for vehicle tracking and both commercial and compliance indicators.

“We need to drive an HGV mentality in van fleets. There is a need to inspect, to optimise and to manage. To have a policy which delivers the practice and information needed to support proper commercial pricing and business models for the customer, as well as ensuring vehicle availability for their core activity”

Simon Tattersall head of national fleets, ATS Euromaster

“Vehicle availability is as critical for a plumber as for a national home delivery fleet”

Simon Tattersall head of national fleets, ATS Euromaster


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Case study • Sainsbury’s: Home delivery growth focuses attention on urban operations

Sainsbury’s runs 1,750 sub-3.5-tonne vans to deliver groceries to customers throughout the UK. It has committed itself to instilling the high fleet standards it employs with its HGV fleet, for both vehicles and drivers, to its burgeoning LCV fleet. It participated in the Van Excellence scheme to promote this concept.

Delivery operations manager, Sainsbury’s Online, Phil Cane, says that because van drivers are not vocationally trained, the process of raising standards starts with recruitment.

“We are extremely clear about what the role entails, and how it combines road safety with being the face of Sainsbury’s. We have rigorous assessments before recruitment and then three-stage driver training,” says Cane. Licence checking and training is provided by AA DriveTech.

As the home delivery market grows, retailers’ concept of transport has had to shift from the heavily regulated B2B trunking operations between supplier, distribution centre and store, to concentrated pockets of urban, consumer-facing multi-drops. This brings shifts in vehicle specification and driver experience but also in the nature and level of risk. What it must not do, says Cane, is fail to bring the professional compliance and safety-conscious standards typical of a heavy commercial fleet.

“Our first time pass rate of 98% for vans now exceeds that of many HGV fleets,” he says. “We are very challenging of our maintenance suppliers and our service intervals are well in excess of manufacturer guidelines because the vehicles are intensively used.”

Sainsbury’s specs its online fleet to be easy to drive – such as automatic gearboxes – and as safe as possible; its Sprinter vans have several non-standard safety items. Delivery windows are between 8am and 10pm, so vehicle checks are carried out and signed off by each driver prior to taking the vehicle out, even if double-shifting means this happens more than once a day.

Job allocation and routeing is optimised by Oracle Real-Time Scheduler to make the operation as carbon and cost-efficient as possible. Sainsbury’s also buys the cleanest vehicles as soon as they are available – currently its van fleet is Euro-5 but replacements will be Euro-6 as soon as possible.

“For us the Van Excellence programme was about leadership and assurance. We have been committed to the concept from the beginning,” says Cane. “There are significant risks and responsibilities in operating any vehicle fleet but we have been very clear that safety and professional efficiency must be pre-requisites of any fleet vehicle.”

“For us the Van Excellence programme was about leadership and assurance. There are significant risks and responsibilities in

operating any vehicle fleet”

Phil Cane delivery operations manager, Sainsbury’s Online


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It is seen by insurers and HGV fleets as a strong proactive safety tool.

However, telematics has only a 20% penetration into the much larger van parc. The benefits that telematics offer can be seen in figure 5.1 on page 42.

According to TomTom Telematics it is often the smaller fleets who adopt new technologies fastest in the van market for the following reasons.

❚ They are more autocratic, often having a single decision-maker

❚ They are much more vulnerable to the vagaries of the economy and to financial waste

❚ They have no other means of managing driver behaviour

“Once people adopt this technology it has a 99% retention rate. There is still education to be done, but the concepts

are now mainstream,” says Giles Margerison, sales director UK and Ireland.

The cost of both telematics hardware and communications is dropping rapidly and the market is moving to more vendor-neutral platforms.

One issue fleets can experience is data overload. It is essential that the system is configured so that the appropriate actionable data is delivered in a useful format to the relevant person within the organisation, for example fuel data or driver habits.

It is also important that fleet operators understand that data gathering is not in itself a useful exercise, unless that data is understood and acted upon. It is the management actions, and not the data, which drives risk and cost down.

Statistics about the use of TomTom Telematics gives an indication of the impact and reach of this technology-led management system.

400,000 vehicles (mainly vans) within TomTom’s fleet management platform

In any given 24 hour period:

1.9 million business and private trips recorded

65 million km driven (or 1,000 times round the world)

500 million messages and GPS positions processed

“The barriers to entry in terms of running a van fleet are low. The barriers to success can be very high”

Giles Margerison sales director UK and Ireland, TomTom Telematics

“Return on investment with telematics is now 10 times outlay. We estimate a complete lifetime return within eight to 10 months. The average life of a unit is three years so for fleet users, everything between 10 months and three years is profit”

Giles Margerison sales director UK and Ireland, TomTom Telematics


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“For us, the value of Van Excellence was in the process. It wasn’t hard exactly but it was

rigorous, checking one thing after another and ticking all the compliance boxes”

Richard Stansfield director of business development, Auto-Electrical Services

Case study • Auto-Electrical Services: The value of process

Auto-Electrical Services (AES) was typical of many small fleets before it entered the Van Excellence programme. It had dedicated directors who did their best to organise the engineering fleet in the margins of their core jobs. It had patchy protocols and although it had access to all the fleet software it could wish, its use was ad hoc and commercial and not focused on safety and efficiency.

AES maintains CV accessories, such as TomTom Telematics products and solutions, heating, temperature-control and air-conditioning systems for large fleets, such as the Metropolitan Police, London councils, and London Ambulance Service.

AES director Richard Stansfield says his instinct about Van Excellence was how useful it would be to customers. “Then I realised we needed to go through the process ourselves. We are very proud of what we have achieved but, at the time, we weren’t switched on.” AES had to look at fleet management in a new, more comprehensive manner.

“We were lucky in that we had the Fleetcheck management system we could use,” he says. “You wouldn’t be able to pass most of the audit without some kind of fleet management software. With Fleetcheck, we had one central online place to store all our fleet info.

“For us the value of Van Excellence was in the process. We had to benchmark everything and get everything in the right place. It wasn’t hard exactly but it was rigorous – checking one thing after another and ticking all the boxes of compliance. For instance, we had no system for licence checks or medical checks for drivers. We didn’t know we had to do that,” he says. “We even found one van that was out of MOT by one month.”

Stansfield now recommends Van Excellence to all his customers as a route to compliance and FORS recognition. “We sit on the governance committee for Van Excellence because, although we are the smallest fleet, we have the same risks and responsibilities on the road as National Grid or BT.”

He notes that when running a fleet under 3.5 tonnes, which is free of the education and regulation which comes with an operator’s licence, fleets may be less aware of their specific responsibilities.

“Essentially we have had to upgrade our 1950s values to the concept of modern-day fleet compliance,” he says.

The company now operates daily walk around checks, with FTA record sheets; it issues drivers with Premier Inn cards so they need never drive tired; it has fitted speed limiters to every new van (and was chagrined to discover this saved fuel). Camera systems have been fitted to vans and are being rolled out to company cars too. The company is now investigating driver training because its drivers consider themselves engineers first and foremost.

“I want to raise the flag about the power of Van Excellence for small companies,” says Stansfield. “We can raise the standards of white van man.

“Having done this, I feel safer. I’m more at peace and more confident in our fleet.”


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Precise vehicle tracking. This not only means vehicle location can be checked against other transport management

elements, such as proximity to the next job or drop, but is also used as evidence for KPI fulfilment and to defend against bogus damage claims. Where routeing and scheduling plans are generated,

vehicle tracking informs managers of the disparity between planned and actual

mileage and routes. It is imperative that companies can monitor and then process for HMRC distinctions between work and private

mileage. Such monitoring tends to lower business mileage.

Fuel consumption. Telematics can give accurate fuel consumption figures, and these can be used for costings but also to measure the commercial benefit of

driver training.

Geo-fencing. GPS data can trigger alerts to customers or managers when the

vehicle is within a certain distance of the next job.

Visibility of vehicles and job progress improves the customer experience.

FIGURE 5.1 • The benefits of telematics

010101


43


Preventive maintenance. Telematics systems are linked to the CANbus of the vehicle which can feed diagnostic

codes directly to the workshop before the vehicle presents with a failure. It is likely that use of telematics for

preventive maintenance will develop over the next two or three years and some compatibility issues will need to be overcome in terms of how vehicle

manufacturers communicate these faults within the software.

Driver behaviour. Most telematics suites capture harsh acceleration, harsh braking, excessive speed and dangerous cornering. Identifying these traits allows training to be targeted, which is more

cost-effective than blanket training, and also has greater impact on driver

behaviour. It also allows driver behaviour to be proactively managed.

Insurers are increasingly seeing telematics as a proactive method of

risk management and reflecting this in premiums.

Integration. For some fleets telematics is already integrated with their transport

management or routeing and scheduling modules. For others it represents a separate data stream. However,

increasingly software suppliers to the road transport sector are focusing on the useful integration of disparate proprietary

data streams to provide a single comprehensive source of management information. Essentially the ‘black box’

can act as a modem which can capture anything from tyre pressure to proof of

delivery confirmations.


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Van Excellence: the industry’s solution

The Van Excellence programme has enjoyed a strong year in which it has become an aspirational mark of both brand and operational assurance in the van fleet sector. So far the scheme has accredited more than 80 member companies, some of whose journeys are captured in this review. It has recruited five leading suppliers of fleet services as Industry Partners, each with expertise and a clientele which can benefit directly from Van Excellence. And there are more than 40 Van Excellence partners, including vehicle manufacturers and other companies who supply, and have a role in educating, the van marketplace.

With this three-pronged approach, Van Excellence is aiming to reach as many SME van fleets as possible, to raise standards, help operators achieve higher legislative and road safety compliance, and to help close the operational gap between the professional standards of the HGV fleet and the hitherto unprofessional reputation of ‘white van man’.

Many of our earliest Accredited Members are flagship companies and household names – including AAH Pharmaceuticals, British Gas, DHL, Sainsbury’s, Balfour Beatty and many others. They not only represent the burgeoning and most populous van sectors – home delivery, retail, construction and utilities – but they have a vital role to play in leadership; in demonstrating a standard which becomes synonymous with safety, legality and efficiency.

However, Van Excellence is also for the SME – those who need greater support in achieving such standards and those who want to demonstrate their high standards to customers and stakeholders. To that end, our aim is to have accredited 100 members by the end of 2014. So far there are such high levels of interest from fleets of all sizes that this looks more than possible.

We have also offered training to all our industry and recognised partners for their sales and other customer-facing staff. Meetings between supplier and customer are crucial in two ways: one that the correct product is specified, with a full understanding of the operational demands of the sector ; and two, that this opportunity to educate the customer, about safety, compliance, roadworthiness and other essential issues, is not wasted.

The first Van Excellence Driver of the Year competition launched with strong support from industry, and we followed up our successful 2013 conference programme with two more day-long events which advised any fleet – Van Excellence member or not – on carbon reduction, road safety, managing driver behaviour, fleet technologies and operational efficiency. Our keynote speaker was Superintendent Paul Keasey, chair of the National Road Policing Intelligence Forum.

We aim to prove to regulators both in the UK and Europe that legislation is not the only, or most potent, means of achieving change, and we will continue to build our relationships in governmental quarters.

Van Excellence will continue to expand, both in terms of membership and services, but its objectives will remain in sharp focus. By education, example and accreditation, we aim

to raise the standards of the UK van parc, with all the

commercial, social and sustainability benefits that brings.

Van Excellence is ‘by the industry, for the industry’ – a blend of leadership and aspiration. Thanks to all those who support, participate in or promote this scheme. I look forward to seeing what we can achieve in 2015.

Rory Morgan Chair of the Van Excellence Governance Committee National logistics general manager, Iron Mountain

CHAPTER 6

83 accredited members

140 fleets who intend to accredit

110,000 vans covered

500,000–1 million vans – current potential spread through supply chain influence

3.4 million – UK van parc


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Van Excellence Driver of the YearThe single biggest influence on road safety is the driver of the vehicle. In order to encourage high standards of van driving, an occupation which currently enjoys a poor reputation and low, non-vocational pay levels, Van Excellence held its first Driver of the Year competition in July 2014.

All accredited member of Van Excellence were asked to nominate their best driver. The final shortlist of 12 was rigorously tested through five separate tasks which were designed to test drivers’ overall ability behind the wheel. The competition had six elements which sought to examine driving skills (fuel economy and driver behaviour); manoeuvring ability; the drivers’ risk awareness; their legislative knowledge; and their ability to identify pre-use defects on the vehicle. The drivers were scored on each element of the competition and ranked based on their scores.

The 2014 winner was Cameron Weir, a driver with Iron Mountain, and Van Excellence offers both Cameron and his employer its congratulations. The competition is designed to highlight the professionalism, expertise and skill of van drivers which is too little recognised on UK roads and to offer an aspirational target for those who do not yet meet those standards.

What does Van Excellence offer?The Van Excellence Code was developed by leading UK fleets and demonstrates good working practices for van operators regardless of size or sector. It effectively defines good practice for van operational standards.

The code provides a practical framework for the development and review of operational procedures for any van operator.

Accreditation against this code demonstrates an operator’s commitment to safe and compliant working practices.

A secondary purpose for Van Excellence is to demonstrate sound operational standards within the ‘van operating sectors’ to the general public, media and legislators. The scheme is well understood and supported within the Department for Transport, Driver and Vehicle Standards Agency (formerly VOSA and DSA), the UK’s police forces, Transport for London (TfL) and the Office of the Traffic Commissioner. Van Excellence accreditation is recognised by TfL as equivalent to its Bronze Freight Operator Recognition (FORS) award for van fleets.

The accreditation processThe accreditation process of Van Excellence was created by FTA and fleet members. It is designed to be as straight-forward as possible while ensuring that the standards remain robust. Re-accreditation is required on an annual basis.

Operators seeking accreditation undergo a procedural audit which evaluates processes against the operational standards laid down in the Van Excellence Code.

Aspirant operators provide FTA with a list of their vans and drivers from which a sample of driver and vehicle records are selected. Operators are provided with a copy of Van Excellence pre-audit guidance notes which illustrate the kind of evidence inspectors need to view in order to accredit the organisation. The standards of the

“Congratulations must go to every single driver that took part in the Van Excellence Driver of the Year 2014 – to my mind, everyone was a

winner. The calibre of entries was outstanding and it was hard to pick between them. The level

of their expertise, experience and knowledge was thoroughly put to the test, and they are all outstanding drivers. This event offered van drivers the chance to redress the balance in

what is often a maligned profession marred by the reputation of ‘white van man’. Instead they were able to celebrate the fantastic work they

do on a day-to-day basis, and demonstrate how seriously they take their responsibilities”

Mark Cartwright head of vans, FTA


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Van Excellence Code represent a minimum best practice level of compliance and should be within the reach of most competent operators.

For example:

We need to be assured that an operator is ensuring their vans are roadworthy and a key element of their processes should be the use of pre-use vehicle checks.

We need to be satisfied that their drivers know they are required to carry out these checks and to be confident that drivers are recording their findings and the appropriate remedial actions are taken.

A similar approach is taken for each of the other elements of the Van Excellence Code and is described in the pre-audit guidance notes.

The initial visit is considered a constructive ‘evidence gathering’ exercise, which is followed by a thorough report on the inspector’s findings.

Van Excellence: The opportunity for leadershipElectricity North West (ENW) has demonstrated one of the opportunities inherent in Van Excellence. It has demanded that its top eight subcontractors also achieve Van Excellence accreditation in order to continue working for the company. The subcontractors were given this news in September 2013 and given 12 months to comply.

Graham Davies, ENW transport manager, says there was some initial resistance but the firms quickly saw the potential benefits of Van Excellence once they considered it. “It has both common sense and commercial benefits,” he says, “not least that you can use that mark of accreditation to secure new contracts.”

The first to become accredited is Cheshire-based overhead powerline specialist SPIE ENS.

ENW has not stopped there. It has told its subcontractors that it expects them to cascade the Van Excellence Code to their own subcontractors over the coming 12 months.

ENW is a large company, but it is not only the large companies which have the ability to influence others. Many smaller fleet members of Van Excellence are reporting interest from their customers, their suppliers or their neighbouring fleets.

Van Excellence is gaining attention and traction among a wide range of business associates. It marks the company involved as one which is serious about its professionalism – and that in itself is a challenge and an invitation to all who work with them to be equally serious.

Currently Van Excellence is an aspirational brand and the ‘tick’ on the back of vans is encouraging emulation. We aim for Van Excellence to reach a point of critical mass at which it will become a necessity brand, demanded in order to tender for contracts or maintain supply.

Figure 6.1 demonstrates the impact upon the professionalism of the van fleet of just one utility company insisting that its down-chain transport suppliers comply with its standards. In this case the original Van Excellence member fleet, of just 620 vehicles, will improve the standards and road safety of more than 4,000 vehicles, seven times the original number.

“This is how we really start to make a difference”

Graham Davies transport manager, Electricity North West

“Van Excellence is not just an assurance or validation exercise; even the best fleets benefit from objective external assessment and feedback”

Mark Cartwright head of vans, FTA


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FIGURE 6.1 • The Van Excellence chain reaction – inspire • recommend • mandate

Each of these small fleets will also have influence. One Van Excellence member with a fleet of 10 vans has attracted the attention of its largest customer, which may now consider disseminating Van Excellence through its own fleet and perhaps beyond.

Van Excellence is just one way of raising standards. Modelling and encouraging high standards in van operation is available to all good fleets, whether they are within Van Excellence or not, and should be embraced as a powerful but non-regulatory way of improving the sector.

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48


“For us Van Excellence was a stepping stone to continual improvement. It was a sense check in terms of what we do and where we want to go with it”

Steve Farnsworth head of fleet services, East Midlands Ambulance Service

Case study • East Midlands Ambulance Service: Van Excellence is a stepping stone to continual improvement

East Midlands Ambulance Service (EMAS) runs a fleet of 540 emergency response and patient transport vehicles across six counties – Lincolnshire, Derbyshire, Nottinghamshire, Northamptonshire, Leicestershire and Rutland. Its three fleet managers all have motor industry backgrounds and so approach fleet management with sound commercial and professional perspectives.

“We heard about Van Excellence through the trade press and another ambulance service which had achieved accreditation so we put ourselves through an audit to see what would happen. It was a sense check in terms of what we did and where we want to go with it,” says Steve Farnsworth, head of fleet services for EMAS.

EMAS passed with flying colours but decided to use the process to push its continual improvement programme. One crucial area is its workshops, which ensure high uptime for vehicles operating as mobile treatment centres and which therefore require a high degree of technical training beyond automotive repair.

“We have since taken up full membership of FTA, formalised our workshops and we are booking six-monthly FTA inspections of vehicles which have just emerged from our workshops to ensure our technical excellence,” says Farnsworth. “As the third stage, we plan to have all our technicians accredited to a professional scheme. Every year we will look for additional courses for our technicians. So Van Excellence was a stepping stone for us.”

In-house technical expertise is particularly crucial, as ambulances run 24/7, 365 days a year, cannot downscale activity in extreme weather and require a very flexible workforce. The entire technical team has just been trained on new diagnostic equipment for the Fiat Ducato which is EMAS’s primary ambulance.

Driving an ambulance is a particularly skilful task and so driver training is conducted by EMAS’s Organisational Learning department which has recently advertised for four driver-trainers. Their role will be to spend time with crews, noting the good practice as well as offering constructive advice.

“We are investing £100,000 in additional driver-training posts to increase our proactive training which will ultimately reduce risk, downtime and cost,” says Farnsworth. “We have worked with insurers to benchmark our accident rates against standard van fleets – it’s very similar. Also, we are working jointly with other ambulance trusts and insurers to further reduce risk. We also lead the way in terms of same-day reporting of incidents.”

“The Van Excellence scheme was a great starting point for us to assess where we are, what we can improve and that we are doing the right things. The FTA team were delightful, they worked closely with us, and it is a good and positive learning experience,” says Farnsworth. “We aim to re-certify in September. We have our accreditation displayed in our main workshops because we are proud of it.”


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Case study • Asda: Even the professionals can learn from Van Excellence

Asda’s van fleet has grown from 1,200 vehicles in 2012 to 2,000 today, thanks to double digit growth in online shopping. Sean Clifton, senior manager, national fleets, is responsible for provision and management of both the HGV distribution fleet and the home delivery fleet. His mission is to ensure that the home delivery fleet is run to standards every bit as high as those found in the heavily regulated HGV side of the business.

“Retail is changing and our van fleet is a crucial part of how we deliver our brand values and give the customer what they want. We are not required by regulation to manage our van fleet to such a high standard but we do it anyway because it’s good business,” says Clifton.

Asda invests a lot in training its driver-managers for the home delivery fleet because managing non-vocational drivers is challenging. “They may not strictly be professional drivers in terms of their driving licences but we need them to be. We have regular performance reviews, see them before and after shift, have briefings and debriefings,” says Clifton. “We have KPIs around safety, service, operational efficiency and cost. Every measure has improved dramatically over the past two years.”

Although Asda is known as a leading professional outfit in the logistics industry, Clifton dispels the idea that its purpose in Van Excellence is simply leadership. “We want to be part of Van Excellence because we want to continue improving,” he says. “Every business is constructed differently and has different experiences. There is a huge amount to be gained from opening a dialogue with lots of other fleets.”

Clifton says he was not complacent about the Van Excellence audit. “With almost 300 operations throughout the UK, 6,500 non-professional drivers and 2,000 vehicles, there is always the chance that someone isn’t doing something as they should. I thought the initial audit would expose weaknesses. In fact it didn’t,” he says. “But the VE team did suggest some ways we could make our information easier to manage and audit, like online portals with our suppliers. We may have got there on our own eventually, but the fact is they prompted us.”

Clifton says he also wanted external validation for his team’s sake. “Even internally there can be a perception that the home delivery fleet are the ‘non-professional’ side of the business. In fact our teams have worked so very hard to professionalise and I wanted their achievement to be acknowledged,” he says.

Clifton also thinks Van Excellence will eventually help the industry to collectively drive down costs by improving driving standards and risk. “It will also be important in guiding thinking about regulation in the marketplace,” he concludes.

“There is a huge amount to be gained from opening a dialogue with lots of other fleets”

Sean Clifton senior manager, national fleets, Asda


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Case study • Kent Dairy: Good systems save sleep and sanity for small business owners

Dave Terry, managing director of Kent Dairy, was approached by Pensworth Dairy Company in 2010 to set up a distribution network in Kent. He started with one van. Four years later he has a £5m turnover business, 30 members of staff, 17 routes and 15 temperature-controlled vans.

Terry’s previous jobs were at Sunrent and DHL so he was no stranger to professionally run fleets. However, when he reached a 10-strong fleet, he decided he wanted more support. “We went through a phase of growing so fast, it was difficult to manage everything and find qualified staff to rely on,” he says. “I joined FTA and when someone recommended Van Excellence I thought: that’s the tool I want.”

Van Excellence has had specific benefits for Terry. “We now have a proper protocol for training. I am very good at parts of my job but I can’t train others to do it. I was also told to bring all our protocols and procedures into one employee handbook. And although all my vehicles are on contract hire (ie fully maintained), I negotiated with our supplier to make all files visible to me.”

There were also many things Terry was excelling at. His two driver-trainers put new drivers through at least five days training, before a pass/fail assessment. “Five is the minimum. The maximum training we had to give was three and a half weeks, but I felt the guy was worth it and so he proved to be,” says Terry.

On the brink of opening a new operation in Surrey, Terry reflects that the challenges he faced were not just about running a professional vehicle fleet or a new business, but adjusting to the risk and relentlessness of running his own show. “I have an overwhelming sense of achievement, not just from the business but from everything I’ve learned in the process,” says Terry. “It’s a big jump from working in a large corporate though. I am responsible for everything. I’ve realised I need these systems and protocols to enable me to step back and take time out.”

To free himself up for his strategic role, Terry brought in a consultant to mentor one of his 23-year old drivers to become depot manager. One of their first joint tasks was to prepare the employee procedures book mandated by Van Excellence. “I now have a very well trained manager in place who can maintain the standards we’ve set,” he says.

Terry believes Van Excellence is a great tool for small fleets. “When you are running a small business it is easy to let things slide,” he says. “Van Excellence lets me sleep at night and take pride in what I do. I want to make money guided by my conscience and to look after people.

“The accreditation has impressed my customers because it proves we’re serious about doing this properly,” he says. “My customer Pensworth has also become interested in the scheme and has requested a copy of our audit so they can see what’s involved.”

“Van Excellence lets me sleep at night and take pride in what I do. I want to make money guided by my conscience and to look after people”

Dave Terry managing director, Kent Dairy

The Van Excellence Review 2014 © Freight Transport Association

51

ConclusionThere is a significant gap between the expertise and practices typical of HGV fleets and that of van fleets. Closing this gap will bring benefits to both society and industry.

Vans underpin the economic activity of the UK. We have identified the many operational challenges which affect these fleets and the various solutions which are possible.

We believe that Van Excellence is the industry-led solution which knits all of these resources, best practices and associated agencies, from manufacturers to enforcement agencies, together in one collaborative and progressive venture.

Be in the vanguard: help professionalise the UK van fleetFreight Transport Association Van Excellence, on behalf of all our fleet members, industry partners and allied suppliers, would like to issue a challenge, an invitation and a call to action to anyone reading this review. We feel passionately about taking action to professionalise the UK van parc, empowering and inspiring every individual associated with the van sector.

We have a need for leadership. Leadership in the genuine sense of going forth alone, at the head of the pack, with commitment, courage and conviction.

Here is what each of us can do to raise standards, improve safety and encourage the commercial success of UK plc.

OperatorsBecome part of Van Excellence for your own security, commercial distinction and corporate responsibility. Then inspire, encourage and mandate your subcontractors to prove their high standards too.

Vehicle manufacturersLead by example. Limit van speeds to the legal limit as standard unless the operation has a specific operational need for elasticity (such as emergency vehicles). Consult

with prospective customers about sound specification and the need for compliance and preventive maintenance. Make it clear that lubricant-based service intervals are secondary to operation-based service schedules.

Leasing and rental providersMandate that customers have service schedules for vehicles which fit the application, and are not based on generic manufacturer guidelines. Educate customers about best practice, safety and compliance and stress the importance of ‘duty of care’ inspections. These are your assets – make sure they are used responsibly.

Enforcement agenciesIn a word: ENFORCE. You have a public mandate and public funding with which to deny criminals access to our roads and drive unscrupulous, unsafe operators off the roads. Freight Transport Association members support both the law as it stands and the enforcement which upholds it. Do not allow those who refuse to comply with the law to compromise the safety of our roads or the commercial viability of our businesses.

Insurers and legislatorsAll those who assess risk either commercially or legislatively: reward good practice. Insurers, be proactive with reassessing premiums for those with good risk management practices. Legislators, leave room in regulations and charges for discretion toward those fleets which achieve high standards.

We talk a lot about corporate responsibility and leadership. FTA would like these to be not just buzzwords but rather genuine values which inform our approaches and our actions.

Together we can professionalise the UK van fleet, making it safer and more productive.

Van Excellence: inspire • recommend • mandate

Rory Morgan Chair of the Van Excellence Governance Committee


Resources to guide van fleet operation

Vehicle and Operator Services Agency Your Van: Best Practice Guide www.gov.uk/government/uploads/system/uploads/attachment_data/file/248620/your-van-best-practice-guide.pdf

Fleet Van/Department for Transport Best Practice Guide www.fleetnews.co.uk/vans/van-best-practice/

Freight Transport Association Guide to Van Excellence www.fta.co.uk/membership/subscription_services/van_excellence.html

Freight Transport Association Van Excellence Operator Accreditation Pack www.vanexcellence.co.uk/export/sites/vanexcellence/.content/documents/van_excellence_accreditation_pack.pdf

Freight Transport Association Van Walk Around Check videos Part 1– https://vimeo.com/104703430, part 2 – https://vimeo.com/104703937

Freight Transport Association Well Driven? Campaign www.fta.co.uk/export/sites/fta/_galleries/downloads/Good_Lorry-Van_Code_0612.pdf

Sewells Research and Insights The UK Van Fleet Market 2014 static.fleetnews.co.uk/files/PMs/UK%20Van%20Fleet%20Market%20preview%20document%20%28small%29.pdf

Asda video on van safety www.virtualriskmanager.net/main/casestudies/asda.php

Acknowledgements

We would like to thank the following contributors to, and participants in, this report for their help with compilation and their continued support of the objectives of FTA Van Excellence.

Van Excellence Accredited Members: Asda, Auto Electrical Services, City of London, Clancy Docwra, DHL Express, East Midlands Ambulance Service, Electricity North West, Iron Mountain, Kent Dairy, NHS Blood and Transplant, Sainsbury’s Online

Van Excellence Industry Partners: ATS Euromaster, BT Fleet, Hertz Van Rental, Lex Autolease and TomTom Telematics.

Other agencies and organisations: British Car Auctions; the British Vehicle Rental and Leasing Association; Fleet News; Ford Motor Company; LMC Automotive; Manheim Remarketing; Professor Peter Cooke, emeritus fellow at University of Buckingham; the Society of Motor Traders and Manufacturers.

Research and compilation by White Rose Media Ltd.

ISBN: 978 1 905849 40 6 Freight Transport Association LimitedHermes HouseSt John’s RoadTunbridge WellsKentTN4 9UZ

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Van Excellence Review 2014