Are blind spots in your fleet policy leaving you exposed?

In 2022, price increases, poor new car supply and record high used car prices have been causing a bit of a distraction from the traditional areas of risk that fleet managers have to navigate in a business.

At the same time, emerging technologies, hybrid work arrangements and a focus on sustainability have created new areas of organisational risk that now need to be included in a fleet policy.

An effective fleet policy should identify, reduce and manage risk for your organisation so you and your team can sleep peacefully at night.

A comprehensive fleet policy will cover four main risk areas – financial, reputational, human resources and legal. Interleasing has recently published a new guide, Managing Fleet Risk, to break down these risk areas.

It was created to help fleet managers identify potential blind spots in their policy and take a holistic view of the risks that come with owning or running vehicles for business purposes.

Anthony Perri, General Manager – Sales and Customer Relations at Interleasing, believes the pandemic and new technology are changing the risk profile of fleet management and this means fleet managers will need to consider non-traditional areas of risk.

“There has always been the obvious risks in fleet management – residual values, maintenance expenses, accidents,” explains Perri. “However, now things are changing, and emerging technologies are bringing new challenges to our industry which need to be considered.”

“Many organisations will be looking at sustainability and brand reputation so fleet managers can get involved and work with stakeholders across the business to make sure employee mobility is part of the discussion.”

The four risk areas

1. Financial risk

This relates to the procurement of products and services, asset selection and their utilisation in the business. In other words, picking a vehicle manufacturer, a fit-for-purpose vehicle and making sure there are enough cars for the operational areas of the business. This was the traditional focus of the fleet team.

2. Human resources risk

This relates to employee safety and accidents. A vehicle is considered a workplace, so ensuring a car is safe and your drivers are licenced to drive it are basic requirements.

Identifying potential risks also means understanding your drivers’ health, fatigue and journey planning, and should also detail the use of personal vehicles for work trips (grey fleets).

Telematics (or vehicle tracking) can help your business manage a number of different risk areas while also providing operational benefits. Many organisations are using telematics to improve driver behaviour and ensure the safety of workers in remote locations.

With the integration of multiple data sources, telematics is also being used to manage financial risk by identifying the fraudulent use of toll tags and fuel cards.

3. Reputational risk

This is how the public perceives your business and involves mitigating risks to your reputation. Telematics can be used here too to improve customer communication by using route planning for the delivery of services.

Social media has upped the stakes for reputational risk because customers and community stakeholders can mobilise quickly to target your business if they feel you’ve made a misstep.

If your business has a fleet with vehicle signage, poor driver behaviour presents obvious risks to your brand. 

“The impact of an adverse event on the driver, their family, and the community can damage the brand reputation of any business,” says Perri.

“Communities expect safe driving and are demanding more accountability from organisations. There is a focus on the environment and initiatives to reduce emissions, so the type of vehicle is a statement to internal and external stakeholders.”

“This also extends to the condition of the vehicle which may be a growing issue as working from home policies and vehicle supply issues mean more employees are driving their personal vehicles for work trips.”

4. Legal risks

Ensuring compliance with laws and other government regulations is the main focus of managing legal risk in your fleet policy. By reviewing and implementing steps to reduce the first three risk areas (financial, human resources and reputational), many of the key steps for a good risk management framework will already be in place.

For a fleet policy to reduce the risks for your business, however, it needs to be enforced. It also needs to be regularly reviewed to stay relevant as mobility trends evolve and community expectations change. 

Over the next decade, fleet managers will need to take a more strategic approach to fleet policy development by engaging widely with various stakeholders and increasing their expertise in risk management so they can add value to a business. This will include areas like grey fleets, new technology and electric vehicles.

To take a deep dive into all the considerations needed to manage and reduce overall risk and make sure your fleet policy doesn’t have any blind spots, check out Interleasing’s Managing Fleet Risk guide.