Shaping Today's Fleets for Tomorrow
In a fleet environment that is rapidly evolving, it is sometimes hard to understand which are the best options for the business. However, as a fleet manager, you have a responsibility to ensure that your people and goods arrive at a given destination on time and cost efficiently. But now there is a new dynamic; you must achieve this as well as considering the environment.
PVS will help you identify and manage your ‘green ambitions’.
Here at PVS, we spend a great deal of time discussing and researching initiatives that affect fleet management and the hot topic currently is the fleet impact on the environment.
At first glance, this all appears complicated. The industry is already filled with pointless jargon and now there is another excuse for even more. But at PVS we speak plain English and avoid unnecessary, complicated ‘speak’ breaking it all down in to ‘easy to understand’ terms.
And the good news is – there are only two things you need to think about to manage a green fleet.
- Vehicle Suitability
- Driver Behaviour
The result will mean potential cost savings and a greener fleet.
The ‘green’ performance of a vehicle is based on its fuel usage, CO2 emissions and the Euro Standard rating.
The fact of the matter is this; there is a balancing act between the role the vehicle plays in the fleet and the fuel usage and emissions performance of the vehicle.
Regardless of the type of vehicle and the fuel type, reducing fuel consumption means a greener fleet and lower costs. Businesses need to be mindful of what size or payload of vehicle is necessary – oversized vehicles mean increased acquisition costs but more importantly, increased fuel consumption. Conversely, over laden vehicles mean higher maintenance costs and higher fuel costs.
The operating environment a vehicle normally undertakes will also have a major bearing on
the vehicle type. High motorway usage will dictate a different type of vehicle to vehicles spending large amounts of time in urban areas. The right vehicle for the job will maximise efficiencies and therefore minimise fuel usage and emissions.
The more fuel used, the greater the impact on the environment.
PVS can help you identify the correct vehicles for your fleet; reducing fuel usage and therefore emissions.
Alternative Vehicle Types
In choosing the correct vehicle there are many advantages and disadvantages to consider.
Hybrid Vehicles: These have both traditional diesel/petrol engines combined with an electric motor. Many small and medium sized hybrid have a very good environmental performance in urban, stop-start driving conditions. However, the choice of vehicle is limited, and these vehicles are not particularly suited to extended motorway driving.
Plug-In vehicles (Pure Electric Vehicles – EV’s): These are driven by electric motors powered by batteries which are re-charged by plugging in to the mains electricity supply. These vehicles are the most environmentally friendly and therefore offer significant operating savings. However, the choice of vehicle is limited, and the operating range of the vehicle is a serious consideration. Normally they are limited to around 100 miles before they need re-charging.
Plug-In hybrid vehicle (PHV): PHVs are vehicles with a plug-in battery and an internal combustion engine. Typically, they have a pure-electric range between 10 and 30 miles, after which the vehicle reverts to petrol or diesel hybrid mode.
Extended Range Electric Vehicle (ERV): A vehicle powered by a battery with an internal combustion engine powered generator on board. E-REV’s are like pure-EV’s but with a shorter battery range of around 40 miles. Range is extended by an on-board generator providing many additional miles of mobility. With an E-REV the vehicle is still always electrically driven. The advantage is very low fuel costs and therefore low emissions. However, the potential disadvantages are high purchase price, and limited range. Vans may have a reduced payload compared with a conventional vehicle with the same gross vehicle weight.
The driver behaviour is the second largest influencer on fuel usage and therefore emissions. There are many factors that affect driver behaviour.
Small changes can make a big difference
Driver Training: Simply training a driver to drive more smoothly and sensibly can generate savings in the order of 15%. There are several driver training establishments and PVS can help you select the most appropriate.
Telematics: In depth analysis of driver behaviour will help identify those drivers who are failing to meet the desired standards. In-vehicle black boxes report on driver characteristics such as location, movements, status and behaviour of a vehicle or fleet of vehicles. This is achieved through a combination of a GPS receiver and an electronic GPRS or 3G device installed in each vehicle, which then communicates with the user and web-based software. Comparative reports can then be generated and those drivers failing to meet the desired standards can be identified.
Driver Handbooks: Make sure that your policies on driver behaviour are available to the driver at all times. This booklet should be kept in the glove compartment of the vehicle and become part of the driver induction process.
Speed Limiters: Another great way of modifying driver behaviour. They are increasingly used in vans to limit their speeds to 70, 65 or 60 mph. Significant fuel savings are possible. A vehicle travelling at 60 mph will use approximately 15% less fuel than it will travelling at 70 mph. The reduction in fuel between 80 and 70 mph can be as much as 25%.
Maintenance: Badly maintained vehicles will use more fuel than vehicles in good condition. Deterioration of performance between regular servicing can be identified by monitoring fuel economy, allowing any corrective action to be taken before the next planned service. Maintaining correct tyre pressures is important to maximise fuel economy, tyre life and grip. Tyres under inflated by 20% will increase fuel consumption by about 2-3%.
Satellite Navigation: Improved route planning and scheduling could assist in a more efficient operation and therefore reduce emissions. Choosing the best time of day on a particular route can avoid unnecessary traffic delays and therefore increased fuel usage.
Mileage Incentives: Over generous mileage incentives may lead to drivers taking extended routes and generating unnecessary miles. HMRC provide guidelines on mileage rates.
Mileage Monitoring: Vehicle mileage should be monitored to identify under-utilised vehicles or high mileage drivers, and to question whether there are more cost-effective and efficient methods of conducting core business activity. The first step is to audit your organisation’s travel patterns, using data from fuel card reports, mileage claims and other relevant sources to establish a baseline from which to work.
Private Mileage: Companies offering private mileage fuel is effectively incentivising that driver to drive more. Careful consideration should be given to this type of employee benefit.
Unnecessary Journeys: Some travelling can be avoided altogether. Training should be given to all personnel with access to a company vehicle, so they can decide if a journey is really necessary or if there is an alternative. With the advent of video and teleconferencing, some meetings can be avoided altogether. Perhaps car sharing is an option or perhaps public transport is the correct option.
So, we have looked at the vehicle type and driver behaviour and we understand that the environmental footprint of a vehicle is to do with fuel usage, CO2 and Euro Standard; what about the cost benefits and tax implications.
Unfortunately, in a constantly evolving market place, the cost implications and tax considerations are also changing constantly. It is the PVS core business to keep abreast of these issues in order to advise our clients accordingly.
In broad terms; the lower the CO2 emissions of a vehicle, the lower your costs will be in terms of:
- reduced fuel costs.
- reduced class 1A National Insurance contributions.
- reduced vehicle excise duty.
- reduced corporation tax.
- employee benefit through reduced benefit-in-kind tax
London Congestion Charge
The London congestion charge acts as an incentive for reducing CO2 emissions. The Greener Vehicle Discount (GVD) provides a 100% discount from the congestion charge for cars that emit 100g/km or less and that meet the Euro V standard for air quality.
Plug-in Vehicle Grants
Grants of 25% of the purchase price, up to a maximum of £5,000, were introduced in January 2011 for qualifying plug-in cars. For qualifying vans, the grant is 20% of the purchase price, up to a limit of £8,000.